Monthly Archives: June 2011

BY MAXWELL LAW FIRM, PLLC

Generally to qualify for a Chapter 7 Bankruptcy you must pass what’s called the means test.

The first part of the test is  whether you household income is at or below the median income your geographical area based on number of persons in your household.

Just because your income is more than the median does not necessarily mean that you will not qualify for Chapter 7 and that you will have to file a Chapter 13 Bankruptcy instead. The second part of the means test takes a look at your monthly expenses vs. your income. If you have very little disposable income, after paying your necessary expenses (food, shelter, clothing, transportation, heath insurance), then you may very well still qualify even if your income is above the median income.

The third part of the means test measures your expenses against the IRS standards to measure the reasonableness of your expenses. Generally the IRS standard expenses are less than most people’s expenses, but there isn’t too much of a disparity.

What does this all mean? Well I can best explain this with an example.

example: Lets say the median income for one individual is 38K per year and you make 70K; you have close to 300K in debt some secured and some unsecured; your payroll deductions are more than half of your income per pay period; and once you pay your necessary expenses you have virtually no money. Well in this scenario you would qualify for a chapter 7 because you will pass the means test and you would not qualify for a chapter 13 because you have no disposable income available to pay into a plan payment, particularly if you are operating at negative at the end of the month.

A qualified Bankruptcy Attorney can let you know whether you qualify for Chapter 7. In North Carolina call Maxwell Law Firm, PLLC 704-780-1100. In California contact the Law Offices of Chirnese L Liverpool at 818-714-2200.

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BY MAXWELL LAW FIRM, PLLC

A judgment is a very negative thing that can impact your credit for several years. In addition, judgment liens can hinder your ability to transfer property.

You can have judgments voided in Bankruptcy pursuant to 11 U.S.C. Section 522 (f)(1)(B). This is called a motion to avoid a lien. When you avoid a lien in chapter 7, the lien is essentially voided and becomes discharged at the close of the bankruptcy. When a lien is avoided in a chapter 13, the debt becomes discharged at the end of the Chapter 13 plan either three or five years.

Bankruptcy not only cleans up your credit, but it also can assist you with removing judgments from your records. It’s time to move forward with trying to clean your credit up, you have nothing to loose but debt!

If you would like to consult with a Bankruptcy Attorney in the Charlotte Area please call Maxwell Law Firm, PLLC at 704-461-1883. In California please call the Law Offices of Chirnese L Liverpool at 818-714-2200.

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Individuals contemplating whether to file for bankruptcy often wonder wo will know that I filed for bankruptcy?  Debtors who file for bankruptcy in Los Angeles are often concerned that employers, family members, friends or others will find out that they have filed for bankruptcy. The reality is that outside of notifying all of your creditors so that you can discharge your debt, most others will never find out about your bankruptcy filing. Your employers Human Resources department will be notified only if you wish to stop a garnishment on your paycheck. As for family and friends they will only be notified if you tell them about your filing or they are savvy enough to figure out how to use an online searchable database called PACER, which is usually only utilized by bankruptcy attorneys.

If you have additional questions please visit our Los Angeles Bankruptcy Lawyer homepage to speak to a bankruptcy attorney in California, or you can call us at (818) 714-2200.

If you are in the North Carolina area, contact the Maxwell Law Firm at (704) 780-1100 to speak with a bankruptcy attorney.

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I am frequently asked by my clients the following questions:

1) “Do I have to file bankruptcy jointly with my spouse” – the answer is No.

2) “Well, why do I have to provide his/her income information, if they are not filing bankruptcy” – the answer is because I said so – ahem, excuse me….I mean, the bankruptcy court requires it.

A common question that debtors have for their Los Angeles bankruptcy lawyer when filing bankruptcy is why their non filing spouses’ income is needed. The answer is because in order to determine the California median household income, both spouses income must be taken into account. The California median household income is needed to determine whether the debtors have to file a chapter 7 bankruptcy or chapter 13 bankruptcy. The non filing spouses personal expenses should be deducted from the household income if a married couple is not filing jointly.

If you have additional questions please visit our Los Angeles Bankruptcy Attorney homepage or call us at (818) 714-2200.

If you are in need of Bankruptcy assistance in North Carolina contact the Maxwell Law Firm at (704) 780-1100

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by Maxwell Law Firm, PLLC

In this tough economy, I have seen so many of my clients cash in their retirement accounts to only have more financial woes as a result.

Reason # 1: The purpose of your account is for retirement. We all know that social security will not be enough money for you to live off.

Reason # 2: You will incur tax  penalties with both IRS and your local tax authority, as a result of drawing upon your retirement early. You will have to report the distribution as income on your return, if you did not have the taxes taken out at the time of the distribution.

Reason # 3: If you plan on filing for bankruptcy, your tax account will be completely exempt from seizure under 11 USC 522 and your tax liabilities if they are old enough can be discharged in bankruptcy.

Reason # 4: There are other sources you can use for funds if you are running low and need to survive, such as unemployment, severance pay, savings. If all those options are not available you can always take a loan from your 401K. In this case you will not have any penalties to pay in the end and this will make you have to recontribute your retirement fund.

If are having financial difficulties and would like to discuss your finances and options with a qualified professional call the Law offices of Chirnese L. Liverpool at (818) 714-2200.

If you are in North Carolina, call Maxwell Law Firm, PLLC at 704-461-1883

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Many people may not know how to find a great bankruptcy attorney.  Do you ask your friends?  Yes, if you have a friend that has filed for bankruptcy, ask them – who did they use, how was their experience? how much does the attorney charge? etc.  BUT WHAT IF YOU DONT KNOW ANYONE WHO HAS FILED FOR BANKRUPTCY (highly unlikely – given the current economic situation) You must turn to other sources – such as the internet.

Use the internet, to find an attorney close to your home or work.  Some Los Angeles Bankruptcy attorneys will offer free consultations, give you experienced service, and ask you to fill out an evaluation form to ensure that you are qualified to file.

Clients should not rush for choosing an attorney. Consider an attorney, who makes you relaxed and is understanding about your problems.  This is already a stressful situation, you dont need the attorney to stress you any further.   Try to find out if the attorney is organized, prompt and will work well together with you. Last but not  least, you should also make sure that matters about fees and payment are settled. This is generally done by signing a retainer agreement with the attorney.

The client should honestly explain his or her situation to the attorney and try to measure if they are comfortable with the attorney and their staff. At the same time our Los Angeles Bankruptcy attorney will give you feedback on your situation and if there are any other better optionsbesides filing bankruptcy.  When talking with the attorney, find out how long he or she has been in practice, what the particulars of their specialization are, roughly how many cases they have handled and what your outlook should be from the attorney in terms of representation.

If you are seeking a free bankruptcy consultation, contact the Bankruptcy Law offices of Chirnese L. Liverpool at (818) 714-2200.

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Inexpensive Los Angeles Bankruptcy Attorney Chirnese Liverpool serves the entire state of California.

If your crushing payments are greater than you’ll be able to handle and afford and you’re getting deeper and deeper into credit card debt day by day, you could need to think about calling a Los Angeles bankruptcy lawyer to discuss whether filing for Chapter 7 bankruptcy is right for you. Placing your self through a Chapter 7 bankruptcy may be  a chance for a brand new beginning.

Your monetary issues could possibly be a result of many issues; the bad economic times, sudden medical payments, or uncontrolled spending. When you’re affected by sleepless nights and also you are continually fearful concerning the state of your economic well being, your only option could also be to seek the advice of a Los Angeles bankruptcy attorneys.

Chapter 7 bankruptcy is when a person seeks protection from his or her debts.  Once the bankruptcy is filed, creditors will stop hounding you demanding further payments. They’ll stop harassing you with phone calls or any courtroom proceedings. Otherwise, they are in violation of the Federal Automatic Stay.

It’s essential to consult with a Los Angeles bankruptcy lawyer when you are considering filing for bankruptcy, because they are knowledgeable in the procedures and the requirements bankruptcy filings.

If you are in need of a Los Angeles bankruptcy Lawyer, call the Law offices of Chirnese L. Liverpool at (818) 714-2200 to set up your free consultation.

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BY MAXWELL LAW FIRM, PLLC

Do you have problems paying your debts? Are you threatened with massive credit card debt, unpaid medical bills, garnishment, foreclosure, or repossession? If so, you may want to consider bankruptcy as a way to deal with these problems. Here are some steps you should take if you a considering filing for bankruptcy.

Do’s

1.  Continue to make payments on secured property you intend to keep such as a mortgage on a home and a car loan on a vehicle.

2. Make a list of your monthly expenses. So that you can provide this information to your Bankruptcy Attorney.

3. Find out the current value of your property. Do this for all your property, included inherited property. Pull together tax records showing the values for your assets. Keep in mind all your mind all property in your name must be listed on the bankruptcy petition.

4. Complete a credit counseling course within 180 days or less of filing.

5. Do obtain a copy of your credit report and list some unpaid bills that maybe missing from your report so that you can review this information with your Attorney.

6. Do file your tax returns. You are required to disclose the last two (2) years of tax returns to the Bankruptcy Trustee.

7. Do create a budget and trim expenses.

8. Find a good Bankruptcy Attorney and Do be sure to provide the name of your Attorney, website, and  address and phone number to any friends or family members facing the same issues.  A referral from a happy client is the best compliment a competent Bankruptcy Attorney can get!!

Don’ts

1. Do not borrow from your 401k to pay bills, because you will incur non-dischargeable tax debt. Also most retirement accounts are exempt from seizure in bankruptcy.

2. Do not transfer or sell property within two (2) years of filing to family members or for less than the fair market value. This will be viewed as a fraudulent transfer and could cause your case to be dismissed.

3. Do not create a living trust. This smells of fraud, because you are placing all of your assets in a trust for protection from creditors. Keep in mind that a Bankruptcy Trustee can search your name and social for unlisted assets. This will certainly have your bankruptcy dismissed.

4. Do not borrow large amounts of money from family members within six ( 6 ) months of filing. You bank statements are reviewed by the trustee once you file and he looks back up to six (6 ) months prior to filing.

5. Don’t take cash advances from credit cards within ninety (90) days of filing from bankruptcy. These advances are non-dischargeable and you will be stuck paying for it after your discharge.

6. Don’t use credit cards to pay tax debt. This will create a non-dischargeable debt. Consult with your lawyer about tax issues and debts, because some tax debt can be discharged in a Chapter 7 bankruptcy.

7. Don’t take out a consolidation loan. Filing for Chapter 13 bankruptcy is a more sound way of paying off your debt

8. Don’t avoid complaints and summons (lawsuits) filed by creditors in the past couple of years. Provide this information to your Attorney. The Attorney maybe able to have the lien or judgment voided in the bankruptcy.

If you would like to discuss what steps you should be taking to become debt free and your Bankruptcy options call Maxwell Law Firm, PLLC at 704-461-1883 or click here

In the California area contact the Law Offices of Chirnese L. Liverpool at 818-714-2200.

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by Maxwell Law Firm, PLLC

Q. What should I do if I get behind in my mortgage payments?

A. Contact your bank and see if there are any programs you qualify for (such as a loan modification or forbearance)

Q.
What should I do if I receive letters saying my home is going to be foreclosed upon?

A. Contact an attorney once the bank has started judicial foreclosure the only you will be able to defend yourself is with an attorney.

Q. My lender is not working with me to avoid foreclosure. What should I do?

A. Discuss your other options with a bankruptcy attorney.

Q.
What are my options to avoid foreclosure? Short sale, deed in lieu, or bankruptcy.

Q.
How do I protect myself against mortgage modification and foreclosure avoidance scams?

A. You can probably fill out most of the paperwork yourself. Avoid paying some company high fees to prepare the paperwork for you.

To talk to a Bankruptcy Attorney in North Carolina Contact Maxwell Law Firm, PLLC at 704-461-1883. In California contact The Law Offices of Chirnese L. Liverpool at 818-714-2200.

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BY MAXWELL LAW FIRM, PLLC

Q. I  have hundreds and thousands of dollars in unpaid medical bills. Can the doctor’s office sue me?

A. Yes they can sue for nonpayment on the debt. If your insurance does not pay for bill ultimately you are responsible. So they can sue and list the item on your credit report.

Q. What should I do If I can not pay these medical bills?

A. Offer the doctor a settlement to remove the item from your credit report or 2. Consult with a bankruptcy attorney.

Q. My had over $100,00.00 is student loans and recently passed away, am I required to pay this debt? It depends, federal loans are automatically discharged upon the death of the student.

A. With private loans however if you have co-signed on this loan, you will liable as a guarantee and have to pay the balance on these loans. You can protect yourself from this occurrence by either not co-signing on a student loan or having an term life insurance policy issued on your child in case of death or severe illness/disability.

Q.
I heard that a short sale will do less harm than a foreclosure is this true?

A. No the short sale is just as damaging to your credit as a foreclosure. Furthermore, the bank can still come after you and sue for the difference in what you owed and what was received in the short sale. Also the creditor can issue you a 1099 form requiring you to report the forgiven debt as income to IRS.

Q.
Is there way I can keep my house or give it up without incurring any further penalties if I am already in foreclosure?

A. Yes, in a chapter 7 bankruptcy you can choose to surrender the property itself and incur no further liability or you can catch up with the payments and stop foreclosure.

Q.
I called the bank and they said they have received my loan modification package should I be concerned about anything?

A. Yes keep in mind that if you are in default the bank can still commence foreclosure proceedings even if you have a loan modification pending.

To talk to a Bankruptcy Attorney in North Carolina Contact Maxwell Law Firm, PLLC at 704-461-1883. In California contact The Law Offices of Chirnese L. Liverpool at 818-714-2200.

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By Maxwell Law Firm, PLLC

Q. How do I know if a debt is secured, unsecured, priority, or administrative, so I can fill out my schedules correctly?

A. Secured debt is debt secured by property (mortgage, car note), unsecure debt is debt that is general consumer debt, priority debt is generally unpaid taxes and domestic support obligations.

Q. What if a creditor tries to collect money after I get a discharge?

A. You can send them a copy of the discharge order that will state the debt has been discharged and that you are no longer liable.

Q. How long do I have to wait before I can qualify for a mortgage after filing for bankruptcy?

A. You may be able to qualify for a FHA mortgage two 2 years after the date of discharge. It may take longer to qualify for any other type of mortgage.

Q.Will all my creditors be notified of my discharge?

A. Yes similarly they are notified when you file and can not commence collection activity until after the automatic stay has been lifted.

Q.
I want to file for bankruptcy can I run up my credit cards and get all the things I want before I file?

A. No, purchases made 90 (ninety) days before filing are presumptively abusive and are non-dischargeable in some cases.

Q.
I have student loans can I get rid of that in bankruptcy?

A. Generally no The US Bankruptcy Code at 11 USC 523(a)(8) provides an exception to bankruptcy discharge for education loans. You will still be responsible for the repayment of those loans even if you file for bankruptcy.

Q.
I have some tax debt can I get rid of it bankruptcy?

A. It depends on when the tax liability arose. If the tax liability arose more than three years ago and there has not been an assessment of those taxes by irs within the last 240 days then you should be able to have it discharged in a chapter 7 bankruptcy.

Q. I would like to get a cash advance on my credit card before I file for bankruptcy is that ok?

A. Keep in mind that cash advances within ninety (90) days of filing are non-dischargeable. This means the creditor can contest the dischargeabilty of this debt and you will be required to pay it even after discharge.

Q. Is bankruptcy worse than foreclosure?

A. No foreclosure actually does more damage to your credit score and standing and it will take you longer to qualify for mortgage than if you filed for bankruptcy. Keep in mind bankruptcy takes care of other debts as well and cleans your entire credit report up.

Q.
I have filed for bankruptcy should I sign a reaffirmation agreement?

A. A reaffirmation agreement is an agreement to be bound to the original terms of the loan despite the bankruptcy filing. I would not sign it once you file for bankruptcy the debt is automatically discharged, if you choose to keep the property you can still continue to make the payments and keep the property. If you later decide to walk away you can, because you have not signed a reaffirmation agreement.

Q.
After I have filed bankruptcy is there anything I can do start reestablishing credit?

A. Yes you can get secured credit cards, which are backed by your checking account. These accounts report to the credit agencies and if you continue to use them and keep them in good standing.

To talk to a Bankruptcy Attorney in North Carolina Contact Maxwell Law Firm, PLLC at 704-461-1883. In California contact The Law Offices of Chirnese L. Liverpool at 818-714-2200.

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BY Maxwell Law Firm, PLLC

Q. I made a settlement with one of my creditors to pay off a card for less than what I owed in a lump sum is there anything I should be worried about?

A. Yes, for one the creditor can send you a 1099 form and say the forgiven debt is income AND the creditor can also place a settlement notation on the account in your credit report thereby decreasing your score.

Q. I was laid off and have been out of work for a year. It’s reached a point where I can’t pay my bills, and I’m considering filing for bankruptcy. What should I know before making a decision?

A. You should know what your income is per month, the number of persons in your household, what kind of and how much debt you have, what your monthly expenses are, and a clear list of all your assets.
What are the consequences of filing a bankruptcy petition? The filing will remain on your credit report for 8 years just as any other negative item.

Q.

What must I do BEFORE I file for bankruptcy?

A. Consult with an attorney; gather necessary documents my attorney has requested.

Q.

How do I protect property that is collateral for one of my secured debts from being repossessed?

A. This depends on the chapter in bankruptcy you file Chapter 7 or Chapter 13 and if you are behind on payments. If you are current on payments then the property should not be taken back by the creditor in a chapter 7. In a chapter 13, the payment plan can be structured to include arrearages.

Q. What can I do if a creditor continues to try to collect on a debt that I owe after I have filed my bankruptcy petition and where the automatic stay applies?

A. Notify your Attorney, if a creditor violates the automatic stay they could face major penalties and fines from the bankruptcy court.

Q.

If I file for bankruptcy, will I still owe child support?

A. Yes domestic support obligations are not dischargeable in bankruptcy.

Q.

How do I know if a debt is secured, unsecured, priority, or administrative, so I can fill out my schedules correctly? An attorney can assist you with the classification of your debts.

A. For example a mortgage on a residence would be a secure debt. Priority debt is tax debt and other domestic support obligations. Unsecure debt is any other debt such as unpaid medical bills, credit cards, lines of credit.

Q.How long is my payment plan in a chapter 13? It can be anywhere from three to five years. Does it depend on the types of debt and how much? Yes secure debts and priority debts are paid even after the plan ends where the unsecure debts are paid until the end of the plan in a chapter 13 bankruptcy

Q. How do I pay my debts under the repayment plan?

A. A primary mortgage and priority arrearages are paid through the trustee the remaining creditors are paid directly by the debtor according to the chapter 13 plan.

Q.

If I file for bankruptcy, will I still owe alimony?

A. Yes domestic support obligations are non-dischargeable in chapter 7 bankruptcy and have to be paid till the end of the plan in a chapter 13 bankruptcy.

Q. How many years will a bankruptcy show on my credit report?

A. Eight years like any other negative item

To talk to a Bankruptcy Attorney in North Carolina Contact Maxwell Law Firm, PLLC at 704-461-1883. In California contact The Law Offices of Chirnese L. Liverpool at 818-714-2200.

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DOMESTIC SUPPORT OBLIGATIONS AND BANKRUPTCY

BY MAXWELL LAW FIRM, PLLC

DOMESTIC SUPPORT OBLIGATIONS ARE NON-DISCHARGEABLE

Domestic support obligation is Debts for alimony, maintenance or support owed to child, spouse or governmental entity that paid for the support of the child or spouse.

Pursuant to 11 U.S.C. § 523(a)(5), “domestic support obligations” are not dischargeable in chapter 7 . This means a debtor will have to pay this debt in a Chapter 7 case as scheduled and ordered in the domestic order .

FAILURE TO PAY A DOMESTIC SUPPORT OBLIGATION IS A BASIS FOR DISMISSAL OF THE DEBTOR’S CHAPTER 13 CASE under 11 U.S.C. § 1307 (c ) in a Chapter 13 domestic obligations for property settlements and obligations for debts under a dissolution judgment can be put into a Chapter 13 bankruptcy plan. Creditor should receive protection under the code be paid through debtors Plan. Equitable distribution obligations are dischargeable in cases filed under Chapter 13 provided that the debtor receives a completed plan discharge under 11 U.S.C. § 1328(a). Therefore, the domestic support obligation must be paid until the debtor receives a discharge at the end of the plan completion which could be anywhere from three to five years.

Although domestic support obligations can not be discharged in bankruptcy, there are quite a few debts that can be wiped away with a successful bankruptcy. Divorce is tough and your finances can be in disarray after a financially draining divorce. Exploring your debt solution options before or after a divorce can save you time, money, and the stress. Just because you are getting divorced it does not mean that your credit has to suffer! Think about repairing it for the future.

To talk to a Bankruptcy Attorney in North Carolina Contact Maxwell Law Firm, PLLC at 704-461-1883. In California contact The Law Offices of Chirnese L. Liverpool at 818-714-2200.

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BY MAXWELL LAW FIRM, PLLC

Part of meeting the requirements that is used to determine whether you qualify to file for chapter 7 bankruptcy is the household income this is called the means test. The means test is based on IRS income standards for median income by geographical area. There are set limits on the amount of income you can earn per year (based on a six month average) in order to qualify for a chapter 7 bankruptcy. This means you cannot make over this amount in order to qualify and file for chapter 7.

MEDIAN INCOME EXAMPLE

**PLEASE NOTE THESE ARE EXAMPLES FOR MEDIAN INCOME REQUIREMENTS BY STATE CLICK HERE

Example: April is a single wage earner with no dependents and earned $70,000 in 2010. She was unemployed in 2010 and collected unemployment in 2011 of about $1700 a month. For the past 6 months April has collected $10,200.00 a yearly average would be $20,400.00; therefore

Several factors are used to determine whether you meet the median income requirements. Such as

1. Household size—the number of individuals in your household. Bankruptcy uses the IRS definition for dependents or exemptions. According to Publication 501 a dependent must meet one of the qualification.

2. Marital Status—If a debtor wishes to file alone but is: (1) married and (2) living in the same household as their spouse. The spouse’s income is used to determine whether they qualify for bankruptcy.

3. Geographical location –the income requirements are set by this. That means the Average in California will be more than the average in North Carolina.

There are other factors that are used to determine whether you qualify for Bankruptcy. To talk to a Bankruptcy Attorney in North Carolina Contact Maxwell Law Firm, PLLC at 704-461-1883

To speak with a bankruptcy attorney In California contact The Law Offices of Chirnese L. Liverpool at 818-714-2200.

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Get out the cycle of debt by following these 10 steps:

1) Set up a budget and stick to it

2) Stop using your credit cards – really! stop!

3) Know where every penny of your money goes.  You can do this by setting up an online tracking system on a website such as mint.com or carry a written register with you.

4) Sign up for online bill pay and pay your bills online automatically.

5) Start an emergency fund (for example $1000), and set it up to receive savings every payday.

6) Meet with your accountability partner or spouse weekly for at least a half an hour to review your finances, purchases and bills.

7) After withdrawing your spending money for the week (which is allotted for in your budget) put away your debit and ATM cards so you cant access them for frivolous purchases and blow your budget.

8) Visualize your financial goals by writing them down (or typing them up – to each his own, lol).  Take small steps toward your goals everyday.  If you see them in writing – this is a constant reminder and helpful tool for helping you to stick to pursuing these financial goals.

9) Dont make impulse purchases.  If you want an item – wait 24 hours.  If you still want it and you can squeeze it in your budget do so.  If you dont want it after 24 hours – you just saved yourself some money.  High five!

10) Dont let setbacks sabotage your long term success.  If you overspend or face emergency expenses, return to your budget immediately.

If you are interested in speaking with a California bankruptcy attorney, contact the Law Offices of Chirnese L. Liverpool at (818) 714-2200.

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