Bankruptcy Category Archives — Riverside County Bankruptcy Lawyer Blog Published by Riverside County Bankruptcy and Debt Lawyer

Things not to do before filing Chapter 7

April 2, 2024 | by Christopher Hewitt

Filing for Chapter 7 bankruptcy is a significant financial decision that can have long-lasting effects on your credit and economic future. Before filing for Chapter 7 bankruptcy, there are several things you should avoid doing to ensure the process goes as smoothly as possible and to maximize the benefits of bankruptcy protection. Here are some things you should not do before filing for Chapter 7 bankruptcy:

Don’t incur new debt: Adding more debt shortly before filing for bankruptcy can raise suspicions of fraudulent behavior. Avoid using credit cards or taking out loans once you decide to file for bankruptcy.

Don’t transfer assets: Transferring assets or property to friends or family members before filing for bankruptcy can be seen as an attempt to hide assets from creditors. Such transfers may be considered fraudulent and can complicate your bankruptcy case.

Six Ways to Avoid Getting your Bankruptcy Case Dismissed

March 20, 2024 | by Christopher Hewitt

Filing for personal bankruptcy can be stressful for most people. Many families face irrational embarrassment and shame for going through a process created to protect working families. Nobody finds bankruptcy a pleasant topic or process. However, the end goal is to get your debt under control by discharging unsecured debt either through a Chapter 7 liquidation bankruptcy or a Chapter 13 repayment plan. Although all debtors have the same goal of discharge at the end of their case, avoiding the pitfalls that can allow your case to become dismissed is essential to ensure you get the results you want from your bankruptcy.

Serve all the creditors in a timely fashion

As soon as a debtor files for bankruptcy, the debtor or their attorney must notify all of their creditors of the bankruptcy. Timely and accurate notifications to the creditors are a legal requirement upon filing your bankruptcy petition. Each creditor needs the opportunity to dispute the bankruptcy petition if they find any discrepancies or fraudulent information within the bankruptcy petition. A debtor who fails to notify all the creditors of their bankruptcy risks the possibility of having their case dismissed.

Getting a Heloc Loan in California

November 27, 2023 | by Christopher Hewitt

Over the past three years, a series of impactful events have significantly influenced the housing market. In response to the economic challenges posed by the COVID-19 pandemic, the Federal Reserve injected unprecedented amounts of money into circulation. This infusion of funds gave more individuals cash in hand to make down payments on homes.

Why Did California Home Prices Rise So Fast?

Simultaneously, the widespread adoption of WFH (work from home or remote work) reshaped living preferences, prompting a shift from urban to suburban and rural areas. People realized that if they didn’t need to consider commuting, they saw their relationship with work differently and could make lifestyle choices accordingly. Those who made a home purchase in 2020 or 2021 likely secured favorable fixed-interest rates, while those with adjustable rates may find themselves facing financial challenges. With interest rates at historic lows during the 2020-2021 period, the National Association of Realtors (NAR) highlighted in a report that the qualifying income for a median-priced home in America was approximately $50,000. Fast forward to 2023, and this figure has surged to around $107,000. This means that prospective homebuyers, who would have met the criteria for a home loan just a few years ago, now need significantly higher incomes to afford a similar property. This makes the number of possible home buyers shrink immensely over just a few years, not because they don’t want to buy a home but because they are no longer able to qualify for the mortgages. There are even stories floating around online that people who no longer qualify for the mortgage they already have, are being forced to refinance under the new interest rates simply because they no longer qualify based on the current conditions. That means theoretically people who had a 3.5% fixed mortgage could be forced into a 7.5% mortgage simply because they don’t make enough money after inflation. America has a habit of charging people more money when they can’t afford their current situation.

How to Give a Car Back

November 17, 2023 | by Christopher Hewitt

How it started

When Covid-19 hit America it was a black swan event that nobody could have predicted the series of financial turmoil it would cause for many Americans. Several major factors contributed to the reasons why Americans decided to buy new cars. Huge stimuluses were provided giving millions of Americans cash in hand as they pivoted from working in offices to working at home. With overflowing bank accounts and the fact that nobody could travel, eat out or do anything, many people decided to go out and finance new cars. Supply chains were also virtually shut down making car production and delivery difficult resulting in people fighting over what inventory was available. Many people are now asking how to give a car back and we are going to explore the options available to you.

What dealerships did

How to File for Bankruptcy and Keep Your Car

November 11, 2023 | by Christopher Hewitt

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How to File for Bankruptcy and Keep Your Car

If you’re contemplating bankruptcy and worried about keeping your car or truck, the solution isn’t straightforward, but there are strategies available to help you keep it. If you bought a brand-new or even a used vehicle over the last few years and you paid a premium for it, the vehicle may be underwater. There were many buyers during covid and people were offering over value on many hard-to-find vehicles when both manufacturers and dealers were unable to keep up with demand. This in turn pushed many Americans to agree to buy the car or truck that they wanted sometimes for thousands of dollars over the median price. Now that demand has slowed a bit there are many car owners who have vehicles in which they owe far more than the vehicle is worth.

Can I file for bankruptcy?

Student Loan Debt Options

November 4, 2023 | by Christopher Hewitt

California Student Loan Debt Options

For people in debt right now, things just got a lot worse. Notices have gone out to student debtors across the US that the moratorium has expired and can’t be extended thanks to the debt ceiling agreement. Payments have resumed since October 2023 and there are many unlucky people that simply can’t pay another bill right now. If you are considering your California student loan debt options, there is a lot to untangle. This article will focus on how you can (or can try) to discharge your student loans through bankruptcy, however there are some other good options I have listed below the article that you may want to consider if bankruptcy is not a consideration or of interest to you.

How do you start the process?

Using California’s 703 vs. 704 Exemptions

October 18, 2023 | by Christopher Hewitt

If you are a resident of the state of California you can take advantage of the state’s generous exemption laws to protect your property and other assets but it is important to understand the limitations of these laws and how they apply to your specific situation. When filing a Chapter 7 bankruptcy it is important to note that the majority of Chapter 7 bankruptcies are no-asset cases where the trustee does not make any attempt to sell your personal property. With that said, if you own a home or have other expensive assets you want to protect you will want to understand all of the rights you have under California law and apply them when possible. California has created bankruptcy laws in order to protect people and their property allowing them to become debt free and get their finances back on track. Exemptions enable you to retain specific assets following bankruptcy. It’s essential to choose the set of exemptions that aligns with your particular requirements. You cannot blend exemptions from both sets; rather, you must exclusively utilize exemptions from one set or the other. For married filers, both spouses must utilize the same set of exemptions without the option to double their exemptions.

Homestead Exemption:

Most states in the United States offer homestead exemptions to safeguard one’s primary residence in the event of bankruptcy. Unlike some other states, California does not permit the utilization of Federal exemption laws in a California bankruptcy proceeding. Instead, California offers two distinct exemption schemes as specified in Section 703 and Section 704 of the California Code of Civil Procedure. When deciding whether you should be Using California’s 703 vs. 704 Exemptions you need to understand the difference between and what best applies to your situation. While it is possible to negotiate with your mortgage lender to bring your delinquent mortgage up to date in Chapter 7, it’s crucial to recognize that the lender is not obligated to cooperate, and a significant number choose not to. To safeguard your home from potential loss in Chapter 7, it is advisable to ensure that your mortgage payments are up-to-date, that you can shield all equity through a homestead exemption, and that you are capable of maintaining your mortgage payments even after the bankruptcy process.

What happens if I default on my SBA loans?

September 25, 2023 | by Christopher Hewitt

What happens if I default on my SBA loans?

Covid-19 hit small businesses hard, leading the U.S. government to initiate several programs aimed at supporting struggling American businesses. As part of the U.S. Small Business Administration’s (SBA) Disaster Assistance program, these efforts included the Paycheck Protection Program (PPP), which played a central role within the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. The PPP was designed to provide vital resources to small businesses, enabling them to sustain their payrolls, rehire laid-off employees, and cover essential overhead costs during these challenging times. The CARES Act, along with the subsequent Coronavirus Response and Consolidated Appropriations Act of 2021, swiftly delivered direct economic assistance to American workers, families, small businesses, and various industries in need.

What was the plan?

Subchapter 5 Offers Small Businesses Debt Relief

September 5, 2023 | by Christopher Hewitt

Introduction

The COVID-19 pandemic brought unprecedented challenges to the United States, with small businesses being hit particularly hard. Recognizing the urgent need to provide relief to these struggling enterprises, Congress introduced a new bankruptcy option known as the Small Business Reorganization Act of 2019, commonly referred to as Subchapter 5. This groundbreaking legislation aimed to offer a lifeline to small businesses grappling with mounting debts during one of the most significant financial crises since the 2008 housing bubble burst. Prior to Subchapter 5, Chapter 11 bankruptcy was the primary mechanism for debt reorganization, but it proved to be complex, costly, and inaccessible for many small businesses lacking the financial resources to navigate its intricacies. Subchapter 5 offers small businesses debt relief by being an efficient, affordable, and accessible alternative, providing a ray of hope for struggling entrepreneurs.

The Genesis of Subchapter 5

China’s Evergrande files for Chapter 15 Bankruptcy

August 29, 2023 | by Christopher Hewitt

China’s Evergrande files for Chapter 15 Bankruptcy

In breaking financial news, China’s troubled developer Evergrande has just filed for Chapter 15 bankruptcy in a New York Court yesterday. In this article we will explore both what a Chapter 15 bankruptcy is and how this bankruptcy is showing the cracks in the Chinese financial system.

What is Chapter 15?