Los Angeles Bankruptcy Lawyers Blog

For the first time in decades, governmental agencies are making "deep job cuts" as reported in the Daily News on July 4, 2010, distributed in Los Angeles. As also reported, public employees should brace themselves as the job cuts could worsen in the second half of the year. Not only are the government agencies cutting jobs but also reducing salaries.

With the reduced income, many families cannot meet their obligations which were based on a higher expected income. Bankruptcy provides relief for these families. A single gentlemen, in trying to raise three children, just filed for bankruptcy. In addition to income reduction, the children's mother had stopped making child support payments. So his income got reduced two-fold.

Fortunately, as we look at Independence Day, our US bankrutpcy laws provide independent relief for bankrupt families. By filing bankruptcy, you can again build your credit rating and start life anew. Without filing for bankruptcy, you are reminded daily by collection callers who harass you for payments you cannot make. Bankruptcy stops those calls dead in their tracks.

There are many provisions in bankruptcy law. You are wise to secure a bankrutpcy attorney who can assist you through the maze of bankruptcy law and procedures to save your home from foreclosure as well as other properties .

-RoseAnn Frazee
Pasadena and Los Angeles Bankruptcy Attorney

Subject to limited grounds for a waiver, individual debtors must also pay for and undergo statutorily-prescribed credit counseling WITHIN 180 days BEFORE filing for bankruptcy under Chapter 7, 11, 12 or 13. The counseling must be from a nonprofit credit counseling agency approved by the U.S. Trustee, but need not be in person (e.g., over the internet is okay). The agency must have outlined "opportunities for credit counseling" and assisted the individual in performing a related budget analysis. The purpose, of course, is to determine whether the debtor's financial problems can be solved by an out-of-bankruptcy payment plan. BEWARE of credit counseling agency who charge a percentage of payments made through the agency. Also,in addition to adding to your already incurred expenses, those plans are difficult to cancel once you start and cannot proceed. Quite often, the better plan is to file for bankruptcy.

However, the credit counseling MUST BE completed and certificate obtained before your petition in bankruptcy can be filed; otherwise, your bankruptcy will be dismissed without any debt relief.. Frazee/Laron attorneys counsel you on the proper steps for having your debts discharged in bankruptcy rather than your bankruptcy case dismissed without a discharge and you continue to be responsible for payments because the proper steps were not followed in bankruptcy.

-RoseAnn Frazee

The Daily News reports this morning that Obama's administration flagship effort falls short: one-third of the 1.24 million borrowers who have enrolled in the $75 billion loan modification program have dropped out. Therefore, the analysts speculate that the majority of borrowers will still wind up in foreclosure. In other words, a new wave of foreclosures is being predicted.
Further, the article states that even after the loans are modified, the borrowers are "simply stuck with too much debt -- from car loans to home equity loans to credit cards."
Nevertheless, the federal bankruptcy programs offer the borrowers more relief in being able to wipe away those home equity and credit card debts plus offer automatic stays on the foreclosure process.
Contact the Pasadena law firm to handle your debt relief needs!
--RoseAnn Frazee

Many people are unclear as to what the advantages are to filing Bankruptcy other than the fact that you don't have to pay back some of your debts. Well, that is certainly a big reason, but there are also several other reasons to consider filing Bankruptcy in Los Angeles, the San Gabriel Valley, and the greater Southern California area.

Filing Bankruptcy also puts a freeze on the creditor's collection efforts immediately by invoking the Automatic Stay. Furthermore, it prevents liens from being filed on your property by creditors.

In addition, filing Bankruptcy under certain Chapters can allow you to prevent a foreclosure of your home or even to strip away a second mortgage on a home that is "under water" in the aftermath of the housing collapse in Southern California.

Also, there are certain tax advantages to filing Bankruptcy in that a discharge of debts does not create a taxable event like a short sale or other negotiations with creditors. In other words, creditors will often take a loss and file that with the IRS for tax purposes, while the corresponding gain by the debtor can be taxed as if it was income rather than a forgiven debt. In Bankruptcy, this is not an issue.

Further, most debtors can totally exempt all of their assets through what are called exemptions, so that they not only get to remove all of their unsecured debt, they also get to keep all of their assets.

These are just some of the many advantages available to folks through Bankruptcy, not to mention the opportunity to gain a fresh start and emerge debt free at last. If you want to find out if this form of relief fits your particular situation, fee free to contact an experienced Pasadena Bankruptcy Attorney.

Kirk Laron
Pasadena Bankruptcy Attorney

Filing Bankruptcy in the San Gabriel Valley and other areas in Los Angeles is a process that is doable, but it is often difficult for most people to find out how much it actually costs. You have to remember that there is a difference between fees and costs. Costs are what an attorney pays out, and get nothing out of it personally. For example, if you want to file a Chapter 7 Bankruptcy, the cost of filing as of April, 2010 is $299. If you want to file a Chapter 13 Bankruptcy, the cost is $274.

So, what are some additional costs you can expect? Credit Counseling is a requirement of all inidividuals filing Bankruptcy. There are two parts to this requirement. First, you must do a Pre-Petition Counseling Session, which costs on-line anywhere from $15-$45. Secondly, after you file, and after you have a Creditor Meeting, you have to have another Counseling Session, which typically costs less, usually between $10-$25.

How about running a Credit Report? At the Law Offices of Frazee/ Laron, for about $40 we can actually order a Credit Report electronically and have it imported directly into your Bankruptcy Petition, which is a bonus for ensuring accuracy and completeness. Otherwise, a debtor can get their own as well.

Delivery to the Court can cost up to $100 or more with some services, not to mention costs involved in mailing various information to Creditors every time your case is changed. In our firm, we file electronically which reduces these costs and save the Bankuptcy filer more money.

Legal Fees vary even more. It really isn't fair to quote a "one price fits all" amount because cases very greatly in complexity and in the likelihood of a creditor getting involved to make things more difficult. However, as an experienced Bankruptcy Attorney in Pasadena, I can give you a fair price quote depending on your particular circumstances. With a free consultation, is obviously worth your time to come in and talk about how you can rid yourself of credit card debt, depressing home loans, medical bills, or divorce related costs.

Let us educate you and take you in the right direction.

Kirk Laron
Pasadena Bankruptcy Attorney

Clients in Los Angeles usually start their free Bankruptcy consultation with me with a story of their exhaustive attempts to modify a home loan only to find out just prior to approval that the "investors" do not approve of the modification after all. Many homeowners are offered a three month trial to attempt a new loan modification, and after two and a half months, are told their modification has not been approved. This is usually followed by a failed short sale, and then a foreclosure.

Bankruptcy is the only real solution if you want to keep your home and the lender is not "playing ball". Provided you have some income and your arrearages are not too great, a Chapter 13 Bankruptcy is the only real weapon a person has if they want to keep their home and want to stop enduring the pain of a failed short sale or a failed loan modification.

A Bankruptcy also gives a person more bargaining power with the lender. As long as a person is dutifully making a Plan Payment in Chapter 13 and making the mortgage payment from that point forward, a lender cannot take that person's home. There is another advantage of filing a Chapter 13 Bankruptcy. If a person sticks to the Plan, they can remove any personal liability on the home if the lender later takes the house through foreclosure due to lack of payment. If you have a second loan or a refinanced loan, a homeowner is typically personally liable for any deficiency balance between what the home is sold for at a foreclosure auction and what the person owes on the loan. A Bankruptcy removes that personal liability so a lender has less leverage over that homeowner and may be more inclined to actually modify a new home loan.

By removing personal liability through Bankruptcy, a homeowner puts themself in a better bargaining position with a lender, since a home that is "under water" is not a good foreclosure candidate when there is no personal liability to help cover the lender's loss. If you are looking for a Los Angeles Bankruptcy Attorney who may also be able to strip away your Second Home Loan in addition to the securing the aforementioned advantages, give us a call.

Your ability to effectively negotiate with the Banks is only a phone call away.

Kirk Laron
Pasadena Bankruptcy Attorney

A Chapter 13 Bankruptcy can allow Los Angeles residents as well as other Americans to pay a fixed payment over time so they can save their home from foreclosure in many circumstances. At times, however, when the delinquent amount owed on a home, known as Arrearages are too great, the plan become unaffordable when only the future income of the person is considered.

Fortunately, payments to the plan can come from several sources. In other words, not all payments to creditors must be made from the debtor's future income. The debtor may choose to fund payments from exempt property, from property of the estate, or from a Contribution from another person.

Many assets that a person has would be exempt from creditors if they declared a Chapter 7 liquidation Bankruptcy. Any of those assets could in theory be used to pay for the plan payments. Also, another person can sign a Declaration pledging them to pay a portion of the debtor's payment. This can often make the difference of a successful Chapter 13 Plan and one that a debtor cannot afford. This becomes an analysis that an experienced Bankruptcy Attorney in Los Angeles can provide as these alternatives can pave the way to getting out of debt and keeping your home, even if it days away from foreclosure.

Through a free consultation, the possibility of saving your home and getting relief is just a phone call away

Kirk Laron
Pasadena Bankruptcy Attorney

On January 1, 2010 homestead exemptions rose to $75,000 and $100,000 of home equity for single and married debtors declaring Bankruptcy. In places like Los Angeles and Pasadena, this can be critical because protecting whatever equity may be left in your home could be important in determining whether Bankrtupcy Protection is worthwhile. Protecting as much equity as possible becomes a key variable for any person considering Bankruptcy in Southern California, and as of the beginning of the year, Angelinos just gained a little more protection.

However, recording a judgment lien against real property "freezes" the amount of the homestead exemption the person can claim under California's nonbrankruptcy exemptions. Moreover, any subsequent statutory increase in the exemption amount does not apply to the judgment lien creditor. This means that despite this generous increase, if you already have a judgment against your home, the added protection does not apply that particular debtor.

This is just one example of why a Pasadena Bankruptcy Attorney is important to have when considering filing Bankruptcy when you own a home. I will help you protect what assets you have and to maximize your protections under the law.

Kirk Laron
Pasadena Bankruptcy Lawyer

Minimal research of Chapter 13 Bankruptcies in Pasadena will reveal that the main advantage of this option is to save your home from pending foreclosure. However, with an appraisal of your home, you may be able to strip away your second lien ("lienstripping) as long as the following is true:

Your home value must be below the value of your first lien. In other words, if the home is sold, only the first lien holder would get paid because there is nothing left for the second lien holder.

In this case, one can totally strip away the second and convert it into unsecured status, which gets treated like a credit card. If you can successfully maintain your payment plan in a chapter 13 throughout the payment period (3 to 5 years), then any remaining unsecured debt is wiped away. You can emerge with a fresh start, and a home that no longer has a second mortgage on it.

If you have a job, want to keep your home, but are having trouble making ends meet, give us a call or e-mail and we will guide you through this process and see if a Chapter 13 Bankruptcy can be the right solution for you.

Kirk Laron
Pasadena Bankruptcy Attorney

Recently, I was asked as a practicing Pasadena Bankruptcy Attorney why someone can't just do it themselves. I love questions like this because it really allows me to highlight the headaches that people are in store for, and the value that Bankruptcy Lawyers can bring, even in a simple Chapter 7 Bankruptcy filing.

First of all, filing a petition electronically is the way to go, which can only be done by an Attorney. With numerous filing deadlines, I can file from my office at 11:59 PM and still have it accepted as if it was filed during the day. There are several papers that are required, they must be filed in a certain order and in a certain manner, depending on the area of Los Angeles you are filing. The average person would have no clue about these issues and you aren't going to read about them in Court Publications or a website. Furthermore, every US Trustee is different and knowing their preferences is key to avoiding scrutiny to your case. An individual or bankruptcy preparer simply doesn't meet with the Trustees in order to know this information like a Bankruptcy Attorney would.

In addition, an improperly filed petition is routinely dismissed as the Court simply does not have the manpower and patience to correct mistakes, nor is it really their job in the first place. A dismissal requires another filing fee, and starting all over again. If things are not corrected the second time around another dismissal could result in a Bar from filing for 180 days. Given the fact, that most debtors are being relieved of anywhere from $20,000 to $250,000 on average, the price of a Bankruptcy Attorney is a wise investment when you consider the benefits and the opportunity for a fresh start.

At the Law Offices of Frazee/ Laron our legal fees start at $999. We have saved people's homes from foreclosure hours before a scheduled sale, we have wiped out mountains of debts on hard working people who have lost their jobs or are among the underemployed, and we have allowed people to find solutions after failed loan modifications and failed short sales. Give us a call if you are ready for actual solutions rather than empty promises that waste your time.

Kirk Laron
Pasadena Bankruptcy Attorney

A recent Los Angeles Bankruptcy Judge made mention to me of the fact that if you have filed Bankruptcy as an Individual and you have unsecured debts over 100K, you will be looked at far more carefully than if you file as a business. It seems that a Business is presumed to be capable of running up far higher debts than an individual and still remain "responsible" under the scrutiny of Bankruptcy Courts. Many business owners know that Bankruptcy is inevitable, but are unsure whether they should file as individuals or as a business, especially if they have personal guarantees on their debts or they are a sole propietorship.

As an individual, another difficulty in filing a Chapter 7 Liquidation Bankruptcy is that you have to pass the means test, which will hold you to not being over the median income for your State in order to qualify for a complete discharge under Chapter 7. However, if you claim that more than half of your debts are for business purposes the Means Test is assumed to be passed. This is just one of the many subtleties that an experienced Bankruptcy Attorney can provide to those thinking about declaring Bankruptcy that own a business.

If you are unsure whether to file a Bankruptcy, and if you should file as an individual or as a business, contact the Law Offices of Frazee/ Laron for a free consultation. A fresh start is just a phone call away.

Kirk Laron
Los Angeles Bankruptcy Attorney

A recent article from the Associated Press revealed that Americans now have triple the amount of debt compared to 1982. Further, their savings rates are half of what they were back then. Finally, temporary jobs are less plentiful, resulting in people spending 10 more weeks off the job on average than back in 1982. When you combine these ill effects with the realization that workers often have less benefits such as health insurance, one can see how a job loss or medical problem can quickly bring someone living in a high priced state like California into a foreclosure or bankruptcy.

The Law Offices of Frazee/ Laron continue to help people get a fresh start by taking full advantage of Bankruptcy Protection that caters to each individual situation. If you own a home that no longer has equity, but you want to remain in it, a Chapter 13 Plan may allow you to stay and avoid foreclosure provided you have some income. Otherwise, a Chapter 7 can strip away credit card debt and allow you to protect some vital assets so you can emerge debt free and get out from under the interest and late fee charges that are consuming you.

Give us a call and you will get a free consultation to see if Bankruptcy is the right decision for you. Do not be paralyzed by fear, let us pull you from the depths of financial despair so you can get back on the right path.

-Kirk Laron
Pasadena Bankruptcy Attorney

Some people in Los Angeles are right now wondering if they should declare Bankruptcy due to financial desperation. So, what can Bankruptcy do for you and what's it going to cost you?

1. A Chapter 7 Bankruptcy can eliminate all of your credit card debts. However, if you have assets that go beyond your maximum exemption limits, the Bankruptcy Trustee can force you to sell your assets that go beyond your exemptions in order to pay off your credit cards.

2. A Chapter 13 Bankruptcy can help you avoid losing your home. However, you must be able to afford making plan payments from 3 to 5 years, and keep making your present mortgage payments.

3. A Chapter 11 Bankruptcy can actually be used for individuals that do not even have a business if their debt load goes beyond maximum amounts under a Chapter 13 filing.

4. A Bankruptcy does not allow you to pick and choose which debts and assets you wish to disclose. It is an "all or nothing" proposition.

5. A Chapter 7 Bankruptcy can actually allow you to avoid some of your tax debts, provided they are over three years old and you have a current payment plan with the tax agency.

The downside is that your credit will be affected. However, there is a good chance your credit has already been beaten down as you have fallen into this financial crisis. After your Bankruptcy is discharged, credit companies will be salivating over the opportunity to lend money to a person who cannot declare Bankruptcy again for at least another eight years.

If you think more deeply about these issues, many questions come to mind that are unique to you. As a Pasadena Bankruptcy Lawyer, I can demystify the subtleties of the Bankruptcy Laws so that you can maximize your relief and minimize your stress and anxiety over what is sure to be a difficult decision.

Kirk Laron
Pasadena Bankruptcy Lawyer

Most of us will remember the effort the Obama administration made in March and April 2009 to pass legislation permitting Bankruptcy Judges to modify or "cramdown" a mortgage to the present value of the homeowner's real estate. The legislation passed the House but was defeated in the Senate. Now, Congressman Barney Frank wants to give "cramdown legislation" another shot. The legislation would benefit homeowners whose homes are "underwater," i.e., of lesser value than the mortgage on the home, by cramming down the mortgage to the present value.

Another term getting a lot of press and a similar effect is "lienstripping" in bankruptcy. "Lienstripping" is bankruptcy jargon referring to a debtor's ability to reduce an undersecured creditor's claim to the present value of its collateral through claim valuation., Lienstripping has the effect of dividing an undersecured creditor's claim into secured and unsecured portions: The unsecured portion of the lien is "stripped" from the collateral and the deficiency between the total debt owed and the collateral's present value becomes an unsecured claim. The lien on the collateral remains only in the amount of the "secured" claim. Unfortunately, this process is limited to the reorganization cases, i.e., Chapter 11 (debtors whose debt amounts to over $1,010,050) and Chapter 13 cases and cannot be applied to the first mortgage of a debtor's principal residence (cramdown legislation would permit this extension) on the first mortgage. However, lienstripping can apply to a "junior lien" (second or third mortgage) on a principal residence. For example, Creditor 1 has a $200,000 claim on the principal resident and Creditor 2 has a $100,000 claim on the same home for a total of $300,000 and the home is only worth $160,000. By bifurcating the secured and unsecured claims, the Creditor 2's claim becomes unsecured and can be eliminated from the debtor's repayment plan.

Lienstripping applies to real estate, automobiles, boats, airplanes and other items. With exceptions and limitations, this process becomes quite complex and you should have bankruptcy attorneys such as Frazee/Laron handle these procedures for you.

--RoseAnn Frazee--
Los Angeles Bankruptcy Attorney

If you are a Los Angeles resident contemplating Bankruptcy but are having feelings of shame or guilt, rethink those feelings as they are likely misplaced and you are being too hard on yourself. A recent article in USA Today demonstrated just how obvious Bankruptcy filings have directly followed Foreclosures linked to the Housing Crisis. Nevada now has the most filings in the United States, and the fact that the state is home to the highest foreclosure rates is no accident. The days of Bankruptcy being reserved for the irresponsible are officially over. Fortunately, an individual has some choices, and can file a Chapter 7, Chapter 13, and even a Chapter 11 to keep assets and get a new lease on life.

If you are contemplating Bankruptcy because your finances are out of control, it is likely because of a job loss or cut in hours, a serious medical problem or illness that has happened to someone who is no longer employed with health insurance, or a person who was taken by an exotic loan that ballooned out of control when the teaser period ended and can't sell the house for even half of what they bought it for.

Remember, a Bankruptcy can actually save your home if you can file a Chapter 13 Bankruptcy, or you can still keep your home under a Chapter 7 if your equity has fallen dramatically (which includes just about everyone in Los Angeles) as long as you keep up your payments. However, this choice is a serious one that needs professional attention. As a Los Angeles Bankruptcy Attorney, I can evaluate your particular situation and develop the smartest way to handle a difficult financial crisis. Take action, get the help you need, and look forward to a new beginning where you don't have to wallow in the financial misery that has swallowed literally millions of Americans.

Kirk Laron
Los Angeles Bankruptcy Attorney