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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 27, 2011

Why Bankruptcy is NOT a Dirty Word

By: Michael Goldstein
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Unfortunately, in recent years many debt consultation companies, loan modification companies and real estate and mortgage brokers have attempted to mislead the public into thinking that bankruptcy is a dirty word and can end your credit life. These companies are trying to create the propaganda that “bankruptcy” is a word best whispered to yourself in the center of a Middle East war zone. The truth of the matter is that bankruptcy is actually the best course of action when you are struggling with debt and bills you can not handle without some form of assistance.

I am not going to sugar coat bankruptcy because if you are in debt no matter if it is credit card or mortgage issues; it is not a great place to be in. However, bankruptcy law is the Federal sponsored and regulated course of action to help consumers get out of their debt and start their lives again. Unlike bankruptcy, debt consultation companies, loan modification companies and real estate and mortgage brokers are not sponsored or regulated by the Federal Government.

Bankruptcy law is as old as our country. In fact, the concept of bankruptcy was so important to our Founding Fathers that they gave Congress the power to create bankruptcy courts and rules in Article III of the United States Constitution. The drafters did not wait until Article Ten or Twenty but added it as early as Article three in the U.S. Constitution.

If bankruptcy was such a terrible thing to do, the Federal Government would certainly have removed it from the laws and not sponsored it. Congress would certainly not have amended the rules in 1978, or again in 2005 to add more complexities to the Bankruptcy code or Title XI. So, the little dirty word is not
bankruptcy, rather all of the other marketing schemes to get you to spend more money are the dirty parts of the consumer debt business. As a consumer debt attorney, and a founder of a debt relief agency, I would suggest you go right to source to fix your debt with a bankruptcy counsel rather than waste both time and money with companies that are not sponsored by the Federal Government, or that must follow specific rules and regulations to ensure consumers and creditors are treated fairly and equitably.

If you are thinking about entering into a Debt Settlement program you need to be very careful. Based upon what I have seen as a consumer debt advocate over the past ten years, I am personally aware of only a few companies out of the many that advertise debt settlement on the internet that I would trust to try to resolve a debt for my friends and family.

The key to remember in all of this is that if you feel that your debts have spun out of control and you can not catch up with your credit card payments, or mortgage payments, or some other form of debt, your best bet is to set up an appointment and speak with a bankruptcy lawyer today and find out what options are available to you.

Occupy San Diego


Banks had their bailout. Isn't it time for yours? If you can't get a principal balance reduction or a loan modification, bankruptcy might give you the relief you have been searching for. If you are having trouble with house payments, credit card bills, medical bills, repossessions, or foreclosure, let us help you.

Attorneys Maureen Enmark, Scott Schlegel and Todd Williams will work hard to make sure you understand your options and rights under the law. We want to start helping you today. We have an A+ rating with the Better Business Bureau and take a look on our website for testimonials from satisfied and relieved clients.

Your first appointment is free and completely confidential even if you decide bankruptcy is not the right choice for you. We offer Saturday and evening appointments and free parking at our easy-access Mission Valley location.

Friday, October 21, 2011

Don't use your retirement account to pay off creditors

"Keep Your Nest Egg" by Douglas Jacobs

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Don’t take money out of your retirement account to ease a temporary economic crunch.

Difficult times come and go; and sometimes they seem insurmountable. When that happens, it might appear wise to tap into the 401k or the IRA and borrow or take some of the funds. Don’t do it!

I see bankruptcy clients every day who have used their 401k or their IRA to cover bills. They come to see me after they have reduced or spent all of their retirement! It’s too bad they didn’t see a bankruptcy attorney or competent financial adviser before that money was gone.

Almost all retirement accounts are considered exempt property. That means that even after filing a bankruptcy, you’ll still have it. But your debts, or most of them, will be gone.

Your retirement account is probably the only hope you have for the future. None of us will work forever, and if you deplete the account today, you may well find yourself unable to retire; or not able to afford anything more than a meager existence at that time. And don’t expect the Social Security system to bail you out. At the top rate, the monthly pay-out is barely enough to afford reasonable housing and food, much less travel money to see the grandkids or go fishing.

You should also remember that any money you withdraw from a retirement account gets taxed now. And there’s a 10% penalty for early withdrawals from an IRA. Those taxes won’t go away in the bankruptcy. Not only will you lose an exempt asset you could have kept, but you will incur a new debt too.

So, don’t deplete your retirement. Leave it for when you really need it. See a competent bankruptcy attorney in your state before you make the decision.

Thursday, October 20, 2011

Number of Californians entering foreclosure jumps in third quarter

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A big August surge in foreclosure actions by Bank of America and Bank of New York sent the number of California homeowners entering foreclosure to levels not seen in a year.

The third-quarter jump in notices of default, the first formal step in the foreclosure process, came after such filings had dropped to a three-year low earlier this year. Defaults were up 25.9% from the prior quarter, according to according to San Diego-based DataQuick, a real estate information service.

Banks have fired up the foreclosure-processing machinery in recent months after a long lull as they tried to negotiate settlements with regulators over faulty foreclosure practices. That slowdown created a backlog after a slew of investigations were launched following last year’s so-called robo-signing scandal, where banks used improper practices and documents to foreclose on troubled homeowners.

“Obviously, some lenders and loan servicers have begun to plow through their backlogs of delinquent loans more aggressively,” DataQuick president John Walsh said in a statement.

California properties received an estimated 71,275 notices of default during the three months ended Sept. 30, with some properties receiving multiple notices due to more than one loan. The majority of those loans were from the peak bubble years of 2005, 2006 and 2007, when lending practices were at their loosest, DataQuick said.

Separate third-quarter data released earlier this month by the Irvine-based firm RealtyTrac showed the number of homes entering foreclosure surged in states where repossessions take place largely outside of the courtroom. These nonjudicial states include California, Nevada, Arizona, Oregon and Washington.

Experts said that these Western states would experience any foreclosure surge first, as it is easier to get the process rolling again in these places.

While more California homes entered the foreclosure process in the third quarter, the number of homes taken back by banks continued to decline, according to DataQuick. The number of filed trustees deeds -- which are the papers that record the repossession of a home -- declined 8.4% from the prior quarter and dropped 14.3% from the third quarter of 2010. A total of 38,895 trustees deeds were filed in the third quarter.

Experts said that banks are probably waiting for some kind of settlement to be hammered out before really picking up the pace on foreclosures again. The increase in new California proceedings comes as talks over a broad foreclosure settlement by state attorneys general with the nation's five-largest mortgage servicers have experienced setbacks -- dragging on far longer than expected.

California recently stepped out of those discussions, declaring it would pursue its own path.

Monday, October 3, 2011

You Just Got Sued–What Should You Do?

by Dana Wilkinson, Attorney at Law

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So far this morning, I’ve gotten two calls from clients who received suit papers over the weekend. Credit card companies (or the debt buyers who bought the accounts) have filed civil suits in state court, seeking a judgment for the amount owed. One of the suits was accompanied by a letter from the law firm that filed the suit, insisting that the client contact them immediately. Getting sued is a scary thing. So, should you hit the panic button? What does it mean, and what can you do?

A civil suit is nothing more than a request that a court decide that you owe the plaintiff money. That’s it. You are being put on notice, and you have the right to respond and dispute that you owe the money, or that the amount is incorrect, or that you don’t owe that particular claimant. It is not an arrest warrant (there are no debtors’ prisons in this country–remember 9th grade civics class?).

If you don’t file a response to the suit (called, appropriately enough, an Answer) the court will usually find in favor of the plaintiff, granting them a civil judgment in the amount they requested. If you don’t respond, you don’t usually have to attend court. Once the court grants the plaintiff a civil judgment, however, you may effectively lose the right to challenge that the amount is correct, or that you actually owe the money. As far as I know, the effect of a civil judgment in all fifty states is to become a lien on real property that you own in that jurisdiction. But that’s pretty much it. If you don’t dispute that you owe the debt, a judgment is pretty much a piece of paper that says you owe what you already knew you owed.

What comes after a judgment is granted depends on where you live and what you own. If you want to know how a civil judgment will affect you and your property, you have to consult a lawyer in your state. There is no other way to be sure, so I’m not even going to generalize here. Go see someone who can tell you about your situation. Don’t rely on your internet research skills or your brother-in-law (unless your brother-in-law is a lawyer) because every state is different, and your situation is not exactly like anyone else.

In fact, my advice to my two clients this morning was different. One is what lawyers call “judgment-proof.” That means what it sounds like–a judgment doesn’t change anything, because there is nothing the judgment creditor can do, no property for the judgment creditor to take, that will change anything for my client. The second client, who owns real property, may need to respond differently.

Bankruptcy may also be a solution. A bankruptcy can stop a suit that has been filed, and prevent a judgment from being granted. Bankruptcy can also sometimes alleviate the affect of a judgment that has already been issued. Whether is is necessary or advisable, again, depends on your situation. Only an experienced bankruptcy lawyer can tell for sure.

Oh, remember that letter I mentioned, insisting that my client contact the creditor’s lawyer immediately? The language of the letter suggested that dire consequences could result if she did not contact them. Leaving aside whether the letter is itself actionable, if you get such a letter (or phone call), remember that they are trying to get you to pay them money. Their stock in trade is to create a sense of urgency, and stampede you into making a commitment that you wouldn’t otherwise make. Again, your best defense is to consult with someone who is on your side, who can tell what you really need to worry about, and what is, as my Daddy used to say, “all bark and no bite.”

And, as a final note, don’t delay. It may be tempting to just stick your head in the sand and wait to see what happens, but remember what part of your anatomy that strategy leaves exposed. (If you need a reminder, see photo above.) Check it out, and make sure you know what can happen, and what you can do about it. You may be pleasantly surprised by the advice you receive.

Facing Foreclosure? How Bankruptcy Can Help

Link to article:

Many Americans fall behind on their mortgage payments. Some lenders and mortgage companies may be willing to work out deals with the homeowners, such as a short sale or loan modification. Most lenders are not. In that case, the lender will most likely begin the foreclosure process, as set out in the mortgage contract. The foreclosure process involves the creditor repossessing and usually selling the house at a public auction. The proceeds from that auction are used to repay the mortgage and any legal costs.

The foreclosure process takes time. Most creditors do not begin foreclosing until the homeowner is two to three months behind on their mortgage payments. This gives the homeowner some time to consider alternatives to foreclosure, such as a loan forbearance, short sale, or deed in lieu of foreclosure. Should all of these alternatives fail, bankruptcy may help in several different ways.
How to Delay Foreclosure with an Automatic Stay:

Bankruptcy and foreclosure are both words that the average person dreads hearing. If you are facing foreclosure, however, bankruptcy can become a tool to help you keep your house.

Once you file bankruptcy, either Chapter 13 or Chapter 7, the court automatically issues an Order for Relief. This order grants you an "automatic stay", that directs your creditors to immediately cease their collection attempts, no matter what. So, if a foreclosure sale has been scheduled for your home, it will be postponed, by law, until the bankruptcy is finalized. This usually takes about three to four months.

There are two exceptions to this buying time rule:

If the Lender Files a Motion to Lift the Stay: Unfortunately, the lender can file a motion to lift the stay, which asks permission from the bankruptcy court to continue with the foreclosure sale. If this is granted, you may not receive the extra three to four months of time. However, bankruptcy normally still postpones the sale by about two months or more, or even longer if the lender does not act fast in filing the motion to lift the stay.

If the Foreclosure Notice has Already Been Filed: Most states have laws that require lenders to give homeowners a certain amount of notice before selling their property. A bankruptcy's automatic stay will NOT stop the clock on this advance notice. For instance, California law requires a lender to give the homeowner at least three months notice before selling the home. If a California resident receives this three month notice, and then files for bankruptcy two months later, the three month period would have passed after being in bankruptcy for only one month. As a result, the lender could file a motion to lift the stay and ask the court's permission to schedule the foreclosure.
How to Use Chapter 13 Bankruptcy to Help You:

What Chapter 13 Means for Bankruptcy and Foreclosure: Chapter 13 bankruptcy allows you to set up a repayment plan to pay off the past due payments, or "arrearage". You can propose the length of time for repayment, but keep in mind that you'll need sufficient income to pay BOTH your past due payments AND your current mortgage payments at the same time. So long as you make all of the required payments for the length of the repayment plan, you will avoid foreclosure and be able to stay in your home.

2nd and 3rd Mortgage Payments: Chapter 13 can also help eliminate payments on second or third mortgages. Typically, Chapter 13 entitles bankruptcy courts to recategorize second and third mortgages as unsecured debt. Under Chapter 13, unsecured debt takes last priority and usually does not have to be paid back. This recategorizing process is possible if your first mortgage is secured by the entire value of your home since this means that there is no remaining equity in your home to secure the second and third mortgages.
How to Use Chapter 7 Bankruptcy to Help You:

Chapter 7 bankruptcy also cancels all the debt secured by the home, including mortgages and home equity loans. Furthermore, Chapter 7 goes a step further. Thanks to a new law, Chapter 7 also forgives the homeowner for tax liability for losses the mortgage or home-improvement lender incurs as a result of the homeowner's default. This tax law applies to the 2007, 2008, and 2009 tax years. However, the new tax law does NOT cancel the homeowner's tax liability for the lender's losses at foreclosure if:

* The loan is not a mortgage or was not used for home improvements (like a loan used to pay for a vacation or automobile). The mortgage or home equity loan is secured by property other than your principal residence (like a vacation home or rental property).

Cautionary Notes about Chapter 7:

You Could Still Lose Your Home : All of this debt and tax liability forgiveness is great, but note that Chapter 7 will not keep you from losing your home. Chapter 7 forgives your debt, and that is all it does. When you enter into a mortgage, you are agreeing to use your home as a type of collateral in case you default on your payments. Chapter 13 enables you to pause action on that lien, while you catch up on your payments; hence, you may save your home. Chapter 7 forgives your debt, but it will not lift the lien, and hence will not lift the foreclosure on your home. Therefore, you will probably still lose your home.

You Could Lose Other Valuables: Because the courts typically want to make the creditors whole again from their loss, the bankruptcy trustee may award money from the sale of certain other valuables of yours to the creditors. For example, if you have a valuable wedding ring that's value exceeds the dollar amount you are allowed to keep during bankruptcy, under the "jewelry exemption", you could lose your wedding ring.

You May Not Be Eligible: The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 provides that anyone whose average gross income for the six-month period before the bankruptcy filing exceeds the state median income for the same sized household is ineligible for Chapter 7 bankruptcy. Additionally, if your income is sufficient enough for you to pay your living expenses AND fund a reasonable Chapter 13 repayment plan, you are also ineligible for Chapter 7.
How Bankruptcy Will Affect Your Credit:

Although bankruptcy and foreclosure are both extremely damaging to your credit, sometimes filing bankruptcy can be a wise choice when trying to rebuild credit. A foreclosure not only damages your credit score for years, but you are still left with the mortgage debt. Most mortgage creditors will not consider you for future mortgages if you have a foreclosure on your credit history. In contrast, bankruptcy lets you start fresh. It still is damages to your credit, but because you are debt free, you immediately begin rebuilding good credit sooner.

Although bankruptcy has a few negative consequences, and may not save you from losing your home, it can be the best option in starting fresh with no debt, getting back on your feet, and saving money.

Worst Case Scenario: Losing the House, but Also the Debt

Sometimes bankruptcy can't prevent the loss of your home, so you may start to think that a bankruptcy filing is pointless. There are other benefits to filing for bankruptcy besides the interplay between bankruptcy and foreclosure, however.

Even if you can't keep your home, bankruptcy can help to shovel out from under mortgage debts and tax liability. This is an important first step towards getting back on your feet. Bankruptcy can also help you to put away money for the tough times ahead.