Friday, July 30, 2010

JUST SAY NO to debt collectors .

People who come to see me are worn out by debt collectors. It's understandable, they're called day and night.  Usually there's not too much they can do anymore about their financial problems. If you are facing debt collectors and losing sleep over the stress of it all, you do have other options.

 Just say no. It is our right under the fair debt collection practices act to tell the debt collectors, don't call me anymore. When this happens you must send them a letter in writing.. I suggest that you mail it certified, "return receipt requested" so you have proof of its delivery. Once the agency receives your letter, its employees can only contact you one final time to explain what action they plan to take. If this is your story my hope is it's to help you. Just saying no, can give you a break from the stress. If I can help you please feel free to call

Wednesday, July 28, 2010

What is a credit rating and credit rating after bankruptcy

As I remember sitting in my high school government and civic class on how to be a good citizen I don't recall learning about credit scores. In fact they didn't teach it in law school either. These days though you are well served knowing a little bit about credit scores.

What's in a credit  score?
35 percent Payment History: "Having a long history making of payments on time and no missed payments on all credit accounts is one of the most important items lenders look for." 

·         30 percent Amount Owed: "This measures the amount you owe relative to the total amount of credit available. Someone   closer to maxing out all their credit limits is deemed to be a higher risk of late payments in the future and this can lower their credit score."
·         15 percent Length of Credit History: "In general, a credit report containing a list of accounts opened for a long time will help your credit score. The score considers your oldest account and the average age of all accounts."
·         10 percent New Credit: "Opening several new credit accounts in a short period of time can lower your credit score. Also multiple credit report inquiries can represent a greater risk, but this does NOT include any requests made by you, an employer or by a lender who does so when sending you an unsolicited, "pre-approved" credit offer. Also, to compensate for rate shopping, the score counts multiple inquiries in any 14-day period as just one inquiry."
·         10 percent Types of Credit in Use: "Your mix of credit cards, retail accounts, finance company loans and mortgage loans is considered."

One of the main questions I'm asked is, what happens to my credit score after bankruptcy? I've enclosed one of my videos to give you a quick overview. If you're considering bankruptcy take a look at it. 

Tuesday, May 4, 2010

Chapter 7 bankruptcy -Get Real Answers

If you are considering Chapter 7 bankruptcy the best advice and information you can get is person to person with a bankruptcy attorney. There is much about this type bankruptcy that depends on how you “package” your financial situation. There is many things you can do on the internet these days, figuring out if you "REALLY " qualify for bankruptcy isn't one of them. 

A “fresh start” or “clean slate”, Chapter 7 is a form of bankruptcy designed to let people (and sometimes businesses) get out of debt without repaying any of the “unsecure” creditors. While Chapter 7 also requires the person(s) filing go turn over to the bankruptcy trustee all “non-exempt” assets, skilled planning with an experienced bankruptcy lawyer can usually ensure all the filer’s assets are exempt (i.e., the filer gets to keep the property.)

 With Chapter 7, the Court, not the creditors, decides whether any assets should be sold to pay creditors.  While there is both an art and a science to actually completing the documents to be filed in a Chapter 7, much greater skill is needed to plan for minimum loss to the person filing.  If the person filing Chapter 7 can’t pay reasonably necessary living expenses and pay something to the unsecured creditors, the Chapter 7 filer should sail through the process pretty smoothly.

A Chapter 7 case must be filed in the venue (district) where the person filing has lived for the better part of the last 180 days.  Not surprisingly, the process requires the person filing to bare his / her financial soul to the court and the creditors.  All income, assets, debts and creditors must be disclosed.  Again, careful and skillful planning is essential!. Most bankruptcy lawyers will talk to you free at least the first time.Take them up on the offer, you deserve it.

Wednesday, April 21, 2010

Debt Collector Harassment-Protect your Privacy

When you are dealing with aggressive debt collectors and creditors it's important to be conservative about the information you give to them. I know that it is your intention to pay your debts if you can. If though debt collectors are calling you so much that you have decided to read my bankruptcy blog, it's time to ratchet up your approach with them.

Do not provide a debt collector with bank account information. If a debt collector requests you make payment over the phone just pass Don't make a payment that way, send it in the mail.When you make a payment over the phone you provide all your banking information to the collector. When they have your banking information if they sue you they can garnish your wages and get a judgment, without much work.

Make payments on debts that are not current by using money orders. Using money orders, you are protecting (at least to some degree) information about your bank accounts.

Be conservative about provideing  debt collectors with information about your current employment.  By not releasing this information to a debt collector, you will make it more difficult for a creditor to obtain a garnishment of your wages should a creditor obtain a judgment from a court against you. If you need please feel free to call me about aggressive debt collectors ,there is legal action that can be taken .

Monday, April 19, 2010

When to File Bankruptcy

Ninety-six percent of the people who consult with me just happen also to be candidates for filing Ch. 7 bankruptcy. This fact  has always been something that surprised me. Knowing if you qualify for bankruptcy and can file bankruptcy is not something you can figure out from the Internet.    How did these folks know
when to file bankruptcy?  How can you know when it is time to file bankruptcy?

A variety of ways.  Some realized it only after they had drained their retirement accounts trying to stay current on bills.  Others caught it when they were just starting to dip into their 401k and got an uneasy feeling about it.  Still others got really tired of the nasty phone calls from collection departments. For the badly harassed, some were losing sleep, their health - or, what feels worse, the health of a spouse - was declining. They worried about lawsuits, and some had already been sued.  The unluckiest of them had already had his or her wages garnished.

Chances are if you are feeling uneasy, melancholy, depressed or downright hopeless about your financial situation, you should go with your gut and get bankruptcy advice.  Your intuition is a really accurate barometer of which direction to take.

Wednesday, April 14, 2010

Bankruptcy and Employment Credit checks

Many out-of-work job seekers are facing a double whammy when applying for a new job: a marketplace flooded with competition for the job, and more employers doing credit checks.  Many have been unlucky enough to be out of work long enough to have missed a few bill payments, sending their credit history to a new low.  This can be a negative when a prospective employer looks at it.  So, just how bad is this problem, and what can you do about it?

According to an article by Kristen McNamara in the March 16, 2010 Wall Street Journal, about 47% of employers do credit checks.  Most of those are part of a background check for jobs having to do with "fiduciary or financial responsibility, such as accounting, budgeting or those involving cash or cfredit-card information", according to the article.

Sandy Gross of Pinetum Partners in Greenwich, Conn. is quoted in the article, encouraging applicants to give a prospective employer a heads-up as to what the employer might find on a credit report, and to explain why.  "No one likes a surprise", she says.  DO be up front about your credit problems. As a general rule, DON'T refuse to consent to the credit check, since the employer may simply assume the worst. The good news is that you'll have a lot of company.  In this economy, the credit-challenged may just outnumber those with pristine reports.

There may be help on the way.    Federal legislation has been proposed calling for a prohibition on the use of credit checks "during the hiring or firing process, with certain exceptions", according to the article. A law like that couldn't arrive too soon for many who have seen their credit hit the hardest of times.

Monday, April 12, 2010

Short Sales, Foreclosures and Bankruptcy

Here's the situation: John and Mary short-sold their home a year ago.  Or maybe they couldn't quite pull that off, so it was foreclosed on.  They were sad and disappointed, but moved on.  They thought...

Fast forward: the holder of the second mortgage, in the amount of, say, $125,000, is now suing them for the entire balance owed.  Say what?  Oh, yeah.  This is one of the dirty little secrets that pretty much no one but bankruptcy lawyers is talking about.  And it's becoming a real "OMG" moment for a lot of borrowers, but it's one we've been warning clients about for years.

Worth reading is an article in April 12, 2010 Wall Street Journal, page A2, which tells of a specific case of a San Diego borrower who short sold her house .  While politicians are pressuring banks to change this practice, so far this remains a really serious risk for a homeowner who must give up their home  due to short -sale or foreclosure .  Most of the time, first-mortgage lenders are not a threat, though they can be.  It's those second mortgages that are far more dangerous for you the owner to get sued.

Bankruptcy is the only way to eliminate the threat from ALL lenders.  Some lenders will voluntarily agree not to pursue the borrowers.  Even when they do that, the borrower still risks a ginormous tax bill for "debt forgiveness."

THE BOTTOM LINE : Get legal advice before you do a short sale or get foreclosed on . Do it to make sure it is really going ot be over.

Tuesday, April 6, 2010

Bankruptcy information: Your 401K is it exempt ?

Most people who have come to see me have struggled with the thought of filing bankruptcy. The urban legend that people file bankruptcy because they want to take advantage of the system, it's just that an urban legend.

One of the mistakes I see is people who are struggling to hang on raid their 401K to pay their bills. Your 401(k) and some of their savings is exempt if you do decide to file bankruptcy. This is a particularly mistake for those unemployed people who who are within 10 years of retirement. Recovering your 401k savings is a 15 year time span is unlikely .It's important that you be realistic in your plans.Your retirement is going to last a lot longer than any credit score dings that will happen if you decided to file bankruptcy 

Monday, April 5, 2010

Filing for bankruptcy what to do first ?

No one ever wants to think that they are going to have to file for bankruptcy. These days, due to the economic upheaval, financial crisis, and housing bubble many good people have had to plan for bankruptcy. They had made decisions that looked sound at the time, but got caught up in a financial firestorm. If you were one of those people and feel it is time to start planning to file  bankruptcy there are a few things to keep in mind.

First is, make an appointment with a bankruptcy lawyer. I understand that this will be scary. No one wants to face this.   Making the call can feel uncomfortable and  embarrassing.  Some San Diego bankruptcy lawyers, myself included, offer a free consultation.  The purpose of your meeting is to determine if you qualify for bankruptcy.  It is to your best advantage to speak to a bankruptcy lawyer about this.  Due to the Internet and proliferation of information, clients that we speak to sometimes believe that they can determine if they qualify for bankruptcy online.  Nice thought, but it really isn’t that easy.  A bankruptcy attorney can give you the most realistic information that you need.  Not meeting with the bankruptcy attorney is never in your best interest.

When you meet at your first appointment to see a bankruptcy lawyer, bring least six months of your pay stubs. Plan ahead: before you schedule your appointment to speak to a bankruptcy attorney call your HR department and get a copy of six months of your pay stubs.  If you are married, bring your spouse.  Even if your spouse isn’t filing with you, he (or she) will still usually have to sign a waiver.  Plus, if you decide to file bankruptcy, going forward all joint credit will be affected. Keep this in mind when you call to schedule your appointment with your bankruptcy lawyer. The third thing you will need to consider when planning for bankruptcy is to stop using your credit cards for significant credit card charges. This would mean no vacations, no last hurrah :=)

 Planning for bankruptcy is something you should congratulate yourself for. You're taking the first steps in being proactive to get under control the financial firestorm you find yourself in.  It's a scary step, but will benefit your family and you


Sunday, March 28, 2010

We' re not the the only ones who have had problems with banks

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Thomas Jefferson, (Attributed)
3rd president of US (1743 - 1826)

Monday, March 8, 2010

Is Big Brother Positioned to Pick Your Pocket?

Is Big Brother Positioned to Pick Your Pocket? 

An article in Monday, March 8, 2010 Wall Street Journal by Ellen E. Schultz provides a cautionary tale for recipients of Social Security benefits.  The U.S. Treasury Dept. is on a tear, increasing the percentage of collections resulting from Social Security withholding from 1.6% in 2001 to "roughly 10%..." in 2008. 

How? Why? The "why" is probably obvious: our government is desperate to close the gap between income and expenses.  It recently gotten a new weapon in its arsenal: a provision in the 2008 Farm Bill which "lifted the 10-year statute of limitations on the government's ability to withhold Social Security benefits in collecting debts other than student loans..." WSJ, March 8, 2010.  Doubtless many of its claims are valid.  Of note, though, are two examples in the article.  In the first example, the SSA badly mishandled a claim, and resolved it only after the death of the person.  The second example involved a student loan obtained by forgery.  The victim of the forgery had to prove disability so she doesn't have to pay it back!  (I guess the SSA is not willing to concede she doesn't actually owe the money.)

Bankruptcy often doesn't help for these borrowers.  So what does one do? First, dispute a false or shaky claim.  Professional help - an attorney versed in Social Security appeals - can be worth his weight in gold. If the debt is valid, though, an ounce of prevention is likely to be better than a pound of cure (especially if there is no cure.)  Diplomacy may be more effective than direct confrontation. 

Wednesday, March 3, 2010

Church Tithing, Charitable Giving and Bankruptcy

Church Tithing, Charitable Giving and Bankruptcy
My favorite article from today's Wall Street Journal is front page

Sunday, February 28, 2010

San Diego Loan Modifications? Scarce as Unicorns

San Diego Loan Modifications? Scarce as Unicorns!  (Almost.)

Lots of San Diego homeowners are hopeful they are going to get a loan modification.  Most shouldn't be. It's a wonderful idea, and our well-meaning politicians have made some funding available.  There's even talk now about legislation that would REQUIRE lenders to reduce principal.  More about that below.  And yet, a very, VERY small percentage of loans which "qualify" for modification - say, under Obama's H.A.M.P. program - are actually being modified.  Why?  For one thing, the processes are convoluted and time consuming.  For another, the most conscientious borrowers are staying current, and as a result, lenders won't even talk to them about modification. I know how to do these things, and could charge money to do them, if they actually succeed. I stopped even offering the service in San Diego, because I have ZERO faith in the probability of a decent outcome, my own considerable skills notwithstanding.  The people who see me have enough trouble as it is.  I'm not going to add months of stress and anxiety waiting for what is a pipe dream for most in San Diego.

Many (most, actually) big banks have repaid their bailout money, and so aren't required to play be the same rules on "loan mods" anymore.  And as for laws making banks write down principal balances, well, expect those proposals to die in committee or in litigation where lenders and scholars will argue that such a law would amount to an unconstitutional government "taking" without "just compensation."  Remember the saying, There's no such thing as a free lunch?"  Someone has to pay for it. Banks aren't about to volunteer.  The taxpayers won't either.  Who does that leave? Anybody?