tag:blogger.com,1999:blog-64480708877791071112024-03-07T20:28:16.093-08:00Krueger Law BlogLaw Office of Michael T. Kruegerhttp://www.blogger.com/profile/08774003769083213722noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-6448070887779107111.post-59176604140742309242012-01-10T11:25:00.000-08:002012-01-10T11:25:14.976-08:00SUCCESSFUL LIEN STRIPOn Monday, January 9, 2012 I won a motion to value (lien strip) case against Bank of America in the amount of $257,991.31 for my client. In July, I filed a chapter 13 plan on behalf of my client and filed a separate motion to value his second mortgage at $0. This is possible in a chapter 13 filing when the second mortgage is unsecured, which means value of the home is less than the amount of the first mortgage.<br />
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The appraisals that the opposing counsel provided were much higher than the amount of the first mortgage, but I was able to show evidence of recently sold homes, as well as evidence of water damage and foundation damage to the home to counter the appraisal amount. <br />
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The result of this case is an order stating that my client's second mortgage will be valued at $0. When his chapter 13 plan runs after the 36 month period, he will own the home with only one mortgage. He will pay nothing to the bank on his second mortgage so long as he continues making payments to the trustee in accordance with his chapter 13 plan. Since the loan value on the first is so close to the actual value of the home, my client will soon own a home with equity.<br />
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If you, or someone you know is interested in learning if bankruptcy can help you, please contact The Law Office of Michael T. Krueger at 925.454.4460.Law Office of Michael T. Kruegerhttp://www.blogger.com/profile/08774003769083213722noreply@blogger.com0tag:blogger.com,1999:blog-6448070887779107111.post-54371246806709791562011-10-25T14:38:00.000-07:002011-10-25T14:38:26.269-07:00Do you have "Consumer" Debt or "Business" DebtChapter 13 and Chapter 7 bankruptcies are the most common chapters of bankruptcy filed by individuals. In order to qualify for a Chapter 7 bankruptcy your income must be below the median income for your family size. This is referred to as the "means test."<br />
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In order to qualify for a Chapter 13 bankruptcy, your total secured debt must be below $1,081,400 and your total unsecured debt must be below $360,475.<br />
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What happens if an individual's income is over the median income limit and their debt is over the Chapter 13 limit? Chapter 11 bankruptcy is an option, but there may be an easier solution. If an individual's debt is more than 50% from business related debt, the Chapter 7 means test does not apply. For example:<br />
<span style="color: #073763;"> </span><br />
<span style="color: #073763;"> <b><span style="color: #0b5394;"> Bob has a family of 3 in Alameda County, CA and has an income of $250,000/year and he has total secured debt of $1,600,000 and total unsecured debt (credit cards) of $25,000. Bob owns three rental properties in addition to his home. Bob has a mortgage of $750,000 on his primary residence and the home is worth about $700,000. The total mortgages on the three rental properties is $850,000 and they are all severely underwater. </span></b></span><br />
<div style="color: #0b5394;"><br />
</div><div style="color: #0b5394;"><b> Normally Bob would not qualify for a Chapter 7 or a Chapter 13 bankruptcy because his income is too high and his debt is too high. Here, however, Bob's debt is more than 50% from "Business" debt because the rental properties are considered "Business" related expenses. </b></div><br />
Depending on Bob's financial situation, a Chapter 7 Bankruptcy could alleviate Bob of significant tax consequences or deficiency judgments. <br />
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If you, or someone you know would like to learn more about Chapter 7 or Chapter 13 Bankruptcy, contact our office at 925-454-4460 to set up a free consultation.<br />
Law Office of Michael T. Kruegerhttp://www.blogger.com/profile/08774003769083213722noreply@blogger.com2tag:blogger.com,1999:blog-6448070887779107111.post-3930234100076014772011-09-13T14:47:00.000-07:002011-09-13T14:47:39.004-07:00SHORT SALE AND FORECLOSURE TAX LIABILITY<!--[if !mso]> <style>
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<div align="center" class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2; text-align: center;"><b><span style="font-family: "Helvetica","sans-serif"; font-size: 18.0pt; mso-bidi-font-family: FrankRuehl; mso-fareast-font-family: "Times New Roman";">TAX LIABILITY INCURRED BY HOMEOWNERS THROUGH SHORT SALE OR FORECLOSURE</span></b></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><br />
</div><div class="MsoNormal" style="line-height: normal;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12pt;">There has been a lot of discussion over the past two months regarding California SB 458.<span style="mso-spacerun: yes;"> </span>The new law, in effect since July 2011, bars banks from filing a deficiency action against homeowners for the difference between the sale price and the amount owed to the bank secured by notes.<span style="mso-spacerun: yes;"> </span>The new law extends this protection against junior lien holders.<span style="mso-spacerun: yes;"> </span>While this is good news for most homeowners that decide a short sale is best for their primary residence, it does not address the tax consequences of that decision.</span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the cancellation of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure and short sale qualifies for the relief.<span style="mso-spacerun: yes;"> </span>This law expires on December 31, 2012.</span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">California law conforms with modifications to federal mortgage forgiveness debt relief for discharges that occurred in tax years 2007 through December 31, 2012. The amount of qualifying indebtedness is less than the federal amount and California imposes a state-only limitation on the total amount of relief excluded from gross income. </span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">This is all good news for homeowners if they find themselves in a situation where they need to sell their home through short sale or the home goes to foreclosure.<span style="mso-spacerun: yes;"> </span>However, there are limitations that must be taken into consideration when deciding if a short sale or foreclosure is an option.<span style="mso-spacerun: yes;"> </span></span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12pt;"><span> </span>In order to determine if you qualify for SB 458 protection and the Debt Relief Act of 2007 protection you must first determine what cancellation of debt includes.</span></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">What is Cancellation of Debt?<span style="mso-spacerun: yes;"> </span>(http://www.irs.gov/individuals/article/0,,id=179414,00.html)</span></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.</span></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><br />
</div><div class="MsoNormal" style="line-height: normal;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12pt;">There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:</span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">•<span style="mso-tab-count: 1;"> </span>Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.</span><span style="font-family: "Helvetica","sans-serif"; mso-bidi-font-family: FrankRuehl;"> </span><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">The Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as qualified principal residence indebtedness.</span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">•<span style="mso-tab-count: 1;"> </span>Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.</span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">•<span style="mso-tab-count: 1;"> </span>Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.</span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">•<span style="mso-tab-count: 1;"> </span>Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.</span></div><div class="MsoNormal" style="line-height: normal;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">•<span style="mso-tab-count: 1;"> </span>Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.</span></div><div class="MsoNormal" style="line-height: normal; text-align: center;"><b><span style="font-family: "Helvetica","sans-serif"; font-size: 18.0pt; mso-bidi-font-family: FrankRuehl; mso-fareast-font-family: "Times New Roman";">Refinance</span></b></div><div class="MsoNormal" style="line-height: normal; text-align: center;"><br />
</div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";">One of the most common issues with qualifying for the Mortgage Debt Relief Act of 2007 is for loans that were refinanced and the value of the home has dropped below that value.<span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span></span></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-bidi-font-weight: bold; mso-fareast-font-family: "Times New Roman";"><span style="mso-tab-count: 1;"> </span></span></div><div class="MsoNormal" style="line-height: normal;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12pt;"><span> </span>If a homeowner’s original mortgage was for $450,000 in 2004 and refinanced for in 2007 to make improvements to the home leaving the current balance $600,000 the homeowner would qualify for the Debt Relief Act of 2007 so long as the value of the home is at least $600,000.<span style="mso-spacerun: yes;"> </span>However, if the home was sold for $500,000 in a short sale, the remaining balance of $100,000 would be outside the protection of the Mortgage Debt Relief Act of 2007.</span></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><br />
</div><div class="MsoNormal" style="line-height: normal;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12pt;">The problem that most homeowners are facing is the drop in value of their home from the value when the home was refinanced.<span style="mso-spacerun: yes;"> </span>Remember that the protection is only available to principal residence.</span></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;"><br />
</div><div class="MsoNormal" style="line-height: normal; text-align: center;"><b><span style="font-family: "Helvetica","sans-serif"; font-size: 18pt;">Property other than principal residence</span></b></div><div class="MsoNormal" style="line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><br />
</div><div class="MsoNormal" style="line-height: normal;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12pt;">The federal Mortgage Forgiveness Debt Relief Act only provides for the exclusion of Cancellation of Debt (COD) income relating to qualified principal residence. If you have COD income as the result of a foreclosure or short sale on other property, such as a second (vacation) home, rental, or other business property, you may still be able to exclude COD income under other provisions if: </span></div><ol start="1" type="1"><li class="MsoNormal" style="line-height: normal; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-fareast-font-family: "Times New Roman";">You were discharged the debt through bankruptcy. </span></li>
<li class="MsoNormal" style="line-height: normal; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-fareast-font-family: "Times New Roman";">You were insolvent (limited to level of insolvency).</span></li>
<li class="MsoNormal" style="line-height: normal; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-fareast-font-family: "Times New Roman";">Qualified farm indebtedness was canceled.</span></li>
<li class="MsoNormal" style="line-height: normal; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-fareast-font-family: "Times New Roman";">Debt was Qualified Real Property Business Indebtedness (QRPBI) and you make a federal election.</span></li>
</ol><div class="MsoNormal" style="line-height: normal; margin-left: .25in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="font-family: "Helvetica","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: FrankRuehl; mso-fareast-font-family: "Times New Roman";">If you would like to discuss the best option for your personal financial situation regarding a short sale, foreclosure or bankruptcy, please feel free to contact us at 925.454.4460 or send an e-mail to mike@mkruegerlaw.com</span></div><div class="MsoNormal"><br />
</div>Law Office of Michael T. Kruegerhttp://www.blogger.com/profile/08774003769083213722noreply@blogger.com2tag:blogger.com,1999:blog-6448070887779107111.post-7178821452545290742011-08-09T14:16:00.000-07:002011-08-09T14:18:40.380-07:00What is Bankruptcy?<div class="MsoNormal" style="margin-bottom: 6.0pt;"><span class="st"><span style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">Many people believe bankruptcy is for individuals that run up credit card debt then discharge the debt only to turn around and run up more credit card debt, then discharge the debt again with no repercussions. The </span></span><i><span style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">Bankruptcy Abuse Prevention and Consumer Protection Act</span></i><span class="st"><span style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;"> of 2005 (</span></span><i><span style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">BAPCPA</span></i><span class="st"><span style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">) put an end to this abuse and created a system for individuals who truly need help and want to take the appropriate steps to satisfy their obligations. BAPCPA set new guidelines for the </span></span><span lang="EN" style="color: #111111; font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">bankruptcy chapters available to individuals; Chapter 7 and Chapter 13.</span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt; text-align: center;"><b><span lang="EN" style="color: #111111; font-family: "Georgia","serif"; font-size: 12pt;">CHAPTER 7 BANKRUPTCY </span></b></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="color: #333333; font-family: "Georgia","serif"; font-size: 9pt; line-height: 115%;"><br />
</span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">A chapter 7 Bankruptcy is an option for individuals that satisfy the Means Test. The Means Test is based on your ability to pay your debt. Obviously you wouldn’t be reading this if you felt you could pay your debt, but the Bankruptcy Court has created a different way to determine if you can pay your debt. The Means Test is based on the Median Income in California and is determined by the amount of people in your household: </span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"> </div><table align="left" cellpadding="0" cellspacing="0"><tbody>
<tr> <td height="11" width="323"></td><td height="11" width="323"></td></tr>
<tr><td><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> 1 person = $49,182</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in; text-indent: .5in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> 2 person = $65,097</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> 3 person = $70,684</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> 4 person = $79,971</span></div></td><td bgcolor="white" height="95" style="background: white; border: .75pt solid white; vertical-align: top;" width="334"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> </span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> 5 person = $86,871</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> 6 person = $93,771</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> 7 person = $100,671</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> 8 person = $107,571</span></div></td></tr>
</tbody></table><br />
<span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"> </span> <br />
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">Your income is determined by your 6 month average prior to filing minus qualified deductions from your gross income such as income taxes, mortgage payments, and car payments. If your CMI (Current Monthly Income) is below the median household income you will qualify for a chapter 7 Bankruptcy.</span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">It typically takes 90 days from the day we file your case to the final discharge of a chapter 7 “No Asset” case. You will have to participate in this process. </span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">First, you must provide all documents requested by our firm in our client questionnaire. </span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Second, you must take a pre-filing credit counseling course online. This program takes about an hour. Once you’ve completed the course I will receive your certificate of completion. The certificate must be filed with the bankruptcy documents.</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Third, after your case is filed, a Trustee will be appointed and a 341 Meeting of Creditors will be scheduled. You will have to attend the 341 Meeting of Creditors. A 341 meeting is held in the Trustee’s Office in the Federal Building in Oakland, San Jose, San Francisco, Modesto or Sacramento depending on where you reside. It is not a court room, it is a room with a table and several chairs for the other debtors filing bankruptcy to sit and wait for their meeting. The meeting is held by the Trustee. The Trustee will ask to see your drivers’ license and your social security card. You will be asked questions about your bankruptcy filing under oath. I will be sitting at the other side of the table from you. A chapter 7 341 meeting typically takes no more than 5 minutes. Creditors have the right to attend these meetings. Most often creditors do not actually attend these meetings, but if they are in attendance they have the right to speak regarding the debts owed to them.</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Fourth, similar to the pre-filing credit counseling course, you must take the Financial Management Course or post-bankruptcy class within 45 days of the date of filing. The course is required for discharge and if not timely filed, the case will be closed without a discharge.</span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt; text-align: center;"><b><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">ASSETS</span></b></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">As your attorney, I list all of your assets and liabilities. There are exemptions that are applied to your assets. In California we have two sets of exemptions to choose from; §703 and §704. This chart explains the exemptions under both 703 and 704<span style="color: #333333;"></span></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br />
</div><div align="center"><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: -56.25pt; width: 545px;"><tbody>
<tr style="height: 21.0pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;"> <td colspan="3" nowrap="nowrap" style="background: #D8E4BC; border-right: solid black 1.0pt; border: solid windowtext 1.0pt; height: 21.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 408.65pt;" valign="bottom" width="545"><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: center;"><b><span style="color: black; font-family: "Times New Roman","serif"; font-size: 16pt;">EXEMPTIONS</span></b></div></td> </tr>
<tr style="height: 27.0pt; mso-yfti-irow: 1;"> <td nowrap="nowrap" style="background: #DCE6F1; border-top: none; border: solid windowtext 1.0pt; height: 27.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 14pt;">Asset</span></b></div></td> <td nowrap="nowrap" style="background: #DCE6F1; border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 27.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 14pt;">CA CCP 703</span></b></div></td> <td nowrap="nowrap" style="background: #DCE6F1; border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 27.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 14pt;">CA CCP 704</span></b></div></td> </tr>
<tr style="height: 15.75pt; mso-yfti-irow: 2;"> <td nowrap="nowrap" style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">Principal Residence</span></b></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$22,075 </span></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">100,000</span></div></td> </tr>
<tr style="height: 15.75pt; mso-yfti-irow: 3;"> <td nowrap="nowrap" style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">Motor Vehicle</span></b></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$3,525 </span></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$2,725 </span></div></td> </tr>
<tr style="height: 35.5pt; mso-yfti-irow: 4;"> <td style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 35.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">Household Goods & Personal Effects</span></b></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 35.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-size: 12pt;">Unlimited number of items each worth $550 or less </span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 35.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-size: 12pt;">ordinary and necessary household goods-no limit</span></div></td> </tr>
<tr style="height: 15.75pt; mso-yfti-irow: 5;"> <td nowrap="nowrap" style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">Jewelry</span></b></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$1,425 </span></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$7,175 </span></div></td> </tr>
<tr style="height: 15.75pt; mso-yfti-irow: 6;"> <td nowrap="nowrap" style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">tools of trade</span></b></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$2,200 </span></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-size: 12pt;">$7175 per debtor</span></div></td> </tr>
<tr style="height: 21.1pt; mso-yfti-irow: 7;"> <td style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 21.1pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">Residence building materials</span></b></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 21.1pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-size: 12pt;"> NA</span></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 21.1pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">2,875</span></div></td> </tr>
<tr style="height: 17.5pt; mso-yfti-irow: 8;"> <td style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 17.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">life insurance (cash value)</span></b></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 17.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$11,800 </span></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 17.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-size: 12pt;">$11,475 per debtor</span></div></td> </tr>
<tr style="height: 31.5pt; mso-yfti-irow: 9;"> <td style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 31.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">claim for personal injury</span></b></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 31.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$22,075 </span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 31.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-size: 12pt;">amount necessary for support</span></div></td> </tr>
<tr style="height: 17.5pt; mso-yfti-irow: 10;"> <td style="background: #D8E4BC; border-bottom: none; border-left: solid windowtext 1.0pt; border-right: solid windowtext 1.0pt; border-top: none; height: 17.5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">ERISA qualified benefits</span></b></div></td> <td style="border-right: solid windowtext 1.0pt; border: none; height: 17.5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-size: 12pt;">Unlimited</span></div></td> <td nowrap="nowrap" style="border-right: solid windowtext 1.0pt; border: none; height: 17.5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black; font-size: 12pt;"> unlimited</span></div></td> </tr>
<tr style="height: 22.0pt; mso-yfti-irow: 11;"> <td style="background: #D8E4BC; border: solid windowtext 1.0pt; height: 22.0pt; mso-border-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">Wildcard applied to any item</span></b></div></td> <td nowrap="nowrap" style="border-left: none; border: solid windowtext 1.0pt; height: 22.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: right;"><span style="color: black; font-size: 12pt;">$21,825 </span></div></td> <td nowrap="nowrap" style="border-left: none; border: solid windowtext 1.0pt; height: 22.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black;"> NA</span></div></td> </tr>
<tr style="height: 28.5pt; mso-yfti-irow: 12; mso-yfti-lastrow: yes;"> <td style="background: #D8E4BC; border-top: none; border: solid windowtext 1.0pt; height: 28.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 171.0pt;" valign="bottom" width="228"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: black; font-size: 12pt;">bank accounts</span></b></div></td> <td nowrap="nowrap" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 28.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 110.9pt;" valign="bottom" width="148"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black;"> NA</span></div></td> <td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 28.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 126.75pt;" valign="bottom" width="169"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: black;">2875 individual 4300 joint</span></div></td> </tr>
</tbody></table></div><div class="MsoNormal" style="line-height: 150%; margin-bottom: 6.0pt; text-align: justify;"><br />
</div><div class="MsoNormal" style="margin-bottom: 6.0pt; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;">Once we determine the non-exempt assets, assets above or outside the protection of the exemptions, the Trustee seizes the assets to satisfy the debts owed. If it is determined that you have no assets, the Trustee approves a "No Asset" case and creditors will not receive anything. Pending no objections to dischargeability from creditors, your case will be discharged from liability for most unsecured debts. Certain debts are non-dischargeable such as:</span><span style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 115%;"></span></div><div class="MsoListParagraphCxSpFirst" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span lang="EN" style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">M</span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">ost taxes</span></div><div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Student loans</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Domestic support obligation</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Debts for most fines, penalties, forfeitures or criminal obligations</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Debts for personal injuries or death caused by the debtor's operation of a motor vehicle while intoxicated</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Debts which are not properly listed by the debtor</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Debts for which the debtor has given up the discharge protection by signing a reaffirmation agreement in compliance with the Bankruptcy Code</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Debts owed to certain retirement plans</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoListParagraphCxSpLast" style="line-height: normal; margin-left: 24.75pt; mso-add-space: auto; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><span style="font-family: Symbol; font-size: 12pt;">·<span style="font: 7pt "Times New Roman";"> </span></span><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Debts that the bankruptcy court has ruled in this case are not discharged</span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-outline-level: 4; text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt; text-align: center;"><b><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">CHAPTER 13 BANKRUPTCY</span></b><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">A chapter 13 bankruptcy is a bankruptcy payment plan that allows you to retain your property and pay back all, or a portion of your debts over a period of time. Under this chapter you and I propose a payment plan that fits your budget. Each month you will pay the Trustee the fixed budget amount over a period of three or five years. A Chapter 13 bankruptcy is most appropriate for an individual with income who does not currently have the ability to pay all of their debts in full. </span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;"><br />
Priority creditors are paid first. These creditors are the government agencies like the IRS or the EDD. Secured creditors are paid after the priority creditors. These creditors are the mortgage banks and auto loan banks, or other creditors that have a lien against property that you still own. Unsecured creditors are paid last and often are not paid at all in a Chapter 13. </span><span style="font-family: "Georgia","serif"; font-size: 12pt;"></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">The Means Test is used in a Chapter 13 to determine if you will be on a 3 year of 5 year payment plan. If you satisfy the Means Test you can choose between the 3 and 5 year plan. If you do not satisfy the Means Test you must follow the 5 year plan. You must have income to file for bankruptcy under Chapter 13 because you are paying back creditors through a payment plan. You must also have less than $360,475 in unsecured debt and less than $1,081,400 in secured debt. </span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">Participation in a Chapter 13 is the same as in a Chapter 7 above. We must still determine your assets. Instead of liquidating your assets, the payment plan will reflect the lump sum the Trustee would receive if your assets were liquidated. For example, if you have $10,000 in non-exempt assets, your payment plan will be a monthly amount that will pay back no less than $10,000 over your 3 or 5 year payment plan.</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">The 341 Meeting of Creditors typically takes longer than a Chapter 7 Meeting of Creditors because the Trustee will review parts of the plan with you at the meeting. Your first payment of the payment plan will be 30 days from the filing of the bankruptcy and this is usually before the first meeting. The payment must be made via cashier’s check.</span></div><div align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 7.5pt; text-align: center;"><br />
</div><div align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 7.5pt; text-align: center;"><b style="mso-bidi-font-weight: normal;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 150%;">ARREARS AND LIEN STRIP</span></b></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">One of the benefits of filing a chapter 13 is for homeowners that are behind on their mortgage or they have a second mortgage and their home is “underwater” (worth less than their first mortgage.) A homeowner in arrears (behind on their mortgage) can make up these late payments over the 3 or 5 year payment plan. This option allows individuals who are facing foreclosure to become current on their mortgage and stay in their homes. </span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><br />
</div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">A “Lien Strip” is a bankruptcy tool that is filed with the court stating that the home is worth less than the first mortgage amount and the second mortgage no longer has a secured interest. This is based on the understanding that a secured debt can only be secured if the collateral has value. For example, a home worth $100,000 with a first mortgage of $125,000 and a second mortgage of $50,000 has only $100,000 in secured debt. This means that the second mortgage can be “stripped” and will be considered unsecured debt similar to a credit card. Since unsecured creditors are paid last in a Chapter 13, the second mortgage is often paid very little if anything at all through the payment plan. Once the 3 or 5 year payment plan is completed the homeowner has only the first mortgage on the property because the second mortgage has been discharged.</span></div><div class="MsoNormal" style="line-height: 150%; margin-bottom: 7.5pt; text-align: justify;"><br />
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</div><div align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 7.5pt; text-align: center;"><b style="mso-bidi-font-weight: normal;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt; line-height: 150%;">FREE CONSULTATION</span></b></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 7.5pt; text-align: justify;"><span lang="EN" style="font-family: "Georgia","serif"; font-size: 12pt;">I hope this brief summary of Bankruptcy Law has been helpful to you. If you would like to discuss your specific situation in a free consultation, please feel free to contact our office at 925.454.4460 or go to our<a href="http://www.mkruegerlaw.com/"> website</a> and click the "contact us" tab. </span></div><div class="MsoNormal"><br />
</div>Law Office of Michael T. Kruegerhttp://www.blogger.com/profile/08774003769083213722noreply@blogger.com0tag:blogger.com,1999:blog-6448070887779107111.post-64468530582047171512011-06-07T14:13:00.000-07:002011-06-07T14:14:56.370-07:005 Tips to Avoid Loan Modification Scams<div class="leftColBox"><h2 class="leftCol">These 5 tips are courtesy of the California Office of Attorney General. <a href="http://ag.ca.gov/loanmod/">Loan Modification Scam Alert</a></h2><h2 class="leftCol"> </h2><h2 class="leftCol">5 Tips to Avoid Being Scammed</h2><div class="listContainer"><ol class="tips"><li><span class="imp">Don't</span> pay up-front fees. Foreclosure consultants are prohibited by law from collecting money before services are performed.</li>
<li><span class="imp">Don't</span> ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.</li>
<li><span class="imp">Don't</span> transfer title or sell your house to a "foreclosure rescuer." Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.</li>
<li><span class="imp">Don't</span> pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.</li>
<li><span class="imp">Never</span> sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them. </li>
</ol><div style="text-align: center;"><b> </b></div><div style="text-align: center;"><b> </b></div><div style="text-align: center;"><b>DISCLAIMER</b></div>This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. <ol class="tips"></ol></div></div>Law Office of Michael T. Kruegerhttp://www.blogger.com/profile/08774003769083213722noreply@blogger.com2tag:blogger.com,1999:blog-6448070887779107111.post-76269026427543170502011-05-11T17:08:00.000-07:002011-05-13T13:30:20.056-07:00Loan Modification ScamsOver the past several months I have had bankruptcy clients tell me stories of paying money for forensic loan audits and loan modifications to companies that have taken their money up front. They are shocked when I tell them that the reason they haven't had any success with those companies is because these companies are illegal scams. I have list a few links to articles on the loan modification and forensic audit scams that have been shut down over the past few months. No loan modification company is allowed to take money up front. Forensic loan audits are scams!<br />
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<a href="http://www.inlandnewstoday.com/story.php?s=19074">http://www.inlandnewstoday.com/story.php?s=19074</a><br />
<a href="http://www.scpr.org/news/2011/04/29/department-housing-and-urban-development-launches-/">http://www.scpr.org/news/2011/04/29/department-housing-and-urban-development-launches-/</a><br />
<a href="http://www.prnewswire.com/news-releases/homeowners-still-enduring-foreclosures-with-little-help-from-banks-120392114.html">http://www.prnewswire.com/news-releases/homeowners-still-enduring-foreclosures-with-little-help-from-banks-120392114.html</a><br />
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Visit my website to learn more about bankruptcy<br />
<a href="http://www.mkruegerlaw.com/">www.mkruegerlaw.com</a>Law Office of Michael T. Kruegerhttp://www.blogger.com/profile/08774003769083213722noreply@blogger.com1tag:blogger.com,1999:blog-6448070887779107111.post-26922231176386730552011-04-14T18:41:00.000-07:002011-04-14T18:41:13.545-07:00Chapter 13 BankruptcyA chapter 13 Bankruptcy is an option for individuals that earn a monthly income and can support making minimum payments of a period of 5 years to their secured creditors. This can be greatly beneficial for a homeowner who is in arrears on his or her first mortgage. In the current economic climate, the majority of homeowners have seen a dramatic drop in their home price. This often leads to mortgage becoming unsecured. Under the Bankruptcy code, property is only secured up to the value of the property. This means that if a home has a mortgage for $150,000 and the home is appraised at $100,000, the mortgage is only secured to the amount of $100,000. <br />
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Unfortunately there is nothing that an attorney can do to reduce the 1st mortgage on a principle residence home through Bankruptcy. However, there is something an attorney can do to reduce the 2nd mortgage on a principle residence or the 1st mortgage of a secondary home through a Chapter 13 Bankruptcy. The attorney can file a motion to devalue the lien, more commonly referred to as "Lien Stripping." <br />
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A Lien Strip can be a great benefit for a Chapter 13 Bankruptcy client. If a Bankruptcy client is able to stay current on his or her first mortgage, the lien strip can demand that the court consider the second mortgage unsecured debt. Once the court approves the lien strip, the second mortgage is treated the same as credit card debt. The amount that the Bankruptcy client pays to the unsecured creditors is determined by the liquidation assessment.<br />
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A liquidation assessment takes into consideration how much the unsecured creditors could be paid if the Bankruptcy client were to liquidation of his or her assets for their present value, minus the exemptions available. <br />
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For example:<br />
<ul><li> if Bankruptcy client A owes $100,000 in credit card debt and $90,000 on a second mortgage that has been lien stripped, client A will owe $190,000 in unsecured debt.</li>
<li>Client A owns a boat that could be sold today for $40,000</li>
<li>Client A also owns a very nice car worth $30,000.</li>
<li>Client A uses an exemption and reduces the assessed value of the boat to $30,000 and the car to $20,000 for a total of $50,000 in assets.</li>
<li>Client A will then be required to pay $50,000 over the next 5 years to the unsecured creditors.</li>
<li>Client A will have $140,000 of the unsecured debt discharged.</li>
</ul>If you would like to learn more about Bankruptcy, contact the Law Office of Michael T. Krueger at 925.454.4460 or visit us at our website www.kruegerlaw.info<br />
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<div style="text-align: center;"><b>DISCLAIMER</b></div>This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.Law Office of Michael T. Kruegerhttp://www.blogger.com/profile/08774003769083213722noreply@blogger.com0