Tag: chapter 7

Articles about Chapter 7 bankruptcy: the type where you don’t repay your debt because you can’t, but can lose your assets: home, car, money and other valuables

Automatic stay and bankruptcy protection

All About the Automatic Stay, the Ultimate Bankruptcy Protection

All About the Automatic Stay, the Ultimate Bankruptcy Protection

What is the Automatic Stay definition or meaning?

Automatic stay is the bankruptcy protection when a new petition is filed with the court. It protects against starting or continuing any debt collection. It’s a powerful provision, and stops all collection activity, maintaining the status quo on the day the bankruptcy papers are filed. Failure to respect the bankruptcy protection can lead to sanctions against the collecting creditor.

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Remote 341(a) meeting of creditors

Remote 341(a) Meeting & Zoom: What to Expect and How to Prepare

Remote 341(a) Meeting of Creditors by Zoom: What to Expect in 2023

Zoom 341a Meetings, explained by Los Angeles Bankruptcy lawyer

Remote 341(a) Meetings of Creditors by Zoom in bankruptcy are becoming the standard, instead of in-person. Here’s what to expect. They can be terrifying, nerve-wracking, and unpredictable. But there are ways you can prepare for a Zoom 341a Meeting to help it go more smoothly.

As someone who has attended thousands of 341s in person (after coaching my clients with my list of 12 prefiling do’s and don’ts), I answer your 341(a) questions and share with you what to expect at your 341(a) meeting in a post-pandemic world where Zoom 341(a) meetings are more common, and soon becoming the standard.

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sb1099 new california exemptions good news

SB1099: New 2023 California Bankruptcy Exemptions Increase

SB1099: New California Bankruptcy Exemptions Increase for 2023 | 5 Major Wins

SB1099, the new California exemptions increase which gives debtors in bankruptcy more protections, is now law.  The new California exemptions for 2023 help people in bankruptcy keep more of their assets, including their cars, their home, money, support pay, and sick leave. The bill was signed by the governor yesterday, and takes effect 1/1/2023.

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fraudulent transfer California

Fraudulent Transfer California: Top Keys

Fraudulent Transfer in California: Top Keys

Fraudulent transfers. Voidable or fraudulent conveyances. They go with these 17 words: “Have you sold, transferred, or given away anything worth more than $3,000 in the last four years?” It’s a 341(a) question bankruptcy attorneys can recite in their sleep, and one that can cause our debtor clients to have nightmares. The reason is the trap known as fraudulent transfers, voidable transfers, fraudulent conveyances, and the like.

Fraudulent transfer in California comes up typically here in Chapter 7 bankruptcy. Also known as a fraudulent conveyance, it can get your friends and family in hot water. It’s one of the top tips recommended to do or avoid before filing bankruptcy. Fraudulent transfer grief can even include the recipient being taken to court in a lawsuit, and forced to give up something they own. It’s terrifying and a nightmare. Worst of all, it can all happen with the purest of intentions.

That’s right: fraudulent conveyance doesn’t even require fraud.  More on that in a bit.

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california median income

California Median Income Hits New High

California Median Income Reaches Historic Milestones

The California median income is a good guide to how well residents in the Golden State are doing financially. The California economy (until the pandemic) was sitting pretty, and its citizens are earning income. The numbers used to qualify for a “straight bankruptcy” have broken some very notable milestones.

Nov 2023 Update: The updated 2023 median income numbers were released, which took effect on November 1, 2023. The California median income for a one-person household is now almost $10,000 higher than when this article was written three years ago.  Read the updated median income piece.

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Woman Facing Jail

Woman Facing Jail for Bankruptcy Fraud

A woman in Michigan recently pled guilty to bankruptcy fraud. Wait, jail? Bankruptcy is just forms, right? Just before filing bankruptcy, she had received a $12,000 workers’ compensation award. She, then made it disappear. After that, she lied about the whole thing. Now she faces five years in prison, $250,000 fine, or both.

When you file bankruptcy, you’re signing a stack of papers under oath. You’ll then be asked, under penalty of perjury, whether they list all your assets, income, and about any recent transfers. The wrong answer, a lie, could land you in jail for bankruptcy fraud.

The sad kicker is this: in California, this likely could’ve been avoided. All she has to do was everything disclosed everything. With a good bankruptcy attorney, it could then properly exempted. She’d be free today, enjoying her discharge and money.

She only had to tell the truth to her bankruptcy lawyer. Then, she needed to be honest in the bankruptcy papers. a good Los Angeles bankruptcy attorney could have exempted the award, and she’d have it to spend when the bankruptcy is over.

By trying to save a few bucks on maybe the best bankruptcy lawyer, she’ll not only lose $12,000, but maybe twenty times that, and her freedom.

Contact me today for a consultation, and let’s guide you to a honest fresh start.

 

credit after bankruptcy

Study: Credit After Bankruptcy Discharge is Likely

Study: Credit After Bankruptcy Discharge is Likely

A bankruptcy study recently debunked a myth. You know the one, that bankruptcy will ruin your credit forever. Last week, LendingTree, the largest online lender, released study results about credit after bankruptcy discharge. It followed people after their case was completed. This is consistent with my article asserting that there is indeed credit after bankruptcy discharge.

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bankruptcy debt limits

Is There a Debt Limit to Chapter 7

Is there a debt limit to Chapter 7?

One question people ask is, “How much do you have to be in debt to file Chapter 7.” Unlike Chapter 13 bankruptcy, there is no debt limit to Chapter 7. It just becomes a matter of practicality. There are financial benefits to file Chapter 7 bankruptcy, but these must be weighed against the costs, monetary and otherwise..

Too little debt for Chapter 7

The Bankruptcy Code has no lower limit to file bankruptcy under Chapter 7. The only limit is common sense. One the one hand, if you owed someone a dollar, and the Chapter 7 filing fee is $335, most people would just pay the dollar. No brainer. Another example: if you owed someone $1000, the debt is greater than the filing fee, but now there are other costs you’d weigh, like the hit on your credit. Is it worth it to discharge $1,000 of debt but have a bankruptcy on your credit report? Most would say no. Each individual weighs their own personal limit line differently. Many people would agree that $20,000 or $30,000 of debt is a lot to ditch in a bankruptcy discharge. A debt amount that high may outweigh the cost of the bankruptcy filing fee, paying a bankruptcy attorney, and the credit report ding. While there’s no debt limit to Chapter 7, we bankruptcy lawyers do see a typical range of debt.

Too much debt for Chapter 7?

On the other hand, there’s nothing written in the law that has a specific dollar amount that becomes too much debt to file a Chapter 7 bankruptcy (note: this is in contrast to Chapter 13 bankruptcy, which has a maximum debt limit set by law in 11 USC 109(e), which periodically adjusts, so check current chapter 13 debt limits).

There are other factors though that can stop a bankruptcy with too much debt. Firstly, the government looks at whether the debt was obtained in good faith. If someone unemployed for years has $250,000 of credit card debt, were they really intending to pay it back? Secondly, they look at the nature of the debts: were they luxuries like travel? Another factor is if the debts or discharge was obtained by fraud. Too much debt is situation specific. It may make sense for a business owner to have a lot of debt, but maybe not so much for a retired grandma.

Summing up the Debt Limit for Chapter 7

In short, there is no debt limit to file Chapter 7. Common sense factors would make it not worthwhile to file Chapter 7 bankruptcy for some. There is an upper limit that will get you on the trustee’s radar, though it’s not sure exactly what that number is. Like most things, if it’s reasonable it should work, though your mileage may vary.