All items from Northern California Bankruptcy Lawyer

California taxpayers who lost their home to foreclosure or a short sale in 2013 got a last minute tax break when the legislature extended favorable tax treatment for forgiven mortgage debt.
The state law covers only sales or foreclosures occurring prior to January 1, 2014.  It mirrors but is less expansive than the federal law on  qualified mortgage indebtedness.
If the new break applies to you and you’ve filed your return, you can amend the return to claim its benefits.
The FTB supplies more details on AB 1393.
Bad news if you lost your home in 2014:  at present, neither state nor federal tax law for 2014 will exclude from income debt that was cancelled when you sold or lost your home to foreclosure.

Posted 1 week 1 day ago

256px-CalendarUncle Sam expects a quarterly tax payment from the self employed next week on the 15th.
Make this the last quarterly tax payment you pay.
Think I’m advocating tax resistance?  No way.
The tax collectors  have more weapons than you want to encounter.  It’s like the advice from the era of newspapers  not to pick a fight with someone who buys ink by the barrel;   Don’t spit in the face of the tax man.
Give up making them quarterly, I say.
Pay taxes monthly, just like every other recurring bill in your life.

Folks who get a paycheck have their income tax liability, or at least some estimate of that liability, deducted from each paycheck.  No fuss, and, well,  only some bother.
Their take home pay has already paid the taxes.  The paycheck is what is available to pay the bills.
Not so the self employed.
We are expected to make quarterly estimated tax payments in January, April, June, and September.

Posted 1 week 2 days ago

2283944200_e2ff311de4_zDonald Trump’s Atlantic City casino operation filed bankruptcy today.
Absent some huge and positive change in revenue, the Trump Taj Mahal will close in November.
What does that mean to ordinary folk here on the West Coast struggling with bills and the grind of staying afloat month to month?
Why does this bit of news show up on a site devoted to consumer and small business issues?
It’s this:  Trump’s empire is run by highly paid, highly educated business people, who, even backed by Trump’s name and draw, can’t make a go of this business.
That team of management professionals couldn’t keep the casino out of bankruptcy.
Then why is it that ordinary families agonize about filing bankruptcy?  Why do they think that it’s a blot on their honor or their intelligence when their finances get away from them?
Is it really smart to ignore the gravity of your financial situation and make minimum monthly payments forever?
You tell me.

Posted 1 week 4 days ago

Wedding_2The traditional marriage service ends with the charge that what God has joined together,  let no man put asunder.
That works with love, but not with money.
Financial partnerships are at least as challenging as marriages.  And business deals don’t have love to smooth the rough spots in the relationship.
Yet people pool their money in business, real estate, and investments without a thought to how the partnership will end.
Chances are, it will end, and that end can be very messy and miserably expensive.
My charge to those pairing up for an investment is this:
At the start of any venture involving pooling money, lay out some rules for how you part in the end.
Maybe, you’ll be content to be partners forever.

  • Your financial venture will be wildly successful.
  • Nothing in either life will change.
  • You’ll die simultaneously.
  • Your heirs will be in perfect agreement about what to do with the joint venture.

But I wouldn’t bet on it.

Posted 1 week 5 days ago

Time running out for bankruptcyYou face a crisis:  you’ve been served with a lawsuit;  judgment has been entered against you; or even, a garnishment has been served on your employer.
Has time run out? Have you’ve waited too long for bankruptcy to help?
While I don’t recommend procrastination, still,  at almost every stage of debt collection, bankruptcy can save your bacon, or at least what’s left of your bacon.
Served with a lawsuit
When a summons and complaint lands on your doorstep, the clock starts ticking on the time you have to file a written answer to the complaint.
Skip filing an answer and the outfit suing you wins whatever the complaint prays for.
Filing bankruptcy at this point stops the lawsuit in its tracks.  The automatic stay that comes, automatically(!), with the bankruptcy case forbids further action in that suit without express court permission.
Assuming the debt doesn’t involve dishonesty or family support, any liability you have on the debt is discharged at the end of your bankruptcy case.  End of story.

Posted 2 weeks 3 days ago

The New York Times’ great feature on the dark world of consumer debt collection had a marvelous flow chart of the progress of collecting an old bill.
Only it was deceptively wrong.
After following the debt collector’s options and outcomes from first collection call to the various resolutions, the graphic showed two wildly different outcomes if the consumer got sued.
One outcome had the consumer telling the judge, “I’ve fallen on hard times and can’t afford to pay my debt“.  Result:  the consumer loses.  Hard times isn’t a legal defense to a collection suit.
The second outcome had the consumer telling the judge:  “Make them prove I owe the money“.  Result, says the article:  the consumer wins!
Why the different results for different scripts?  Because, the debt buyer has no proof of the debt.  And the burden of proof in a collection suit lies with the person who filed the suit.

Posted 3 weeks 3 days ago

smoke and mirrors theilr cc
I can’t save anything because it takes every dollar I make just to get by.
Sound like a description of your budget?
For some folks, that is absolutely true.
But for another slice of working folks, there’s some black magic budgeting going on that hides what’s really afoot.
These voodoo budgets look rational, but only on the surface.  If there were two budget line items:  1) food, and 2) groceries,  you’d see the duplication.
But what often happens is more subtle.  Meet the twins of budget self deceptions.
Electronic entertainment
Got cable?  More than basic cable?  Do you also budget for entertainment, eating out, vacations?
What is premium cable if not entertainment?  You can probably say the same thing about data on smart phones.  These services make our days brighter.  But the cost has to be counted against the same budget category as other non essential pleasures.

Posted 4 weeks 2 days ago

This fake arrest warrant is wrong in so many ways.
Repeat after me: we don’t jail people for debt.
fake warrant
The post We Don’t Arrest People For Not Paying Debts appeared first on Northern California Bankruptcy Lawyer.

Posted 5 weeks 1 day ago

The division of the debts of a failed marriage, however carefully crafted at divorce, can be utterly destroyed if one of the former spouses files a Chapter 13 bankruptcy.
A Chapter 13 discharge is double barreled.  It will eliminate the debts that the filing spouse owes to creditors.  It also wipes out any obligation to the debtor’s former spouse to shield that spouse from those debts.
It gets worse:  any obligation of one party to pay the other to equalize the division of assets can be wiped out in a Chapter 13.  (Support debts survive; they aren’t dischargeable anywhere, any time.)
All parties, the divorcing spouses and their family law attorneys, need to consider the impact on the division of assets and liabilities if either spouse drops the bankruptcy bombshell.
Debts divided and protection promised
Where both spouses are liable on a debt, the divorce agreement often assigns the debt to one spouse and imposes on that spouse an obligation to indemnify the other spouse.

Posted 5 weeks 2 days ago

When you’re flat broke and thinking about bankruptcy, cheaper sure looks better.
If a lawyer will do your Chapter 7 for $600, what’s the point of paying $1000? Or even $2000?
Like answers to many legal questions, it depends.
Bankruptcy relief depends on your facts
Whether to file bankruptcy, or whether to file now, rather than later, depends on how the facts of your financial situation interact with bankruptcy law.
Your bankruptcy lawyer is charged with gathering those facts and analyzing them so that you get the most debt relief the system can offer.
If your bankruptcy lawyer doesn’t dig deep enough, or think broadly enough, you may hit avoidable snags in your case.
With the caveat that there is no direct and sure-fire connection between cost and quality, let’s talk about what it costs to escape from broke.
How to figure what you should pay
The cheapest guy in town isn’t for you.  Chances are, he’s new to the field.  He’s dabbling.  He’s hoping to sell you something else along with a bankruptcy, or he’s outsourced the real work to someone with less training than he has.

Posted 7 weeks 3 days ago