All items from Northern California Bankruptcy Lawyer

pickpocketThe right of your bank to take your money when you aren’t looking stops at your credit card.
Your bank may be entitled by common law to setoff what it owes you from what you owe it on the garden variety debt.
But the federal Fair Credit Billing Act  forbids a bank who has issued you a credit card from helping itself to your funds at the bank to pay the credit card.
How bank accounts work
When you deposit money at your bank or credit union, the bank doesn’t really tuck your money away in the vault til you need it.
It makes an entry in its books that it owes you the money.
The deposit creates a debt from the bank to you, the depositor.
When debts run both ways
If you borrow money from the bank on a HELOC or personal loan, you now owe the bank a debt.
Common law allows the off set (or setoff) of one debt against the other, when the parties owe each other.
If you don’t make the payment on your debt to the bank, the bank can reduce the debt it owes you by the delinquent payment.
That’s a setoff.



Posted 1 day 14 hours ago

Don't gag mortgage servicersLists of stupid laws are lots of fun, when they don’t really touch your life.
But the law that gags secured lenders after bankruptcy isn’t funny.
Preventing lenders from sending mortgage statements to homeowners after bankruptcy just sets families up for foreclosure and rewards servicers with the fees that follow default.
It’s just a stupid result that no one has fixed.
Bankruptcy laws collide
Two clients this week weren’t laughing when two different bankruptcy laws collided:
One law says that the lender’s lien on your home remains enforceable after bankruptcy.
The second law prohibits efforts to collect a debt after bankruptcy.
The survival of the lien after bankruptcy protects the secured lender;  the injunction against post bankruptcy collection protects the debtor.
But what if the debtor wants, and needs, to continuing paying?  The intersection of these two provisions thwarts both.
In one case of mine, Bank of America “service reps”  refused to tell a Chapter 13 debtor how much she had to pay to bring her mortgage current.



Posted 1 week 1 day ago

Counting the days in bankruptcy preference ruleMost folks considering bankruptcy know about the 90 day rule in bankruptcy
They’ve talked to friends or read on the internet. 
When they get to a bankruptcy lawyer’s office, they’re eager to tell me they know about the rule, though sometimes they have questions about just how it works.

  • Some think the rule is one prohibiting paying  any bills during the run up to bankruptcy.
  • Others think it is a rule against buying anything.
  • Some are simply unclear how it works.

Which is all very interesting, except that there is no 90 day rule.
Or at least, no rule that makes any difference to debtors.
90 day rule affects creditors
The only bankruptcy rule with a 90 day scope is a rule that allows a bankruptcy trustee to recover money from creditors.



Posted 1 week 5 days ago

super_hero_flyingCalifornia’s homestead exemption is the Super Hero of the exemption world.
While other exemptions protect things worth a thousand dollars here and a couple of thousand there, the homestead protects $75,000 for a single person and $100,000 for a couple.
For the elderly or disabled, the homestead balloons to $175,000.
The homestead may be powerful and famous but often not well understood.
Here are six things you probably didn’t know about the homestead.
Homestead superior to a judgment creditor
Homesteads protect homeowners from a particular kind of creditor- the judgment creditor.  A judgment results from a lawsuit and the determination that you owe the plaintiff who brought the action a certain amount of money.
The judgment entitles the judgment creditor to use certain legal powers of the state to collect that money.  That right to collect is limited by the judgment debtor’s homestead rights.
The homestead exemption was designed to assure judgment debtors of a place to live, even if they owed money to creditors.



Posted 2 weeks 15 hours ago

3713942772_39deeab9cf_zIf the mortgage company provides your property insurance, you are not in good hands.
No matter how much time it saves you.
Your lender is not a good neighbor when it comes to insurance.
When your insurance lapses
Somehow my client let her homeowners insurance lapse.  She wasn’t worried about it, she told me, because the mortgage lender had gotten insurance on her home.
She was content she said to let the lender take care of that complication in her life.
Only the complication wasn’t being “taken care of” because the lender’s force-placed insurance didn’t protect my client or her interest in her home.
Lender protects only themselves
Normally, you pick out an insurance carrier to insure your home and the risks that property owners have.
Your mortgage requires that you insure the property and name the lender as an additional insured.  That way, if the house which is part of the collateral for the loan burns down, the lender gets all or part of the insurance proceeds to make up for the loss of the structure.



Posted 3 weeks 1 day ago

341 notice annotated_Page_1You’re looking at bankruptcy official form B9.
It arrived in your mail because someone has filed bankruptcy and listed you on the schedules of a newly filed bankruptcy case.
Most likely, the debtor owes you money or you have an open claim of some sort against the bankrupt.
Your rights against the debtor have just changed.
Bankruptcy law, federal law, is now prepared to upend the debtor/creditor relationship.
You need to find all the information crammed into this single page so you can determine what, if anything, to do next. (Double click the image and you’ll get an enlarged version; hit the back arrow to come back here.)
1.  Who’s filed bankruptcy?
The name of the person  who filed the bankruptcy case and their mailing address is number 1 on our notice.  Any fictitious business names or prior names would appear here as well.



Posted 3 weeks 6 days ago

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Getting immediate protection from your creditors heads the list of goals for most bankruptcy filers.
But, if this isn’t your first bankruptcy case, do you get that protection?
What the automatic stay does

The Automatic Stay (or “Stay”) protects the bankrupt consumer from continuing collection actions by his or her creditors.  All creditors are required to cease all actions intended to collect a pre-petition debt from the Debtor.   See 11 United States Code section 362.
The stay  (1) halts a foreclosure sale, (2) stops and eviction, (3) stops an ongoing lawsuit, and (4) gives the Debtor some ‘breathing room’ and allows them to reorganize their financial affairs while under the protection of the bankruptcy court.



Posted 4 weeks 2 days ago

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Got private student loans?
I’ve got good news and bad news.
Bad news first.
Private Student Loans Inflexible
Private student loans have no built in mechanisms for deferment and forbearances, like government-backed loans do.
There are no income based repayment plans, as there are with federal student loans.’  No “outs” for disability or schools that close and leave you stranded.
No discharge in bankruptcy.
So, regardless of what life hands you, you have to pay according to the terms of the note.
But I promised you some good news.
Private Student Loans Must Play By The Rules
The promising news is that private student loans are hardy different in the eyes of the law than credit cards.  That makes them subject to all the rules about collection that apply to any other debt.
One of those rules is timeliness.  Lawyers call it the statute of limitations.
The rule essentially says that a creditor who isn’t being paid must sue within a fixed period, or lose the right to use the courts to enforce its debt.



Posted 4 weeks 5 days ago

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I thought the lien stripping ship had sailed.
We are finally climbing out of the worst of the Great Recession and California real estate values are recovering.
Turns out, I was wrong.
It’s not too late to reduce your mortgage debt by tens, or even hundreds of thousands of dollars, if you live where real estate prices are recovering slowly.
It doesn’t require a loan modification, a cooperative lender or a government program.
It requires only the right mix of property values and junior mortgages, and a willingness to file Chapter 13.
Chapter 13 bankruptcy permits a homeowner whose first mortgage and any delinquent property taxes total more than the property’s value to eliminate any HELOC or junior mortgage.



Posted 6 weeks 16 hours ago

watch out for fraud
One of the hazards in today’s society is becoming the victim of credit card fraud. It can happen in many ways.
Here are six all-too-successful scams identified by the banking industry:
Phony Data Breach 
You get a text message, claiming to be from your credit card company, alerting you that your card is blocked because of fraudulent activity following a data breach. The text asks you to call a phone number to verify your account information.
Be skeptical of these messages, especially if they request credit or debit card data or personal information like your name, address and social security number, or ask you to link to another website or Web page.
Your credit company does not need to ask you to verify information- they already have it.
Mail Fraud
You get an official looking letter from your credit card company asking you to provide your account number or other personal information in a reply envelope or by dialing a number.
Don’t respond.



Posted 6 weeks 1 day ago