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

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

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

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

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

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

We have all read the headlines of murder-suicide by a family head facing financial difficulties in both Southern California and nationally in the past few years. There have been family murder-suicides in Yorba Linda, San Clemente, Porter Ranch, Covina and Wilimington. The Porter Ranch incident involved an unemployed financial analyst who shot his wife, three sons and his mother-in-law before killing himself last October. The recent stabbing deaths of two daughters in North Hollywood again highlights the recessive nature of the California economy and the housing crisis in driving family members to unthinkable crimes.

Fortunately, the US government established the Bankruptcy Code to help alleviate some of these extreme measures of coping with financial crisis. The Bankruptcy Code provides protection for family homes, cars and other items. If facing a financial crisis and have no money, you should still seek assistance from trained professionals. The US Court system provides a fee waiver program, and the Law Offices of Frazee/Laron stands ready to assist you.

-RoseAnn Frazee
Los Angeles Bankruptcy Attorney