Los Angeles Bankruptcy Lawyers Blog

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

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