Debt Modification and Forgiveness

Bankruptcy is seen as a method for individuals and business to eliminate and restructure existing debt.  So, with that, most people that come into our office look for ways to do this.  However, some debt simply cannot be eliminated easily.  Some is not considered “dischargeable” in bankruptcy.  Other debt is considered secured.  That secured debt can be eliminated.  However, to do so, the person considering bankruptcy, in many cases, would have to give up their property (usually homes and cars) if he or she wants to eliminate any further payments.

The current economic downturn has created a desire for many people to eliminate debt and restructure it through governmental means, and not simply through a bankruptcy process.  A recent article details the ideas and proposals that many have been creating and promoting.  The article states as follows:

As of June 30, roughly 1.6 million homeowners in the U.S. were either delinquent on mortgages or in some stage of the foreclosure process, according to CoreLogic. And the real estate data and analytics company reports that 10.9 million, or 22.5 percent, of U.S. homeowners are underwater on their mortgage -- meaning the value of their homes has fallen so much it is now below the value of their original loan. CoreLogic said the figure, which peaked at 11.3 million in the fourth quarter of 2009, has declined slightly not because home prices are appreciating but because a growing number of mortgages are entering foreclosure.

The nation's banks, meanwhile, still have more than $700 billion in home equity loans and other so-called second lien debt outstanding on those U.S. homes, according to SNL Financial.

Debts owed by American consumers account for almost half of the nearly $9 trillion in worldwide bonds backed by pools of mortgages, car loans, credit card debt and student loans, which were sold to hedge funds, insurers and pension funds and endowments.

And that doesn't include the $4.1 trillion in mortgage debt sold by government-sponsored finance firms Fannie Mae and Freddie Mac.

Many have suggested that the government write off the debt.  Other proposals include allowing for bankruptcy to modify home loans for individuals’ primary residences in the same way that the Bankruptcy Code allows for such modification on vehicles and other property.  Currently, an individual does not have the ability to modify a loan on a primary residence.  However, if a property has a second (or third) loan that is completely unsecured (value of the house is less than the value of the first loan), the unsecured loan can be eliminated. 

Contact the San Jose Bankruptcy Attorney at Henshaw Law Office today at (408) 533-1075 to see whether bankruptcy would be a good option for your debt.

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Hiding Assets

Every once in a while I get people in my office that think they are able to outsmart the IRS, the Franchise Tax Board, the Bankruptcy Courts and their trustees, and general creditors.  The problem is that some of these entities, especially those funded with government money, have seemingly unlimited resources and ability to go after those that seek to hide assets and income.

A recent Yahoo! article described one man's 20-year fight to hide such assets.  The man is a former retail technology company owner that had approximately $100 million available to pay off creditors.  An interesting quote from the article is that:

"'I hope he will do the right thing and pay his debts,' said [an attorney for the law firm seeking to collect]. 'But most people do not let go of $100 million easily.'"

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The taxing agencies want to get their money.  If you have it available to you, they will try to find it.  If the taxes owed are income taxes, there are ways around such agencies' reach.  In many cases, we can file a Chapter 7 bankruptcy to eliminate taxes older than three (3) years.  We simply look at the date the taxes were due and count back three years.  There are other rules that may also apply in your case.

One key to watch out for is if the IRS files a tax lien on you.  Such liens are not easily dischargeable.  They attach to all property you own.  To discharge the debt, you will have to treat such a tax as a secured debt in your bankruptcy schedules.

The key here is to speak with the San Jose Bankruptcy Lawyer at the Henshaw Law Office today at (408) 533-1075.

California Residents and Debt

An article describes how much debt, on average, individuals face in the United States.  Not surprising to many, California leads the way with a whopping $336,169 average debt load.  This figure does not include debts owed on educational loans (which are generally not dischargeable in bankruptcy).  The one plus for Californians is that we are paying either paying off our debt, or eliminating it in some other manner.  The article fails to state the manner of eliminating debt.

Many people come into my offices or call me on the phone wanting to discuss bankruptcy for a number of different reasons.  Some people have emergencies such as a bank levy, a foreclosure, or a wage garnishment.  Other people want to use my service because life has simply become unmanageable.  The phone calls become incessant and the stressful nights simply have to end.

Bankruptcy can help with many of these problems. For example, if you have one of the emergency situations, the filing of bankruptcy petition will prevent a creditor from removing money from your account, even if they obtain authority to do so.  Similarly, we can stop a foreclosure up to the last minute before the sale (but not after the sale).  Lastly, we can stop a wage garnishment so that you can keep your hard earned money.

Call the San Jose Bankruptcy Attorney at the Henshaw Law Office at (408) 533-1075.

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