San Diego Bankruptcy Law Firm. 877-GOBK619

This blog is updated by San Diego Bankruptcy Law Firm. The blog is designed to educate consumers about their rights under the Bankruptcy Code.

Bankruptcy can STOP FORECLOSURE, ELIMINATE DEBT AND PROTECT YOUR ASSETS! Call us for a free consultation at 877-GOBK619 or 619-260-1800. Visit us at

We are a debt relief agency and help people file for Bankruptcy under the Bankruptcy Code.

Thursday, October 28, 2010

Rebuilding Your Credit after Bankruptcy

Here is a great article I found on MSN Money
Make sure to read it at:

Bounce back fast after bankruptcy

Carefully rebuild your credit, and you could qualify for almost normal rates, even a mortgage, in a year or two. Here's what you need to do.

By Liz Pulliam Weston
Almost anyone can get credit soon after a bankruptcy. It's just a matter of knowing how.

It's true that bankruptcy deals a devastating blow to your credit and your credit score, the three-digit number lenders use to gauge your creditworthiness. But the effects don't have to be lasting.

Long before the bankruptcy drops off your credit report, you could be qualifying for loans with good rates and terms.

Nothing is forever
Ken from Chicago filed Chapter 7 liquidation after unemployment and overspending caused him to rack up more than $20,000 in credit card and other unsecured debt. Four years later, his credit scores ranged from 655 to 719, decent numbers that are just below the cutoff to get most lenders' very best rates.

"I . . . applied for a secured credit card (usually reserved for people with troubled credit) and was informed that I qualified for an unsecured card -- a possibility I hadn't even considered," Ken said. "While I am going to be very careful with my new credit (card), I am heartened that creditors consider me an acceptable risk."If you're recently bankrupted, here are two things you need to keep in mind:

Nothing in credit is "forever." A bankruptcy legally can remain on your credit report for up to 10 years, but its effect on your credit score can start to diminish the day your case is closed -- if you adopt responsible credit habits such as paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once.
You have to get and use credit to build your credit score. Living on a cash-only basis may be a smart choice for those who really can't handle credit. But if you want to rebuild your credit score, you can't sit on the sidelines.

Learn from your mistakes
Although repeat bankrupts show that getting credit after a Chapter 7 or 13 filing is possible, you shouldn't want to emulate those who file more than once.

At first glance, people who file more than one bankruptcy seem to be beating the system: They run up big bills and then walk away.

Video on MSN Money
Video: How's your credit?

Where to go to get free reports -- and how to interpret them when you've got one.Think about it a little more, though, and you'll see these multiple bankrupts are really defeating themselves. Their debts and credit history often mean they're paying out big bucks in high interest payments during the time when they're prohibited from filing another bankruptcy. (The 2005 bankruptcy law provides that, under Chapter 7, eight years must elapse before you can refile. If you go for Chapter 13 after a Chapter 7, you must wait four years. Going from one Chapter 13 to another, two years must elapse.)

And most people can't file for Chapter 7 liquidation if they have significant assets to protect, such as home equity or savings. So these folks who are repeatedly going broke often have little to show for all the money that's leaving their pockets. Instead of building wealth over time, they're losing ground.

Instead, use your bankruptcy as a wake-up call to figure out what's wrong with your finances and fix it.

If your problem was overspending, you'll find plenty of information on this site about creating and sticking to a budget (see "Your 5 minute guide to budgeting").
If you didn't have enough savings to survive a job loss or other setback, get serious about establishing an emergency fund.
If you were sunk by medical bills, seek a job with insurance coverage or check to see if your state offers coverage.

Clean up your credit report
One common problem people emerging from bankruptcy often face is that credit reports frequently show accounts as open and overdue -- when in fact they were closed and the obligations wiped out as part of the bankruptcy.

If you encounter this, you need to contact the credit bureaus and insist that those accounts be properly reported as "included in bankruptcy." It's the only way your credit can recover.

If you have other serious mistakes on your credit report, those need to be corrected as well. Your credit score is based on information in your credit report, so errors on your report can seriously dampen your score.

Get a secured credit card
You need two types of credit to quickly rebuild your credit score:

Installment: auto loans, student loans or mortgages
Revolving: credit cards or home equity lines of credit
Continued: Light credit card use builds credit

Most recent bankrupts have trouble qualifying for a regular, unsecured credit card. So the best solution usually is a secured card, which generally gives you a credit limit that's equal to an amount you deposit at the issuing bank.

Typically, that's $200 to $500, which may seem like a pittance compared with the credit limits you enjoyed before your bankruptcy. But don't make the mistake of using your available credit. Maxing out your credit cards hurts your credit score.

You don't want to charge more than 30% or so of your credit limit, and you want to pay the balance off in full each month. Light, regular use of a credit card is what helps build your credit.

And contrary to what you might have heard, you typically don't need to carry a balance or pay credit card interest to build your score, since the leading credit scoring formula doesn't distinguish between balances that are paid off and balances that are carried month to month. Get in the habit now of not charging more than you can pay off every month; your credit score and your finances will be the better for it.

You also shouldn't grab just any secured card. Look for the following:

No application fee and reasonable annual fee. Some secured cards tack huge upfront and annual charges onto their accounts; you don't need to pay these to build your credit.
Reports to the major credit bureaus. You're not doing your credit score any good unless your payment history is being reported to the three major bureaus: Equifax, Experian and TransUnion. Before you apply for a card, call and ask if the issuer regularly reports to all three.
Converts to an unsecured card after 12-18 months of on-time payments. Good behavior should get you upgraded to a regular credit card within a year or two.

Get an installment loan
If you still have student loans (which typically aren't dischargeable in bankruptcy), you can use them to rebuild your score. Make your payments on time, all the time, and try to pay more than you owe whenever possible. Next to making on-time payments, paying down your existing debt is one of the best ways to improve your credit score.

Ken of Chicago took this to heart, making double or triple the minimum payments required to retire his $23,500 student loan debt within three years of his bankruptcy filing.

"The fact that I had to repay my student loans (rather than having them discharged) might have helped me in the long run," he said.

It's unlikely in the current credit climate, but you may be able to qualify for a high-rate mortgage as little as six months after a bankruptcy. You're probably better off waiting until you can qualify for an FHA loan, though. You can typically get one just two years after your bankruptcy case has closed, as long as you've maintained good credit habits since then. FHA loans have interest rates that are usually only half a percentage point higher than regular mortgage rates.

Just make sure you really can afford a home before you buy one. Many people wind up in bankruptcy court because they stretched too far to buy a house and can't keep up with all the attendant costs of homeownership, said bankruptcy expert Elizabeth Warren of Harvard University. (See "Don't bite off too much house" for more details.)

Video on MSN Money
Video: How's your credit?

Where to go to get free reports -- and how to interpret them when you've got one.Auto loans can also help you rebuild your credit -- just be prepared to pay nose-bleeding rates at first.

"My first vehicle out of bankruptcy (had an interest rate of) 21%," said Chance Nelson of Indianapolis, who applied for the loan just a few months after his debts were discharged. "After paying this for about two years, I went and traded it in and purchased another (at) 13.99%."

Nelson refinanced this second loan a year later at 7.95%. Five years after his bankruptcy filing, Nelson was paying a reasonable 6% rate for his auto loan.

If you go this route, try to make a big down payment and choose a loan that doesn't have a prepayment penalty. That way, you can refinance the car to a lower interest rate as your credit improves.

Liz Pulliam Weston's latest book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Wednesday, October 27, 2010

How to Avoid Bankruptcy with Debt Settlement, Debt Negotiation or Debt Relief


Debt settlement, debt negotiation and debt relief all mean the same thing. It is a process by which the debtor negotiates an agreement to pay a portion of the debt owed in exchange for relief from the remainder of the debt. If a credit card company or other creditor agrees to a debt settlement the rest of the debt is eliminated forever, avoiding Bankruptcy.

Most consumers have tried to negotiate a settlement on their own but have failed. Choosing to retain the San Diego Bankruptcy Law Firm to negotiate your debt relief can help protect your rights and will generally result in a better offer from the credit companies who know that they will receive nothing if you file for Bankruptcy.

The San Diego Bankruptcy Law Firm can you help you avoid bankruptcy and attempt to negotiate a debt settlement on your behalf.
What is Debt Settlement, Debt Negotiation or Debt Relief?

Debt Settlement, Debt Negotiation and Debt Relief all refer to the same thing it is the process of negotiation with creditors by a professional agency or law firm which results in having to payback only a percentage of the debt you owe while wiping out the rest of your debt.

How does a Debt Negotiation program work?

The San Diego Bankruptcy Law Firm and its team of attorneys will negotiate with your creditors. Typically, if a creditor cannot collect on the debt, they write it off as a loss on their taxes; however they may still pursue a law suit to recover their money. Therefore, it is in their best interest to negotiate or settle the debt for a fraction of what you owe, rather than receive nothing. Working with the San Diego Bankruptcy Law Firm can help protect your rights and in the event that a lawsuit is threatened or filed, we can help you pursue Bankruptcy as a last resort. Creditors may reach agreements to settle debt in order to recover a portion of monies they often would not of have been able to collect.

Will Debt Relief affect my credit?

This depends on your current situation. Typically, you must stop making your payments so that the Credit Card Company will negotiate your debt. Your credit may be adversely affected due to non-payment of existing debt that you wish to settle. In the process of reaching an agreement with your creditors, many items can be negotiated such as removing negative remarks. This depends on the creditor. However, once your Credit Card Debt has been settled you can begin to rebuild your credit.

How Much does it Cost?

Every case is different and the cost will depend upon how much you owe and how much we are able to save you. Contact us today to see if you qualify for debt settlement. We can be reached 24 hours a day at 619-260-1800 or 877-GOBK619.

California Foreclosure Basics. How to Stop a Foreclosure

The Bankruptcy Attorneys at the San Diego Bankruptcy Law Firm are always looking for helpful information for individuals struggling with keeping their home. Here is some information on foreclosure from a great website:

For more information on stopping a foreclosure with a bunkruptcy please contact us at 877-GOBK619 or 619-260-1800 or visit our website at Speak to an attorney today, there is no charge for an initial consultation.

California Foreclosure Basics

Definition of Foreclosure

Foreclosure is a process, governed by California state law, by which a home is sold to satisfy an unpaid debt such as a home mortgage, a tax lien or other debt.

What Causes a Foreclosure

A foreclosure is initiated once a default occurs. A default can be triggered by a failure to make a payment on a deed of trust or mortgage, or, for example, can also happen if a property is sold without permission or if property taxes aren’t paid. The note and mortgage will stipulate what the lender considers a default.

California Foreclosure Process
The California foreclosure process typically takes about 200 days starting from the time that a homeowner misses their first payment to the point when the home is auctioned off in a foreclosure sale. Though this might seem like a lot of time, the four month process moves very quickly and a homeowner must act immediately in order to take advantage of as many options as possible to avoid foreclosure.

Foreclosures in California are typically non-judicial under power of sale in deed of trust. This means that the foreclosure process occurs without any court intervention, with requirements for the foreclosure process set by state statute. The lender will typically send a Notice of Intent to Accelerate after 60 days. Next, the lender will contact the homeowner 30 days before sending the first of two notices in the foreclosure process, a Notice of Default. The Notice of Default gives the homeowner a 90-day window until the lender takes the next step, which is a Notice of Sale, the second notice required by California law. The Notice of Sale then gives the homeowner 20 days before the foreclosure sale takes place.

A homeowner has a right to cure the default up to within 5 days before the sale. In a non-judicial foreclosure, commonplace in California, a lender is not able to seek a deficiency judgment*. (*A deficiency judgment allows a bank or lender to obtain a judgment lien against a homeowner when a foreclosure sale does not produce enough to cover the full amount due on a home loan.) Without a deficiency judgment a homeowner is not given a redemption period. What all this basically means is that not having a redemption period available after the foreclosure sale makes the foreclosure sale date the deadline for a California homeowner to rescue his home. (You can find more information pertaining to California foreclosure statutes, Cal. Civ. Code §§ 2924 to 2924l, on the California Legislative Information website, but the reading contains a lot of legalese, so be forewarned.)

However, after the foreclosure sale, a homeowner may still remain in the home for some time while the legal eviction process churns on. After a foreclosure sale happens, if the foreclosed homeowner has not moved out of the home, the lender/bank or new owner is required to produce a 3-Day Notice to Quit. Once the three days expire and a homeowner still has not moved, then the new owner is required to start the legal eviction process by filing an unlawful detainer, which basically means that the foreclosed homeowner has 30 days still before the sheriff will come out to force an eviction.

California Foreclosure Timeline
From the day that a homeowner first misses their mortgage payment, they have 200 days until a foreclosure sale, and 233 days total until a foreclosed homeowner is evicted.

Avoiding a Foreclosure in California
Delaying or stopping a foreclosure may be possible if the foreclosure was based on false information (for example, the lender substantially overstated the amount you had to pay to reinstate your mortgage, depriving you of your reinstatement rights under California law). Other reasons why you might be able to prevent a foreclosure include:

bringing a case to court that could delay or stop the foreclosure because
a loan origination didn’t abide by fair lending practices or other required mortgage regulations according to federal and California law,
failure by the foreclosing party to follow the requirements of a non-judicial foreclosure in California, for example, not properly serving the homeowner with a notice of default, or
the party attempting to foreclose is not legally entitled to do so,
you are able to short-sale the home, and
you are able to qualify for a loan workout or bankruptcy protection.
This list is not all inclusive, there are other options and reasons why you may be entitled to preventing a foreclosure. We encourage you to ultimately seek professional help since these situations can be mentally and emotionally taxing on a homeowner, not to mention extremely time-sensitive. Start by educating yourself through the foreclosure prevention resources available on this website to help you understand what it is exactly that you are facing in a foreclosure, and in the end that will help you to make better decisions with how you will save your home.

Next Step…
Make sure you understand the tax implications and what the results may be if you pursue a foreclosure defense strategy or solution.

Friday, July 30, 2010

The San Diego Bankruptcy Law Firm Will Serve Clients Affected by the Closing of Kerry Steigerwalt's Pacific Law Center

The San Diego Bankruptcy Law Firm announces that it will serve clients that may have been affected by the "winding down" of Kerry Steigerwalt's Pacific Law Center and will only charge the client the remainder of what they already owe Pacific Law Center.

"The San Diego Bankruptcy Law firm has offered to serve clients of Kerry Steigerwalt's Pacific Law Center that may have been affected by the closing" San Diego, CA (PRWEB) July 30, 2010

On June 30, 2010 the Union Tribune published an article entitled: Pacific Law Center "winding down," not adding clients. The Bankruptcy Attorneys at the San Diego Bankruptcy Law Firm have noticed an increase in inquiries from clients of Kerry Steigerwalt's Pacific Law Center. "We probably receive a couple of calls a week from individuals who are concerned about their case," says Todd Williams and Scott Schlegel who own the San Diego Bankruptcy Firm.

As a result of the demand the San Diego Bankruptcy Law Firm, with offices in Mission Valley, has offered to serve clients of Kerry Steigerwalt's Pacific Law Center that may have been affected by the "winding down" of Kerry Steigerwalt's Pacific Law Center and will only charge new clients the remainder of what they owe to Pacific Law Center. "Essentially, we can substitute in at no additional cost to the client," says Mr. Williams.

We think it is our obligation as professionals and as attorneys here in San Diego to help protect San Diegans when they need it most. "The last thing someone facing bankruptcy needs is to feel abandoned or to have to hire another attorney to finish something that has been partially paid for, especially when they are financially burdened already," says Maureen Enmark a bankruptcy attorney with the San Diego Bankruptcy Law Firm].

Pacific Law Center has indicated that "it is well-equipped to represent existing clients to the fullest" and the San Diego Bankruptcy Law Firm does not wish to interfere with clients that are pleased with their representation. However, for those that feel that they have been affected please feel free to contact us immediately to set up a free consultation at 619-260-1800, toll free at 877-GO-BK-619 or visit us on the web at

Thursday, July 22, 2010

We Take Abandoned Kerry Steigerwalt Pacific Law Center Clients

San Diego Bankruptcy Law Firm at will take clients abandoned by Kerry Steigerwalt's Pacific Law Center. We will only charge you what you owe to Pacific Law Center. Call us today as this offer is limited. Please see the latest article to surface about Kerry Steigerwalt's Pacific Law Center in the San Diego Reader. 619-260-1800

It Wasn’t the Economy, Stupid
By Don Bauder | Published Wednesday, July 21, 2010


The heavily advertised Pacific Law Center was once San Diego’s best-known law firm, but its most controversial. Two years ago, Kerry Steigerwalt, a criminal lawyer who is regularly quoted on local television, gained control of the firm and changed its name to Kerry Steigerwalt’s Pacific Law Center. It became a household name.

In a deposition for a lawsuit filed against the center last year, Steigerwalt claimed that the firm’s previous owners had wooed him and fed him false information. He said he was the “fall guy.”

Steigerwalt has indeed fallen. The firm, which specializes in driving-under-the-influence, personal injury, and defective-product cases, while purportedly counseling those with financial woes, intends to take no new cases but will wrap up old ones and eventually close down. Just recently, the Yellow Book sued the firm, saying it hasn’t paid for more than $200,000 in advertising. UTC Properties has also sued, saying the firm hasn’t paid rent at its posh La Jolla suite since the beginning of the year and owes almost $200,000.

Tom Slattery, a former lawyer at the firm, filed a massive complaint about its practices with the California State Bar, sending copies to state officials including the attorney general’s office. Some current and former lawyers say that the bar is probing the matter, but the bar won’t confirm that. Last week, Slattery filed suit against the firm, claiming that early this year, Steigerwalt’s firm was trying to stave off an “imminent collapse.”

The law firm has a D+ rating with the Better Business Bureau, generating 79 complaints in three years. That D+ is a slight improvement on an earlier F rating. Since 2004, there have been more than 40 superior court suits filed against the firm under both its names.

Steigerwalt blames most of his problems on the weak economy forcing criminal defendants to go to public defenders. But the inescapable truth is that he didn’t do his homework when taking over Pacific Law Center. On June 30, a new law firm registered with the secretary of state: Steigerwalt Law Firm, APC.

One key suit was filed in 2008 by Carl Hancock, who worked for Pacific Law Center for only nine months. The suit charged that Steigerwalt’s entrance into the firm was a “sham sales transaction for the purpose of protecting the assets” of the firm’s founders, Larry Majors, his son Austin Majors, and son-in-law Jeffrey Phillips, a Phoenix attorney. Hancock settled the suit early this year.

Another suit was filed last year by Dagoberto Llamas, who alleged he was blatantly cheated by the firm, which took big bucks from him to handle a criminal case in which he was charged with driving under the influence, battery, hit and run, and contempt of court. He was initially assured he could win the case but subsequently told it was hopeless. Llamas’s case against the law firm was handled by well-known criminal attorney Michael Pancer, his son Ian, and Doug Gilliland.

The suit says that the business model of both Kerry Steigerwalt’s Pacific Law Center and its predecessor “is the brainchild of a convicted felon and car dealer from Arizona named Larry Majors. After serving time for fraud in Arizona, Majors, a non-lawyer, opened a law firm in San Antonio, Texas, using a down-on-his-luck lawyer.… Majors launched a massive television advertising campaign to attract clients.” But Majors fled Texas after a bankruptcy judge called the firm “a borderline criminal enterprise.”

Then, according to the Pancer team’s account, Majors set up shop in San Diego with a lawyer who was eventually disbarred. Majors vamoosed when Texas authorities charged him with absconding with clients’ money. In 1993, Pacific Law Center opened in San Diego with son Austin Majors as executive director. The office was in La Jolla, but the listed address was that of son-in-law Jeffrey Phillips’s Phoenix law firm.

There has always been controversy about who owned and ran Pacific Law Center. According to Slattery’s testimony, Phillips was the owner. When Steigerwalt came in two years ago, he put in no money and got 51 percent of the firm, although at around the same time he gave part of his own practice to Phillips. Steigerwalt claims that Robert Arentz, then a member of Phillips’s Arizona firm and also one who hung around the La Jolla firm, had 100 percent of Pacific Law Center and then 49 percent of the successor after Steigerwalt took control. In any case, Phillips basically ran Pacific Law Center, according to the Llamas and Slattery suits. Phillips did not respond to calls, and Arentz would not comment.

Phillips and Arentz have run into trouble with the State Bar of Arizona for using the same tactics that the San Diego firm used, both pre- and post-Steigerwalt. Phillips was censured and placed on two years of intensive probation by the Arizona bar in 2002. One of the reasons: so-called “intake personnel at his firm” who interviewed potential clients and failed to identify themselves as non-lawyers.

Late last year, the Arizona bar acted again: it recommended that Phillips be suspended for six months and a day and Arentz be suspended for 60 days. The bar said that the two “acted for their own immense financial benefit, overusing non-attorney employees for inappropriate tasks…to squeeze every last penny out of their clients.”

The Arizona Supreme Court upheld Arentz’s suspension but agreed to review Phillips’s. The bar had investigated 22 complaints, mainly on aggressive sales practices of non-attorney personnel.

And that goes to the heart of the complaints against Kerry Steigerwalt’s Pacific Law Center and its predecessor, both of which spent almost $5 million a year on advertising, according to Llamas’s suit. So-called “intake coordinators,” later called “legal administrators” (similar to those used by Larry Majors in Texas and Phillips in Arizona), greet the often impecunious people who have been swayed by the advertising.

According to the Pancer team, the intake coordinators are often former car salesmen who con the clients, asking initially for a high price and then coming down when meeting resistance. “The fee is based on how much the client is able to pay, not on traditionally recognized criteria such as complexity or novelty of legal issues and consumption of attorney time,” says the suit, which was dismissed on summary judgment and is now on appeal. Pacific Law Center’s intake coordinator told Llamas that the firm wins 90 percent of its Department of Motor Vehicles hearings, when the figure is actually 25 percent.

If Llamas would pay the firm’s price, the coordinator said he could guarantee Llamas would not lose his driver’s license, according to the suit. But in the end, an attorney told Llamas his case was indefensible and he should plead guilty.

The Llamas, Slattery, and Hancock suits stress that the sales personnel engage in the unauthorized practice of law.

Under rules of the California bar, a lawyer has to sign a retainer agreement in front of a client. But at Pacific Law Center, the lawyer who signed the document would say he was not the one who would handle the case. Thus, the potential client did not learn his rights or the strength of the case from an attorney handling it. Steigerwalt said in his deposition that he changed this procedure but couldn’t remember when.

In his deposition, Steigerwalt said Pacific Law Center lawyers “were schleps,” according to the Llamas suit. Also, Steigerwalt admitted that he knew of the pressure tactics used by the intake coordinators. But he didn’t change things significantly, say the Llamas and Slattery suits. Indeed, Steigerwalt, said in the Slattery suit to make $900,000 yearly, was constantly checking to see if the firm was bringing in the daily gross receipts it needed to keep its head above water.

Says Steigerwalt, “In forming [Kerry Steigerwalt’s Pacific Law Center] I realized there were challenges. I just did not realize the extent of those challenges.”

He won’t answer questions about the Llamas suit because it was dismissed. Ripostes Michael Pancer, “It is true that the summary judgment motion was granted, but that does not affect the validity of statements made under oath in support of our lawsuit.” That includes deposition statements made by Steigerwalt.

Says Pancer, “I will give Kerry Steigerwalt the benefit of the doubt when he claims he wanted to turn [Pacific Law Center] around. But it was obvious to those of us who practice criminal defense that the business model was ethically flawed and could not be saved no matter what his best intentions were.” Steigerwalt’s adventure represented a “desire for profit overwhelming good judgment.”

Thursday, July 1, 2010

Kerry Steigerwalt's Pacific Law Center Closing---San Diego Bankruptcy Law Firm Will Help Abandoned Clients

Kerry Steigerwalt's Pacific Law Center appears to be closing down. Bankruptcy Attorneys at the San Diego Bankruptcy Law Firm will take abandoned clients for what they owe to Pacific Law Center. The San Diego Bankruptcy Law Firm is committed to our community and to our clients. The last thing someone facing bankruptcy needs is to lose their money because their law firm went out of business. Contact us at or call us at 619-260-1800.


Pacific Law Center 'winding down,' not adding clients

Wednesday, June 30, 2010 at 9:37 p.m.

Kerry Steigerwalt’s Pacific Law Center, the highly visible firm with its ubiquitous television ads, has stopped taking new clients and is “winding down” its business, the firm’s owner said Wednesday.

Steigerwalt, a well-known San Diego defense attorney who bought a majority interest in the firm in 2008, said that he broke the news to his staff during a morning meeting at the University City-based firm and advised them to focus on current cases. He said the economic downturn and the company’s business model of “little or no money down” contributed to the firm’s money woes.

“Our model is predicated on people making payments,” Steigerwalt said in a telephone interview. “Fewer and fewer people have money to hire us, and those that do are not paying. It just became a managerial nightmare.”

Steigerwalt said the firm, which has offices in San Diego, Chula Vista and Escondido, isn’t going out of business. Despite some staff reductions, he said, the lawyers working there are well-equipped to represent existing clients to the fullest.

“At this point in time, I want to take no further cases,” he said. “I want to begin winding down this business.”

The 17 attorneys listed on the firm’s website represent hundreds of clients in criminal cases, bankruptcies, loan modifications and personal injury lawsuits. The firm has 107 employees after staff cuts in February,

The lawyers, including Steigerwalt, are featured in the law center’s frequently running television commercials in which they promote aggressive representation for “little or no money down” and affordable payment plans. Testimonials from clients also are used in the ads.

Steigerwalt said he called local television stations Wednesday and told them to stop running the ads.

Steigerwalt bought 51 percent of Pacific Law Center in March 2008. Former managing partner, Robert Arentz, had a 49 percent stake. Steigerwalt later became sole owner.

Before he bought a stake in Pacific Law Center, the firm had been dogged by complaints from clients and allegations of unethical activity by former lawyers. The problems continued to some degree after Steigerwalt came on board. Clients had filed lawsuits against the firm, as did a former attorney who claimed that the sale to Steigerwalt was a fraud.

Steigerwalt said he believes he successfully turned the firm around and that its old reputation was not a factor in the decision to stop taking new clients.

Kerry Armstrong, a defense lawyer who worked for Steigerwalt for 11 years but did not work at Pacific Law Center, said Wednesday’s announcement was inevitable.

“I knew it was coming; I just didn’t know when,” Armstrong said.

Armstrong said the firm was hamstrung by its business model and a poor reputation that changed little despite Steigerwalt’s efforts.

“I think Kerry really wanted to change it when he went in,” Armstrong said. “He just didn’t put the right people in place to do it for him.”

Monday, April 19, 2010

Foreclosure rates surge, biggest jump in 5 years. (San Diego Bankruptcy Attorneys & Lawyers)

By ALEX VEIGA, AP Real Estate Writer Alex Veiga, Ap Real Estate Writer – Thu Apr 15, 7:32 am ET:

LOS ANGELES – A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.

RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.

"We're right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.

Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.

These factors have helped slow the pace of foreclosures, but now that trend appears to be reversing.

"We're finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing," Sharga said. "We expect the pace to accelerate as the year goes on."

In all, more than 900,000 households, or one in every 138 homes, received a foreclosure-related notice, RealtyTrac said. The firm based in Irvine, Calif., tracks notices for defaults, scheduled home auctions and home repossessions.

Homeowners continue to fall behind on payments because they've lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth.

The Obama administration's $75 billion foreclosure prevention program has only been able to help a small fraction of troubled homeowners.

About 231,000 homeowners have completed loan modifications as part of the Obama administration's flagship foreclosure prevention program through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.

But another 158,000 homeowners who signed up have dropped out — either because they didn't make payments or failed to return the necessary documents. That's up from about 90,000 just a month earlier.

Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.

The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said.

Rising home prices and speculation fueled a wave of home construction there during the housing boom. But now the state, particularly around the Las Vegas metropolitan area, is saddled with a glut of unsold homes.

Still, the number of homes in Nevada that received a foreclosure filing dropped 16 percent from the first quarter last year.

All told, one in every 33 homes in Nevada was facing foreclosure, more than four times the national average, RealtyTrac said.

Foreclosure filings rose on an annual and quarterly basis in Arizona, however.

One in every 49 homes there received a foreclosure-related notice during the quarter.

Florida, meanwhile, posted the third-highest foreclosure rate with one out of every 57 properties receiving a foreclosure filing.

California accounted for the biggest slice overall of homes facing foreclosure — roughly 23 percent of the nation's total. One in every 62 properties received a foreclosure filing in the first quarter.

(San Diego Bankruptcy Law Firm has Bankruptcy Lawyers and Bankruptcy Attorneys available 24 hours a day to answer your questions at

Thursday, April 8, 2010

Bunkruptcies Increase in March 2010

NY Times Article:

Sharp Increase in March in Personal Bankruptcies
Published: April 1, 2010
Sign in to Recommend
Sign In to E-Mail

More Americans filed for bankruptcy protection in March than during any month since the federal personal bankruptcy law was tightened in October 2005, a new report says, a result of high unemployment and the housing crash.

Federal courts reported over 158,000 bankruptcy filings in March, or 6,900 a day, a rise of 35 percent from February, according to a report to be released on Friday by Automated Access to Court Electronic Records, a data collection company known as Aacer. Filings were up 19 percent over March 2009. The previous record over the last five years was 133,000 in October.

“Even with the restrictive new law, we’re back up over where we were before the law changed,” Mike Bickford, president of Aacer, said in a phone interview Thursday from his headquarters in Oklahoma City. He faulted the stagnant economy, saying a surge in bankruptcies generally follows economic contraction by 6 to 18 months, and he pointed to March as a historically busy month for bankruptcy filings.

Other experts point out that filings invoking Chapter 7 of the bankruptcy code, a simple and inexpensive option, are rising faster than more complex Chapter 13 reorganization filings, under which consumers repay a portion of their debts so they can keep their homes, suggesting that more homeowners are simply walking away from underwater mortgages.

“Fewer people are trying to save their homes,” Katherine M. Porter, a University of Iowa law professor and bankruptcy expert, said in an interview by phone on Thursday. “They realize their payments are not affordable, and bankruptcy judges do not have the power to adjust the mortgages to make them more affordable.”

Statistics from the United States Trustee Program, the Justice Department office that oversees bankruptcy cases, show that Chapter 7 filings as a percentage of all bankruptcies have increased to about 73 percent in 2009 from about 62 percent in 2006-07. Of the 158,141 bankruptcy filings in March, 118,505, or 75 percent, were Chapter 7s and 38,241 were Chapter 13s, the Aacer report says.

“We think that means fewer and fewer families think they’re really going to save their homes,” Professor Porter said. “They don’t have any equity, so why try to keep up with their home payments?”

The nation’s high unemployment rate is one more reason for people to choose Chapter 7, Professor Porter said. “To file Chapter 13, you need ongoing income, and to the extent we have more people who are unemployed, they can’t use Chapter 13 because they don’t have that income to pay into the plan,” she said.

Finally, Professor Porter said, March is the high season for bankruptcy filings because many people in financial distress get a tax refund check that they can use to pay the $1,500 to $3,500 that a bankruptcy lawyer charges.

“People use their tax refunds to pay their attorney fees,” she said.

San Diego Bankruptcy Law Firm and its San Diego Bankruptcy Lawyers can help you stop foreclosure, save your home, eliminate your credit cards and protect your assets. Visit us at

Wednesday, March 24, 2010

Notices of Default up 24% in San Diego. Bankruptcy Lawyers

Notices of default up 24% in county
Analyst says February numbers might be fluke

Friday, March 19, 2010 at 9:11 p.m.

Homeowners in San Diego County defaulted at their highest monthly rate in more than a year in February, MDA DataQuick reported Friday.

Defaults totaled 2,166, up 24.4 percent from January’s 1,741, the biggest one-month jump since the figure jumped 121.3 percent from November to December 2008.

Meanwhile, there were 973 foreclosures, down from 986 in January in the sixth month-to-month decline in the past year. The number was down 21 percent from year-ago levels.

More notices of default normally signal spreading distress in the housing market. As owners fall three months or more behind in their monthly payments, lenders usually file this first formal action that often leads to foreclosure. The number spiked a year ago, when lenders were catching up on a backlog of defaults delayed through extended noticing requirements and moratoriums.

DataQuick analyst Andrew LePage said the default rise last month might be a fluke.

“You can’t just read too much into a single month,” he said. “There’s been a very irregular (pattern) of notice-of-default filings.”

But LePage said he detected a similar uptick in counties throughout the state.

“The bulk was in the areas hit hardest” by economic and housing distress, he said, and did not reflect problems spreading to higher-priced properties as many analysts have been predicting.

“That’s not the way it shaped up,” LePage said. “It was more of the same.”

In his ZIP code breakdown of defaults in the county, LePage reported high percentage increases from January in several higher-priced neighborhoods. The actual numbers remained relatively low.

For example, Del Mar defaults were up 250 percent, but the increase was only from two to seven defaults; Solana Beach was up 120 percent, from five to 11; La Jolla was up 54.5 percent, from 11 to 17.

Meanwhile, some lower-cost areas continued to exhibit greater distress in absolute numbers. Nestor in the South Bay had 83 default notices, up from 53 in January and the highest of any ZIP code, followed by Spring Valley with 70, up from 44, and Encanto at 58, up from 53. All three had median home prices of $240,000 or less in the past 12 months.

LePage said it is possible that defaults will continue rising, given the high number of delinquencies that have been reported in recent months.

But Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said a new program to speed up short sales — homes sold for less than the outstanding mortgage balance — may forestall many defaults as well as foreclosures.

“No one’s walking around with rose-colored glasses thinking it’s the silver bullet,” Hobbs said. “Certainly, it’ll be useful tool.”

He said the market is still unsettled because of the so-called “shadow inventory” of distressed homes that are delinquent or in default.

“It would be catastrophic if all of a sudden they all went to foreclosure,” Hobbs said. “We would have a huge, downward impact on home values, and no one wants that.”

In another report Friday, HomeGain, a Web site based in Emeryville that lists estimated home valuations, said real estate agents nationally are somewhat more optimistic about the market than a year ago.

Twenty-nine percent of industry professionals responding to a survey said prices are likely to decrease in the next six months, compared with 53 percent expecting a decline a year ago.

California was one of 10 states where more agents think prices will go up than down in the next six months.

The breakdown: 42 percent think prices will be unchanged, 36 percent think they will rise and 22 percent think they will fall.

Roger Showley: (619) 293-1286;

Thursday, March 4, 2010

Union Trib: Hefty tax bill hits those who lost home...short sale or foreclosure

Hefty tax bill may hit those who lost home

Wednesday, March 3, 2010 at 12:03 a.m.


Charlie Neuman / UNION-TRIBUNE

Phyllis and Jack Roth of Fletcher Hills are facing a California tax bill of up to $20,000 because, they have found, the state treats short-sales differently than the IRS.
San Diegans who have lost their homes through foreclosure or short-sales thought they had emerged from the dark times and could start rebuilding their lives.

Then the state tax man came calling.

With less than six weeks before taxes are due, an estimated 16,000 former homeowners statewide will owe $15 million in extra income taxes this year and $29 million through 2012.

The tax applies to what is called the “cancellation of debt” that occurs when property owners lose their homes through foreclosure or arrange a short-sale in which they sell for less than the mortgage balance. The lender sends them a form itemizing the forgiven debt, and the amount is subject to income tax.

Congress exempted most homeowners from the extra federal tax through 2012, and the state followed suit for 2007 and 2008 but did not extend the provision last year. The state Assembly may vote tomorrow on a bill to repeal the tax, but Gov. Arnold Schwarzenegger vetoed such a bill last year over unrelated provisions.

“They’re probably stuck,” San Diego tax attorney Bob Kevane said of former homeowners facing the tax. “The biggest way around it is if you’re insolvent.”

Brad Nemeth, another tax attorney, said he doubts the tax will be eliminated.

“The state of California is seriously upside down financially, and I think the governor will probably veto it again,” Nemeth said.

H.D. Palmer, a spokesman for the Department of Finance, said Schwarzenegger remains opposed to the bill in its present form but has not announced whether he will veto it again. Other versions of the tax repeal are in the hopper and could be passed next month, legislators’ analysts said.

Failure to halt the tax could cost Jack and Phyllis Roth of Fletcher Hills as much as $20,000 in state income taxes this year — they paid $781 last year — because of the home they sold short in Flinn Springs in November. They bought it in 2004 for $545,000, invested $50,000 in improvements, and then saw its value fall by one-third before they sold it for $410,000. The result was about $190,000 in net loss that was forgiven by the Roths’ lender.

Phyllis Roth, 63, a tax preparer, said she did not realize until recently that the state would treat the short-sale differently than the Internal Revenue Service would. She estimates her state taxes at $15,000 to $20,000.

“I didn’t call anybody,” she said. “I was looking online and didn’t see anything. That’s what happens when you rely on yourself.”

The state Franchise Tax Board has received an increasing number of calls from former homeowners who are discovering the giant tax bills they face, said spokeswoman Denise Azimi. Azimi said the former homeowners can work out a payment schedule, though the state charges 4 percent interest on such stretched-out payments.

If the tax is repealed eventually, the taxpayers could seek a refund, but for now, they have to pay what is due by April 15 or face a penalty.

Not all foreclosures and short-sales are subject to the tax, experts said.

In California, most home buyers get mortgages involving a “nonrecourse” loan — meaning that if the property is foreclosed, the lender has no recourse for recovering lost money except by selling the property itself. Lenders cannot go after the owners’ assets to make up the difference, and no tax is due. These rules apply to principal residences only.

However, when owners refinance or take out a second mortgage or home equity line of credit — as happened often during the housing boom — those loans are written as recourse loans and lenders can seek repayment from the owners’ other resources. Sometimes lenders agree to waive the lost amount, but under current state law, that amount is taxable for homes sold since Jan. 1, 2009.

“It’s one of those little land mines waiting to jump up on people,” Nemeth said.

Taxes also are not due if owners declare insolvency or bankruptcy, the lawyers said. For young homeowners whose main asset was their home, it’s likely they could fall under this provision. For others, the valuation of assets becomes a factor in determining solvency.

“Sometimes if they have other real estate, we try and value the stuff realistically, so that they have as little impact as possible,” Kevane said.

For the Roths, who continue to own a previous home and have other assets, their nearly $200,000 in losses does not cancel out their other holdings. The couple said they normally operate conservatively and only bought the home, which they lived in while their son continued to live in their first house, so they could sell it at a profit and pad their retirement accounts.

“If we have to pay it, we’ll pay it,” Phyllis Roth said of the taxes. “It’s less money to retire on, but it’s not the end of the world.”

Back in Sacramento, the proposal to waive the cancellation of debt tax has passed the Senate and awaits an Assembly vote. Its fate is wrapped up in a larger bill, SB8X-32, by Sen. Lois Wolk, D-Davis, which would bring other state tax provisions into compliance with federal law.

One of those, which prompted Schwarzenegger’s veto last year, relates to “erroneous reporting” of tax liability, by which some large taxpayers seek to avoid penalties for under-reporting of income by overestimating taxes due. Federal law charges a penalty for overestimating without a reasonable explanation, and the state bill would adopt similar penalties.

Wolk, who chairs the Senate Revenue and Taxation Committee, said it was appropriate to group all tax conformance measures into one bill. But if her bill is vetoed again, she indicated she would act to get the cancellation of debt tax repealed.

“We’re certainly not going to allow homeowners to have to pay significantly more tax when they’ve had to relinquish their homes through short-sales (and foreclosures),” Wolk said.

Roger Showley: (619) 293-1286;

Wednesday, February 24, 2010

24% of residential homes upside down according to Reuters and CoreLogic

CoreLogic: 24% of residential properties upside down
Feb 23, 2010 17:58 EST
homeownership rate | negative equity
You don’t keep paying for something that you own.

From FirstAmerican Core Logic:

…more than 11.3 million, or 24 percent, of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.

Negative equity means the mortgage balance is higher than the value of the home.

The bulk of underwater properties are concentrated in five states: California, Florida, Nevada, Arizona and Michigan. Nevada leads the way in terms of most homes with negative equity at a whopping 70 percent.

“Home-ownership” is badly defined by, for instance, the Census Bureau, which considers all “owner-occupied housing units” in its calculation of the home-ownership rate.

But the rate would be far lower if one simply calculated the amount of equity that Americans have in their homes. Since this is the portion of real estate for which they don’t pay anything, it is the only portion that is truly “owned.”

Subtract folks who owe more on their homes than they are worth and the home-ownership rate drops from 67% to 43%.

This isn’t merely academic. Having equity in their homes is a big reason homeowners keep paying their mortgage, which is necessary for banks to stay solvent.


Monday, January 4, 2010

US Bankruptcies increased 32% in 2009. (San Diego Bankruptcy Law Firm:

Bankruptcies increased 32 percent in 2009
Last year was 7th-worst on record with over 1.4 million petitions submitted


RALEIGH, North Carolina - Consumers and businesses filed for bankruptcy at a pace that made 2009 the seventh-worst year on record, with more than 1.4 million petitions submitted, an Associated Press tally showed Monday.

The AP gathered data from the nation's 90 bankruptcy districts and found 1.43 million filings, an increase of 32 percent from 2008. There were 116,000 recorded bankruptcies in December, up 22 percent from the same month a year before.

While experts believe some of the increase is due to a natural recovery as consumers and attorneys become accustomed to a recent overhaul of bankruptcy laws, the numbers indicate clear correlations to recession-weary regions. Arizona saw the fastest increase, a jump of 77 percent from the year before, followed by Wyoming (60 percent), Nevada (59 percent) and California (58 percent).

Emile Harmon, who owns a law firm in Tempe, Arizona, said the firm has doubled its staff to handle the surge in bankruptcy filings. The lawyers have been steadily shifting away from their other areas of business, civil lawsuits and divorce cases.

"Bankruptcy is kind of swallowing the whole practice." Harmon said. "There's little time to do other stuff."

There's also no sign that things are slowing down. Harmon said bankruptcies have been coming in waves, first with those 18 months ago who had adjustable-rate mortgages, then with those who lost their jobs due to the housing downturn. Now he's finding wealthy individuals and business owners who have finally succumbed to lower incomes and shrinking home values.

"A lot of the people we see were in a really good financial position two years ago," Harmon said. "People really look at you and say, 'I can't believe I'm here.'"

For three years, filings have been steadily rising back toward levels reached early in the decade before Congress overhauled the nation's bankruptcy laws. The 2005 alterations made bankruptcy filings more cumbersome, a move that followed fears from lenders that some consumers were abusing the system to wipe away debts.

Bankruptcies surged to slightly more than 2 million in 2005 as consumers rushed to file before the new law took effect but then plummeted to 600,000 in 2006. They've been climbing ever since and in 2009 became the seventh-highest year on record, behind only the years 1998 and 2001-2005.