Bankruptcy Category Archives — Page 5 of 6 — Riverside County Bankruptcy Lawyer Blog Published by Riverside County Bankruptcy and Debt Lawyer

FTC imposes new rule on Debt Settlement Industry

August 16, 2010 | by Christopher Hewitt

According to the new FTC Telemarketing Sales Rule debt relief companies who receive inbound calls are also now prevented from receiving up front fees until a debt is settled. Many debt settlement companies charge upwards of 15% and charge this before anything is paid to your creditors. Meanwhile your interest rates are rising, late payments are accumulating, and other fees are being asessed. Essentially there will be no frontloading payments only to have you sued by creditors inevitably unless you can pay quick enough on a settlement and depending on your assets a company might not want to settle. Unfortunately many companies do not truly look into whether debt settlement is the right option and consumers are constantly bombarded by advertisments of promises to settle at 50% of what is owed and saving their credit. Typically by not paying your credit cards for months on end you will be offered a settlement to pay as a lump sum, you end up with late payments and settled for less than amount owed on your credit report for 7 years. While its true that bankruptcy stays on your credit report for 10 years, by the time you settle all your credit cards if you have a lot of debt it will take 2-3 years and then it will be reported for 10 which is virtually the same thing.

Fortunately debt negotiations will still be a viable alternative for a bankruptcy attorney to review since attorneys aren’t making telemarketing calls or receving inbound calls from advertising. Clients that meet with a debt relief agent in person are not subject to the rule but some will still try to charge up front fees that are egregious fees, this at least stops the deceptive phone campaigns that are being waged across the country. I do believe in debt settlement for some people which is not a popular position amongst bankruptcy attorneys as many have seen the perils that it has had on clients who have wasted their money only to end up in the same situation but with much less of a fresh start. I understand that but also see it as a tool for people who have access to quick funds through a new business or have the ability to get a loan from family and who might otherwise pay more over a long Chapter13 plan.

The new rules ensures that companies disclose tax consequences associated with debt settlement, stops them from using bad statitstical data on past successes by not including drop outs and other important considerations, and makes sure they explain the time it will take based on current payments and other important disclosures. These are all things that I have been doing and assessing with any client that considers having me negotiate with their creditors. Debt settlement can be a risky venture to take although it can be very worthwhile if done right and should come with a list of disclosures and verifable statitics that can be enforced through fines and penalties assessed by the FTC. It is a good day for consumers and hopefully this will direct some of the people who really should be considering filing for bankruptcy instead of being lured into a false illusion of debt settlement based on small savings and 3 years plans that often fail. Talk to a qualified riverside bankruptcy attorney to see if debt settlement is a viable option and then learn about bankruptcy.

Lawsuit or summons in California by Hunt and Henriques?

August 12, 2010 | by Christopher Hewitt

Hunt and Henriques seems very trigger happy to sue but not so diligent in taking care of their lawsuits. If you have been sued by Hunt and Henriques or recently received a summons, there are several options available. You can file a chapter 7 or chapter 13 bankruptcy. You can try to negotiate with them before they get a judgment and most likely can get 70% settlement on what you owe. You can fight the lawsuit and hope they don’t follow the local court rules which isn’t as unlikely as you’d imagine. This is a major debt collector structured as a law firm, but one that is hard to get a hold of and one that doesn’t necessarily show up with the right documents to court.

A chapter 7 bankruptcy if you qualify will wipe out the debt completely. A chapter 13 will allow you to pay pennies on the dollar or if you have a lot of assets or money at least stretch your payments over 3-5 years depending on your income level. Hunt and Henriques is the biggest collector for Citi and if you spend any time trying to get a hold of them you will see why I believe optimism should prevail in the fact that you’ve been sued by a debt collector who doesn’t follow through with all their cases.

Cramming down a car in Chapter 13 bankruptcy

August 12, 2010 | by Christopher Hewitt

Chapter 13 has some powerful aspects that can really help people with financed vehicles. In a chapter 13 if you owe more on your vehicle than the current market value(blue book) then we can restructure your financing so that you pay on what the car is actually worth. This only works if the financing is more than 2.5 years old so you can’t buy a new car and walk off the lot and get it crammed down, but it works for a lot of people and can save you quite a bit of money.

I have had clients that have been able to fund a chapter 13 plan just in the savings that they made by cramming down their car. If you owe 20k on a car and its only worth 10k then just the money you save in financing would give you 200 a month to fund a chapter 13 plan.

Although Chapter 7 can be a faster way to get debt free, a chapter 13 with its cram downs and lien strips on real property can be a valuable way to put yourself in a great position to come out ahead when your chapter 13 debts are discharged.

Hunt and Henriques

July 7, 2010 | by Christopher Hewitt

I have had more and more clients call me about Hunt and Henriques.

Hunt and Henriques are one the biggest debt collectors for Citi in California.
They have a few attorneys but a lot of collectors and are essentially a collection company posed as a law firm. They do file suits and I have had many clients sued by them but they take their time in trying to collect the debt before they bring it to a law suit. They are very unorganized and hard to deal with. They don’t answer their phones some days, they don’t call back. I have dealt with them on the debt settlement side and Hunt and Henriques can be bull headed and are one of the hardest companies to negotiate good settlements on. Even when my clients have been served by a Hunt and Henriques law suit, they still don’t answer their phone and deal with the issues. Filing bankruptcy on cases that they handle makes me happy as I hate debt buyers and collectors that act in the way that they do. They are very disorganized and it might even be a decent idea to fight them in court over alleged credit card debt as I would imagine they don’t show up with the right paperwork etc. I had one case where my client was 3 days away from getting a discharge and Hunt and Henriques wasted their money on a filing fee and process server to serve them 3 months after we filed bankruptcy.
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Loan Modifications are a hoax, don’t wait on one to file for bankruptcy

June 22, 2010 | by Christopher Hewitt

I get phone call after phone call where people want to file for bankruptcy and continue to work with their lender on obtaining a loan modification. The problem is that once you file the lender has to stop directly working with you because they are a creditor and to continue on negotiations during the bankruptcy process for three months in a chapter 7 is a violation of the automatic stay.

Should this prevent you from filing bankruptcy? In my opinion, absolutely not.

Getting a loan modification of any substance for most people is a fairy tale. I can tell you more people that I know who have had to re-file paperwork a million times because the bank lost important documents, than the number of people that have got meaningful loan modifications. In my mind, its just a way for the banks to prevent house values to plummet further during this crisis. They keep your foreclosure at bay by tricking you into believing that they will be working on your loan modification. I have had clients that I tried to get loan modifications for over a year ago and still nothing has come of it. I would never take a loan modification again in my life and to advise a client to wait on filing for bankruptcy for the bank to modify your loan, I think should be negligence per se. I understand people wanting to keep their homes and you can in a 13 even if you have several back payments that you need to make good on. In a 7 you can keep your home but only if you remain current so that is part of the problem with this whole loan modification debacle. You have to be behind on your payments to get a loan modification typically so to file chapter 7 and keep your home, you are going to have to get caught up quick. Many people can’t so they will lose their home but remember you wouldn’t be modifying your loan unless your house was completely underwater. The bank would never do it. In my opinion we should make the bank show their hand and get through this housing crisis quicker. All the banks are doing is stalling a lot of people out so that house prices can artificially rise for a short period of time and then they will unload all this shadow inventory for higher prices. I think the likelihood of you getting a loan modification is close to 10%, the rest of you are holding your breath for something that will most likely never be realized.

DON’T LET GUILT STOP YOU FROM GETTING A FRESH START

June 16, 2010 | by Christopher Hewitt

Don’t feel guilty about filing for bankruptcy.

When forced into dealing with overdue bills and financial problems, many of us bury our head in the sand, stop opening bills and feel anxiety and guilt about the situation that we are in.

Don’t allow those feelings to stop you from finding out your options and your rights before its too late. There are many things that you can do during hard times that sound like the right thing to do but actually could backfire as far as your rights under the bankruptcy code go.

Questions I frequently get from clients

June 16, 2010 | by Christopher Hewitt

CALIFORNIA BANKRUPTCY FAQs

Question: Can I still file bankruptcy after I’ve been sued or after a creditor has a default judgment against me?

Answer: Yes. You can almost always still file bankruptcy and a judgment creditor will be in the same postiion often times as your other unsecured creditors. A bankruptcy will stop a wage garnishment so if you are about to get garnished or a lien is about to get filed on your property, now is the time to file for bankruptcy.

Chapter 7 and Chapter 13 bankruptcy in Palm Desert

June 14, 2010 | by Christopher Hewitt

I now serve clients through the Coachella Valley with a more permanent structure law office in order to help people file for bankruptcy.

I was running a virtual practice out of San Francisco but would take clients all over California. The majority of my clients were coming from the inland empire and I was spending a lot of time at the court in Riverside for trustee hearings.

I have decided to open in a office in the Palm Springs and Palm Desert area so that I can help people who are struggling to pay their bills and having foreclosure problems more directly with easy access to the Riverside Court. My practice is one that allows me to work from afar and gather all your documents that are necessary to file a bankruptcy petition and with fax, internet, scanner technologies all of this can be done very easily, however I think that having a local office can better assist certain clients at times so I will be doing a direct local marketing campaign in Indio, Rancho Marage, Cathedral City, Palm Desert, Redlands, Desert Hot Springs, Blythe, and other desert cities in the Coachella Valley in order to assist one of the hardest hit areas in the country for bankruptcy filings, foreclosures, and high unemployment.

Riverside county has close to 15% unemployment and that doesn’t even count the underemployed and people who have given up on finding a job.

My office will be in Palm Springs starting on August 1, 2010 and I will be traveling there frequently between now and then.
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Chapter 7 and Chapter 13 bankruptcy attorney Palm Desert Coachella Valley

June 14, 2010 | by Christopher Hewitt

I am now a local Bankruptcy Attorney for Riverside County.

I have been filing cases here for over three years but have recently decided to move my family to be able to service more bankruptcy clients. The riverside bankruptcy court is the busiest bankruptcy court in the country. In 2009 there were close to 120,000 cases filed here. The second largest was in Florida with 60,000 cases. Most of my business has come from this area for quite some time, but I also handled cases in Oakland, San Jose, San Francisco, San Diego, Los Angeles, Modesto, Sacramento. I will still take cases in the Northern and Eastern District and either fly there for the 341 hearing or pay a special appearance to do so.

My new focus will be serving the people of Riverside County and will occasionally drive to San Diego or L.A. for cases that I take on there. I have an a great relationship with many of the trustees in Riverside and have already built trust in the cases that I have been filing in Riverside court for 3 years.

Bankruptcy can be very predictable if I have all the facts and I have never had a client who did not get a discharge or have their case go in the direction that I predicted.

It’s best to talk to a bankruptcy attorney before allowing your situation to get worse. There are a lot of things we can do to protect your assets and prepare for a case and I can advise you on pitfalls not to take and make sure you keep things that are exempt currently in that position. It troubles me to see people who have cashed out retirement funds and other exempt items and ended up filing for bankruptcy anyways.
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The Bankruptcy process

June 7, 2010 | by Christopher Hewitt

The bankruptcy process starts with the filing of a petition. In the petition you list all your assets as well as your liabilities. I typically pull a credit report from all three credit bureaus and then review with my clients to ensure that all debts are in there since some creditors don’t necessarily list them with the credit bureaus(personal debts, pay day loans etc, medical debts that aren’t too old etc). In the petition we have to be thorough to be sure that we listed any kind of financial transactions that the trustee would be interested in knowing about. This could include paying back preferred creditors, selling a home within a year and other important financial events. You have to take a mandatory credit counseling class which you can do online before you can file. Most importantly is the pre-bankruptcy preparations that I go through with my clients to make sure all their property is protected and that they are filing at the right time. We have to calculate your income for the last six months to make sure that you qualify for a chapter 7 and if you are well over the median income then we have to do a 13 or some pre-bankruptcy planning to squeeze you into a chapter 7. If you have any questions please call me or fill out your name and I will get back with you to see whether filing for bankruptcy is your best solution.