Category: Chapter 7

Chapter 7 bankruptcy information, for lower-income people with no ability to repay debt, involving liquidation of assets

Family giving and transferring to one another, which may be an bankruptcy insider transfer

Bankruptcy Insider for Preferences: Key Things to Know

Bankruptcy Insider for Preferences: Key Things to Know

What is an insider in bankruptcy, and why should I care? What is a statutory insider, and is there such a thing as a non-statutory insider? The issue with insiders is fraudulent transfers, which would give a Chapter 7 trustee the right to go claw back money used to repay the debt of an insider just prior to filing.

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steps to filing bankruptcy in California

Essential 11 Steps to Filing Bankruptcy in California

Essential 11 Steps to Filing Bankruptcy in California

Step-by-Step Guide for filing bankruptcy in California, from a trusted Los Angeles bankruptcy lawyer

Here are 11 steps to filing bankruptcy in California. I’m Hale Andrew Antico, an established Los Angeles bankruptcy attorney, and I have helped thousands of people in Southern California get a fresh start by filing bankruptcy for the past twenty years.  You really should at least meet with an attorney for a once-in-a-lifetime process with serious consequences. As an introduction to how all this works, here is a step-by-step guide to file bankruptcy in California in 2023, with 11 steps from filing to discharge.

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reset the 1215 days for the homestead

Can a Home Transfer to a Trust in 1215 days Blow the Homestead?

Transfer but Keeping Equitable Interest, 1215 days, and Homestead

A look whether a refinance or transfer to a LLC, will, or trust restarts the 1,215 days for a homestead exemption in California

The maximum California homestead exemption now protects over $600,000 of home equity. However, there are conditions for a debtor to protect this amount in a bankruptcy. One of these is that the homeowner must have acquired the interest over 1,215 days ago. Does a refinance or transfer to a will, trust, or LLC restart this crucial timer? Let’s take a look.

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unvested stock options subject to liquidation in Chapter 7 bankruptcy

Keeping Stock Options in Bankruptcy Depends on This Key Factor

Keeping Stock Options in Bankruptcy Depends on This Key Factor

Are Unvested Stock Options subject to a Chapter 7 Bankruptcy liquidation? Ninth Circuit case law clarifies.

Unvested stock options aren’t very common, but if someone gets compensated with contingent stocks, they can be worth a lot of money.  Keeping the unvested stock options in a Chapter 7 bankruptcy liquidation, then, becomes critical.

Stock Options and Property of the Estate

Stocks and the Bankruptcy Code: Section 541

The first place to start is determining whether stocks or stock options are property of the estate.  Looking at 11 USC 541(a)(1), we see that “Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.”

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California bankruptcy exemptions can save your house.

New! 2024 California Homestead Exemption Increased by Inflation

2024 California Homestead Exemption, increased by inflation

Brand new! The maximum 2024 California Homestead Exemption amounts

The 2024 California homestead exemption numbers are already available, and different from last year, and even the original range of $300,000 to $600,000. In fact, in 2024, they top out way higher than $600,000, which helps you save more of your home from creditors than the homestead exemption could in 2023. Why? Because of inflation. The new California homestead exemption is tied to the CPI, or consumer price index.  And everyone knows things lately aren’t cheap.

November 2023 update: The new inflation-adjusted 2024 California homestead exemption is now known. See below what it will be for cases filed after Jan 1, 2024. Don’t worry – the 2023 homestead exemption amount is still here for cases filed before on Dec 31, 2023 or earlier.

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Figuring the Los Angeles Country median home price size is like trying to calculate the median coin weight when all we have is data about stack size

How to Figure the Los Angeles County Median Home Price (2023)

How to Figure Los Angeles County Median Home Price (2023 & 2024)

The Los Angeles County median home price in 2023 can be tricky to determine. There are different sources that say different things. It’s not clear which of the many options will be relied upon by courts and trustees for the California homestead exemption.  Also, while bankruptcy may seem to be “just forms,” make sure you check out my list of 12 crucial tips to do or avoid before filing bankruptcy.

2023 update: there seems to be a consensus among local bankruptcy attorneys as to what the Los Angeles County median home price is. More than that, this L.A. median price changes each year. While it’s still untested in court, a lot of the initial uncertainty has cleared up.  Read on!

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Amending exemptions or schedules in a reopened case is not allowed in some courts

Amend Exemption in Reopened Bankruptcy? The Three Approaches

Amend Exemption in Reopened Bankruptcy? The Three Approaches

In a bankruptcy case where you already got the order of discharge and has been closed, can you go back and reopen the case to amend the exemptions to protect an asset? The answer is (say it with me): it depends.

The Scenario: Need to Reopen & and Amend Schedules

If you practice bankruptcy long enough, you know the situation. Debtor files bankruptcy, and somehow forgets that they had a cause of action and (potential) lawsuit against someone, and doesn’t disclose the potential asset.

Years later, defendant finds out about the bankruptcy, considers judicial estoppel, and for good measure, notifies the old bankruptcy trustee about the asset in the closed bankruptcy case.

Debtor then reopens the bankruptcy case, and amends the schedule of assets and exemptions and all is forgiven. No harm, no foul.

Of course, this can also happen when you want to avoid the lien of a home with no equity at the time of an old case, using Section 522(f). This would lead to the need to reopen and amend Schedule C with a de minimis amount to show that the lien is impairing an exemption.  In re Higgins, 201 BR 965 (9th Cir BAP 1996)

The Problem: Can you Amend Exemptions after a Bankruptcy is Closed?

We start with one potential issue:  Rule 1009(a) of the Federal Rules of Bankruptcy Procedures says when a case can be amended. “A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed.”

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median income limits

2024 Median Income Limits to Nail Bankruptcy Means Test in Calif

Median Income Limits to Nail the Bankruptcy Means Test: New for 2024

The government just updated the numbers for 2024 median income limits. Using median household income, it again got easier to qualify for bankruptcy Chapter 7, because of another means test adjustment.  And while bankruptcy may seem to be “just forms,” make sure you check out my list of 12 crucial tips to do or avoid before filing bankruptcy.

The means test for bankruptcy decides who qualifies for Chapter 7 bankruptcy eligibility. The first step of this process is comparing your median household income against the California median income limits set by the Department Of Justice guidelines to see if you earn less than bankruptcy median income limits.

Again, this comparison against the median income is merely the first step, and does not absolutely determine your eligibility for Chapter 7 or not.

November 2023 Update:  The numbers for the means test adjusted November 1, and will be used for the first part of 2024.

Because of the above statement, these will be the last updated 2023 median income limits.

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Chapter 7 reaffirmation agreement

Chapter 7 Reaffirmation Agreement

Chapter 7 Reaffirmation Agreement

What is a reaffirmation agreement in Chapter 7

A Chapter 7 reaffirmation agreement is where the evil creditor is trying to get you to owe money after the bankruptcy is over. This is of course a bad thing. But there’s one problem: in some cases, you have to sign the reaffirmation agreement. Note: one advantage of Chapter 13 bankruptcy is no need to reaffirm debts.

2023 Update: Ride-through is back in California bankruptcy, which significantly impacts the requirement to sign a reaffirmation agreement. This is due to the passage of SB 1099, which has a number of changes in California law to help debtors filing bankruptcy.

What does it mean to reaffirm a debt?

To reaffirm a debt is to agree with the lender that you’ll continue owing a debt. You’re basically saying, “I’m good for it.” You’re giving the creditor the power to maybe take things from you and sue you if you ever break the agreement.

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means test for chapter 7 bankruptcy

Bankruptcy Means Test: a calculator, and a trick to pass (2023)

Bankruptcy Means Test for Chapter 7 in California, and Everywhere Else

Bankruptcy means test for Chapter 7 was created by Congress to decide if you qualify for liquidation or straight bankruptcy.  Here is what it is, some answers to common bankruptcy means test questions, and a weird tip on passing the bankruptcy means test and its median income limits (ok, it’s not weird, but I think you’ll find it helpful).

Historically, there was no bankruptcy income limit

Before 2005, any income earner could, in theory, file Chapter 7 bankruptcy. There was a time in those days where a single person filing bankruptcy could earn $8,000 a month after taxes and still get a discharge. The credit card companies lobbied Congress to change the law and make it harder to qualify. In response, Congress passed a bankruptcy reform called BAPCPA in 2005. One of the new provisions was to add a means test so that the more someone earned, the harder it became to qualify for Chapter 7.

What is the Bankruptcy Means Test

The bankruptcy means test is a long form that asks how much money someone has earned recently. It starts by determining a) what your “current monthly income” is. Then, it compares that to b) a median income limit for their state, for a similar-sized household. If your income is less than the magic number, you pass the means test for Chapter 7.  Consequently, you can file bankruptcy that way.

Figuring Your Current Monthly Income

Once you’ve figured out which income limit number is the standard for your state, you now need to compare against it your current monthly income. And like most things in bankruptcy, this is not as straightforward as it seems.

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