The United States Bankruptcy Court for the Northern District has come out with statistics for bankruptcy filings in the area. The Northern District covers from Del Norte County in the north to Monterey County in the south. Overall, filings in the District have decreased approximately 9% from November 2010 to November 2011. Additionally, Chapter 7 filings have decreased approximately 11%, while Chapter 13 filings have decreased approximately 2%. Maybe the economy around here is starting to turn around.
For further information on Chapter 7 or Chapter 13 bankruptcy, contact the Henshaw Law Office at (408) 533-1075.
Saturday, January 14, 2012
Monday, December 19, 2011
Saturday, November 5, 2011
Means Test In Small Detail
The vast majority of people that come into the office for a bankruptcy consultation are struggling with making their basic necessity payments. The typical person usually has not paid a credit card for months or even years, and their income is about equal to their basic necessities. However, some people come in with different financial situations.
In 2005, Congress implemented additional rules that limit individuals and couples that make higher income (as determined under the Bankruptcy Code) from qualifying for the benefits of Chapter 7. The reason for this is that the thought is that if you have an ability to pay off a portion of your debts, you should do that, and that is what your creditors deserve (according to Congress).
The Chapter 7 Means Test determines the "disposable income" for debtors. This test is quite complex, and the trustees reviewing cases under Chapter 7 review each case to make sure that debtors, in fact, qualify for the relief they are requesting.
The starting point for the Means Test is the debtor's gross income. This is the total amount of income before taxes, and any deductions, even if that income is not subject to taxes (for example 401(k) deductions). If a married person is filing by himself/herself, the non-filing spouse's income must also be included (although certain deductions are available).
The next step is to see whether that income is above the median income for the debtor's state. For example, in California, the median income for a single person is currently $47,683. For two (2) people, that income goes to $61,539. If your income falls above the median income based on your household size, you have to go through further tests. The keys on these tests is to determine whether a debtor has an ability to pay back a portion of debt.
If the income is higher that the median, a potential Chapter 7 debtor must go through a deduction process to show the court, the trustee, and the debtor's creditors that the debtor does not have any sufficient disposable income. Some of these deductions include national deductions for (a) living expenses (food, clothing, household supplies, personal care, and miscellaneous), and (b) health care expenses (outside of health care insurance). Other deducutions include income taxes (not real property taxes), term life insurance, child care (baby-sitting, day care, nursery and preschool), and regular charitable contributions.
To determine whether you qualify for Chapter 7 bankruptcy, contact the Henshaw Law Office today at (408) 533-1075.
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In 2005, Congress implemented additional rules that limit individuals and couples that make higher income (as determined under the Bankruptcy Code) from qualifying for the benefits of Chapter 7. The reason for this is that the thought is that if you have an ability to pay off a portion of your debts, you should do that, and that is what your creditors deserve (according to Congress).
The Chapter 7 Means Test determines the "disposable income" for debtors. This test is quite complex, and the trustees reviewing cases under Chapter 7 review each case to make sure that debtors, in fact, qualify for the relief they are requesting.
The starting point for the Means Test is the debtor's gross income. This is the total amount of income before taxes, and any deductions, even if that income is not subject to taxes (for example 401(k) deductions). If a married person is filing by himself/herself, the non-filing spouse's income must also be included (although certain deductions are available).
The next step is to see whether that income is above the median income for the debtor's state. For example, in California, the median income for a single person is currently $47,683. For two (2) people, that income goes to $61,539. If your income falls above the median income based on your household size, you have to go through further tests. The keys on these tests is to determine whether a debtor has an ability to pay back a portion of debt.
If the income is higher that the median, a potential Chapter 7 debtor must go through a deduction process to show the court, the trustee, and the debtor's creditors that the debtor does not have any sufficient disposable income. Some of these deductions include national deductions for (a) living expenses (food, clothing, household supplies, personal care, and miscellaneous), and (b) health care expenses (outside of health care insurance). Other deducutions include income taxes (not real property taxes), term life insurance, child care (baby-sitting, day care, nursery and preschool), and regular charitable contributions.
To determine whether you qualify for Chapter 7 bankruptcy, contact the Henshaw Law Office today at (408) 533-1075.
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Thursday, October 6, 2011
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.
Monday, October 3, 2011
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.
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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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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Wednesday, July 6, 2011
Homeowner Dues When Home is Foreclosed
A recent article describes a big problem homeowners with homeowners association dues following bankruptcy. The big problem is found when such homeowners surrender their homes, but still remain owners of the property because the bank will not take the property back. A partial excerpt of the text is found below:
A federal bankruptcy judge in Nashville has ordered the sale of a flood victim's home after the lender refused to foreclose, in what legal observers say is a first-of-its-kind ruling.
Sheryl Pigg lost nearly everything in the 2010 flood, according to The Tennessean. She ultimately found a new home, declared bankruptcy and discharged her debts.
But a 2005 change to federal bankruptcy code made Pigg liable for continuing homeowners association fees at her abandoned home, because she was still the legal owner. Pigg sued mortgage holder Bank of America to get the lender to foreclose, accept a deed in lieu of foreclosure or allow a sale of the Nashville condominium.
In his ruling, Judge George Paine II ordered Pigg's bankruptcy reopened so that a trustee can sell the home, with the proceeds going first to the homeowner's association and then the bank. He reasoned that Bank of America has consented to the sale of the flood-damaged condominium through its inaction.
"With the real estate collapse, lenders, who otherwise have the right to do so, are choosing not to foreclose on their collateral leaving homeowners in limbo," Paine wrote. "Congress' broadening of (the bankruptcy code) to protect HOAs deprives the debtor of a fresh start, and thwarts the goals of the entire Bankruptcy Code."
In court filings, Bank of America argued that it was not obligated to foreclose on an abandoned property.
"Bank of America is reviewing Judge Paine's decision," the bank said in an emailed statement to The Tennessean. "At this time, we have not decided whether to appeal."
For questions on homeowners association dues in bankruptcy, call the San Jose Bankruptcy Attorney Henshaw Law Office at (408) 533-1075.
www.Bankruptcy-SanJose.com
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A federal bankruptcy judge in Nashville has ordered the sale of a flood victim's home after the lender refused to foreclose, in what legal observers say is a first-of-its-kind ruling.
Sheryl Pigg lost nearly everything in the 2010 flood, according to The Tennessean. She ultimately found a new home, declared bankruptcy and discharged her debts.
But a 2005 change to federal bankruptcy code made Pigg liable for continuing homeowners association fees at her abandoned home, because she was still the legal owner. Pigg sued mortgage holder Bank of America to get the lender to foreclose, accept a deed in lieu of foreclosure or allow a sale of the Nashville condominium.
In his ruling, Judge George Paine II ordered Pigg's bankruptcy reopened so that a trustee can sell the home, with the proceeds going first to the homeowner's association and then the bank. He reasoned that Bank of America has consented to the sale of the flood-damaged condominium through its inaction.
"With the real estate collapse, lenders, who otherwise have the right to do so, are choosing not to foreclose on their collateral leaving homeowners in limbo," Paine wrote. "Congress' broadening of (the bankruptcy code) to protect HOAs deprives the debtor of a fresh start, and thwarts the goals of the entire Bankruptcy Code."
In court filings, Bank of America argued that it was not obligated to foreclose on an abandoned property.
"Bank of America is reviewing Judge Paine's decision," the bank said in an emailed statement to The Tennessean. "At this time, we have not decided whether to appeal."
For questions on homeowners association dues in bankruptcy, call the San Jose Bankruptcy Attorney Henshaw Law Office at (408) 533-1075.
www.Bankruptcy-SanJose.com
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