Chapter 7 Bankruptcy – To File or Not to File

There are many life changes that can lead to bankruptcy, job loss, health problems, divorce and small business failures to name just a few. Bankruptcy is meant to provide protection to those who are so inundated in debt that it is near impossible to get out from under it. First and foremost, Bankruptcy is neither something that should be dismissed or avoided without proper knowledge of its benefits. It’s important to get rid of the usual stigma that is felt when considering Bankruptcy; when it comes down to the grand scheme of things, Bankruptcy can end up helping you improve your credit and keep your financial and personal reputation intact. It’s important to consider what the actual effect of Bankruptcy is to you personally as well as the benefits from it. Bankruptcy protection is afforded to us by the government for a reason, it should never be dismissed merely based on social stigma but should be embraced for the benefits it provides to those who really need it. There are various different types of bankruptcy including some chapters which limit the amount of debt a debtor may discharge.

What can I expect when filing for Bankruptcy?

Prior to filing your Bankruptcy petition, you are required to complete a pre-filing counseling course and receive a certificate of completion. This requirement merely involves either internet data entry and/or an over the phone conversation with a counselor regarding your situation. Upon completion (approx 1 hour) you are provided with a debt counseling certificate. Put simply, filing a petition for Bankruptcy is a request for Bankruptcy protection under federal law. A lot of different things take place upon the filing of the petition, one of which is called the “Automatic Stay”. The automatic stay is essentially a federal court order which requires your creditors to stop all collection efforts. This means that creditors cannot contact you in any way; they cannot sue you, garnish your wages or take any other actions to collect against a debt. It is important to note that there are exceptions to the stay, namely for debtors involved in eviction proceedings among other things. For the average consumer with only credit card debt, the automatic stay is a cover all protecting your against any kind of collection actions taken against you. This can be enormously helpful to the person who is hounded day and night by creditors, sometimes border lining harassment.

When filing for Bankruptcy, you are also placing your property in the hands of the court and a court appointed trustee. You are not supposed to transfer property or make payments to your creditors within 30 days preceding your Bankruptcy filing or at any time during your bankruptcy proceeding. The trustee’s job is to determine whether you own property that can be sold to pay off some of your creditors. Most consumers are able to exempt all of their personal property under state or federal law, so that the majority of cases go through without the sale of any assets. The trustee also is allowed to investigate any financial transactions you might have made immediately preceding the case, so it is important to follow the rule of full disclosure during bankruptcy proceedings; when you disclose everything specifically in your case, this generally leaves nothing to be of concern for the trustee.

At the culmination of your bankruptcy case, the bankruptcy court holds what is called a “341 meeting” which is really just an informal hearing to wrap up your affairs in bankruptcy court. The 341 meeting allows creditors or any other interested parties to object to the discharge of your case, it also allows the trustee to cover any areas of concern or ask you more specific questions regarding possible ambiguities in your bankruptcy paperwork. Realistically, the majority of all 341 meetings go without a hitch, at most the trustee may have more specific questions for you, but in my 5 years of experience as a paralegal working with bankruptcy clients, a creditor has never made an objection to the discharge of a client’s case. Again (and I can’t stress this enough) the 341 meeting often becomes the place where inconsistencies in your paperwork take center stage, it is very important to be up front with the person who is preparing your bankruptcy paperwork; a good rule of thumb is to mention more than is necessary, in which case you will make sure that you are exercising full disclosure.

What are the effects of filing for Bankruptcy?

You generally only hear about the negative effects of Bankruptcy, needless to say there are good things that come about with the filing of a Bankruptcy. Relief from your debt and protection from your creditors, these are the two primary benefits that filing for Bankruptcy provides. As discussed earlier; generally, creditors cannot so much as contact you once you have filed for Bankruptcy, open court cases against you must be dismissed or stayed and best of all, you won’t have thirty two different messages from Kelly the debt collector. Relief is music to the ears of anyone who has had to deal with smothering and debilitating debt problems. Thousands of dollars a month can be spent paying your creditors, sometimes just to cover the interest they’re charging you; Bankruptcy can provide you the much needed relief necessary to have that money you need for the necessities of life, for your family, for you. It goes without saying that Bankruptcy has its negative effects along with its positives, although contrary to popular belief, the negatives aren’t AS negative as many would have you think. One negative effect of Bankruptcy is its impact on your credit score, generally it can lower your score by approximately (200) two hundred points. Bankruptcy also remains on your credit for at least (10) ten years. Both of these will affect your ability to obtain credit, or at least good deals on credit. This is not to say that you cannot obtain credit; on the contrary, creditors will often offer and approve you for credit within (12) twelve months succeeding the discharge of your Bankruptcy case, this is due to the fact that you cannot then file Bankruptcy again for at least (7) seven years, guaranteeing them at least the principal and often times interest on any loan they make to you.

In Conclusion…

It’s important to keep in mind those banks and credit card companies are merchants, they do business; and they do business to make money. Look out for yourself; don’t ever feel that it is disgraceful to file for Bankruptcy. It is merely a way to start over, to take advantage of relief and protection and to come out on the other end a better, debt free person.

Please keep in mind that this post is not meant to be a substitute for competent legal advice or representation, each situation is genuinely different and we cannot guarantee any results. Our company offers Bankruptcy filings in conjunction with bankruptcy attorneys and at affordable rates, contact us today for assistance with  your collection efforts and/or claims of exemptions.

 

-DFG

The Two Sides of a Judgment

It is more likely than not that most of you reading this have been involved with a lawsuit one way or another, either as a litigant or maybe a witness. Some of you may have even had some experience with having obtained a judgment, either in your favor or against you. The truth about judgments is they are only as valuable as the paper they’re printed on…until they are collected. This post will relate mainly to civil and small claims judgment, although judgments in Probate and Divorce court generally are very similar and can often times require the same collection efforts until a judgment is satisfied.

The Plaintiffs Judgment

At the end of a lawsuit, a prevailing Plaintiff will have a judgment. A judgment may involve money, property and specific performance. Most judgments include an award of money as restitution for damages. A Plaintiff with a judgment must do two things, the first one being to wait. A prevailing Plaintiff must wait at least 30 days to allow the Defendant to pay the Plaintiff as well as to allow time for the Defendant to appeal the decision if they choose to do so. Once this waiting period is over, the Plaintiff may then take steps towards collecting on his judgment. Many people have the misconception that a judgment must be paid immediately by a Defendant; this is in fact, incorrect. You may never collect on a judgment, although there are various ways of making sure a Defendant understands that paying you is in their best interest.

Collection Methods:

A first priority in collecting judgments is to secure your interest in the Defendant’s money and property. A good way to do this is to file an abstract of judgment with the court as well as the county recorder. The abstract acts as a lien against any property the Defendant owns in the county. For instance, if the Defendant owns a home in Los Angeles County, a properly filed abstract will place a lien on the property which must be removed if the Defendant wishes to sell the home and which otherwise acts to put a cloud on the title of the property. The beginning of any collections attempts requires that you have a valid address for the Defendant (there may also be situations where a once good address is now bad). It is always smart to start off with a public records search or skip trace, which will help you obtain or verify a Defendants current residential and business address. A court judgment authorizes you to do many things (as long as they are lawful). For instance, if you have a check that was made out to you in the past by the Defendant you may already hold the key to collecting your money. A writ of execution is a signed court document that can be served on a Defendant’s banking institution to levy the  funds necessary to satisfy a judgment; a writ coupled with correct banking account information may very well get you paid up front.

Although you may not know the banking information of a Defendant, you might know where they are employed. In this case you can file a document called a earnings assignment order which is served upon the Defendant’s employer. The order requires the employer to take a percentage of the Defendant’s wages and turn them over to you until the judgment is satisfied. This is an effective collection vehicle as it generally insures that you will get paid, since most people cannot afford to quit their jobs over a wage garnishment.

What if you don’t have the Defendants banking information, or their employment information? Then you have to obtain information on their assets in a different manner. An Order to Appear instructs a Defendant to appear before a judge to provide information regarding bank accounts, personal property, real property, automobiles and any other items of value that you can collect to satisfy the judgment. The penalty for not appearing when ordered to do so is the issuance of a bench warrant, so Defendants would be ill advised to avoid these hearings. After a hearing on assets is held for a Defendant, you may have many different items of property to collect on. For instance an automobile can be sold pursuant to a writ of possession which directs the sheriff to seize and sell the Defendants automobile to satisfy your judgment. The same can be done with real property, although the process of seizing and selling this kind of property is more time consuming and costly. On a side note, an order to appear can also be used to instruct a third party who has information about the Defendant’s assets to testify about their specifics.

Last but not least, judgments against businesses. If you have a judgment against a business, a properly drafted lien document filed with the Secretary of State can put a lien on a business’ personal and other business assets. A retail or store front business can also be the focus of a large amount of daily sales, in which case a till tap can be useful. A till tap is an order allowing a sheriff to monitor the income of a business on a daily basis and levy a percentage of this income to satisfy your judgment. A rental business such as a management company may generate a large amount of income through rents. An Order Assigning Rents can instruct a building’s landlord to assign rents received to you to satisfy your judgment.

The Defendant’s Judgment

If you are a Defendant, you know from reading the above information that a Plaintiff can make your life a living hell until you pay them; so what are your options? One option is to pay up, although this in and of itself gives you a few options. Sometimes the court can allow a Defendant to make payments directly to the court over a period of time, this is only done upon request and in certain circumstances. What about the situation where a Plaintiff has sent a sheriff to levy money from your bank account? Don’t worry, there is a particular procedure to this kind of collection.

When you are the Judgment Debtor:

If a writ of execution is served on your bank, you will know about it. A bank must give you at least 15 days notice that a writ of execution has been served on them in relation to your account(s). This period of time allows you to file what is called a claim of exemption. A claim of exemption tells the court that you are electing all or a certain amount of your money exempt from collection. The exemptions include retirement funds, a certain amount of your wages, etc. It is very important to act quickly when you are notified of a writ being served on your bank, filing a claim of exemption will generally trigger a court hearing which can further put off collection against you. Even in a situation where you don’t qualify for an exemption, you may still ask the court to determine a certain amount exempt based upon what is necessary for you to sustain yourself in everyday life. Again, this requires a hearing and will postpone any money being levied from your accounts.

What about an earnings assignment order that is served upon your employer? This again requires you to be notified of the order and gives you an opportunity to file a claim for exemption, based either on an actual exemption, or your necessary income to sustain yourself. Liens are a different story altogether and cannot be removed when based upon a valid judgment. Some possibilities include making payments to the Plaintiff over time or some other viable arrangement. An important thing to keep in mind as a Defendant who has a judgment against them: all judgments accrue interest at the current legal rate of 10%!! This is a big deal and should be considered, a substantial judgment can rack up a large amount of interest the longer you let it slide.

In conclusion, there are two very different sides to judgments. Both sides offer options to either party, and it is important to both to consider these options and obtain help in drafting and filing the forms necessary to further your interest, whether it be as the Plaintiff or the Defendant. It is important to note that these rules apply to California and each state is different and may have differing rules. Please also keep in mind that this post is not meant to be a substitute for competent legal advice or representation. Our company offers attorney assisted document preparation at affordable rates, contact us today for assistance with  your collection efforts and/or claims of exemptions.

 

-DFG

Do It Yourself…or Screw It Up Yourself?

We all have choices to make in this world. In fact, we make our very first choice when we get up in the morning; we choose to go to work or school, we even sometimes choose not to get out of bed in the morning all together. It’s only fitting that we have the choice to represent ourselves in legal matters. There are various choices we have other than to spend thousands of dollars on a high priced attorney.

The right to represent yourself in legal matters gives you the freedom to draft your own legal documents, appear in court and do many other things an attorney would usually do for you. Now this doesn’t necessarily mean its advisable to go it completely alone. That’s where legal document assistants can really help out. Unless you yourself are an attorney or otherwise legally knowledgeable, odds are you will not know the method of preparing your own legal documents, along with the court rules, procedures and filing deadlines. As a Paralegal and Legal Document Assistant, I have encountered at least a hundred situations where clients started off a case or otherwise by preparing their own documents, incorrectly; chaos then ensues and typically knowing what to do next becomes an even harder endeavor. Hiring a legal document assistant to assist you in preparing legal forms, filing them and even serving them will avoid all of the problems that come with mistakes made when going it all alone. Representing yourself doesn’t mean you have to go through your legal transactions without assistance, this is where the help of a legal document assistant is both an affordable and wise investment.

-DFG

Court Lines

So it’s Friday morning and I’m standing in line at the Torrance Superior Court; one of the few courthouses I might add that offers free parking, but that’s neither here nor there. It’s difficult to describe the atmosphere at the criminal courthouses in our State of California, the air is always thick with high tensions and desperate people. You can see the terrified faces waiting to be bussed off to County Jail and you can distinguish the seemingly hardened (or acting the part at least) criminals who seem to stick their nose up in the air at the law.

I’ve had the displeasure of actually sitting in on and witnessing our criminal justice system at work. The judge palms along her paperwork, sifting through the soon to be arraigned defendants like numbers in a statistic or cattle being chosen for slaughter. The process is cold, fast and unforgiving. Oh you had to work today?  ” Too bad”. Deal with it, the judge will tell you. I can’t forget to mention the great confidence you receive from the Public Defender you’re assigned to, as they introduce themselves and ask you “what do you think about the case?”; who went to law school again? Unfortunately those among us without funds to hire private counsel will be stuck with an often times overworked, undertrained attorney; one who can often times be the only person determining wether you leave that courthouse a free man.

As I look around me now, at the frightened faces, the confident career criminal, and the first year Assistant DA; I can’t help but feel sad for this “justice system” that is supposed to protect ‘our’ rights.

-DFG

Mother and daughter awarded almost $3.8 million after bee attack

Premises Liability – Los Angeles County
Mother and daughter awarded almost $3.8 million after bee attack

A jury awarded $3,767,167 to a mother and daughter who were struck by a falling tree limb. On July 20, 2004, Emilia Martinez, then 46, and Esmeralda Martinez, then age 6, were sitting on the front lawn of their Canoga Park apartment complex. A large tree limb snapped about 20 feet above their heads and landed on their legs, while about 20,000 bees left a dry rot cavity at the base of the limb. Some of them attacked the plaintiffs, who also claimed severe leg injuries. Martinez and her daughter accused the apartment complex’s owner of negligent maintenance of a dangerous condition and lack of notice. The defendants contended that they had neither actual nor constructive notice of the dangerous condition prior to the accident.

Martinez v. Gantz

Welcome to 2010

So here we are ladies and gentleman, the year 2010. The year that at one point was not supposed to exist, according to the mythos behind Y2k. We’re not completely out of danger yet though…apparently, according to John Cusack and the wonderfully annoying movie, 2012 is another year in which we will all meet our demise. Oh well, might as well enjoy the time we have together right?

So whats the year looking like for you? I’d really like to know if you feel like commenting. I will be rather busy with work at the office and my attempts to put the marketing and advertising ideas I’ve been mulling over into action. This is a great time to start a business, as the economy seems to be pulling out of the so called “recession” and today even was a great day for the stock market as the DOW and S&P saw great gains. Let’s talk a bit about starting up a business:

STARTING A BUSINESS IN 2010

What exactly can we look forward to as we prospect to start new business in 2010? Some things will be positive, such as establishing yourself in markets that are moving up this year, such as technology and health/fitness. A negative aspect is the lack of good funding, it has become nearly impossible for a new startup business to get a bank loan; the banks are just more cautious due to the economy. There are alternatives to bank funding. I particularly self-funded my business by establishing a personal line of credit. I’m not going to lie, i’ve had help from the family in tough times and now after having been in business for two years we’re stronger than ever. Sometimes a little risk individually and in the family is a great way to put your dreams in motion and get that new business going.

What about liability? Well liability exists in everything we do, as soon as we leave the front door of our homes (and sometimes before) we take on the possibility of liability. Business liability can be avoided greatly by the establishment of an entity. I don’t recommend going into business as an individual unless your business is both surefire and remote from any legal liability; face it, that scenario is just not realistic. It is both quick and easy to set up an incorporation or limited liability company and both will limit your individual legal and financial liability.

This is year to make things happen guys; if you’re ready to get your own business of the ground, start planning the financials and get an incorporation or llc set up to limit the liability you take on. Good luck to all in this great year and lets hope those New Years Resolutions weren’t for naught.

-DFG

The Lawsuit

What is a lawsuit? This probably sounds like a simple question to many; and in essence it is. Lets dissect the different parts of a lawsuit and what to expect if you are the unfortunate recipient of a court summons. All lawsuits begin with what I like to call a “first filing”. The first filing is usually the “Complaint” and “Summons” (along with some other technical forms). The complaint states the allegations being made by the Plaintiff and the summons is the official document that essentially allows the court to bring a defendant into a case. The most important aspect of the summons is that it is a call to action. Generally a defendant will have (30) thirty calendar days in which to respond to a complaint; this statement is found stated clearly on the summons.

Once you are served with a complaint and summons, you must act quickly. You need to obtain legal assistance in the form of an attorney or a paralegal service to assist you in preparing a response to the “first filing”. If you do not file a response to a plaintiffs lawsuit, essentially the plaintiff may seek a judgment against you without you being heard in the matter. There are often other factors in play regarding proper service and jurisdiction which can be argued, so again, seek out help if you are served with a summons.

After the initiation of the lawsuit comes  the part that I call the “in between”. This is usually the most expensive part of litigation; this is where a plaintiff can really make you spend money if they have the time and resources. The in between involves what is called “discovery”. Discovery is the method parties in a lawsuit use to discover facts about each others case. The reason this can get costly is the form and manner in which discovery documents must be presented and the sometimes complicated issues involving them. Aside from discovery, in between there can be “Motions”, which are basically court hearings on one parties request that the court make an order. There are various motions that can be made and an attorney or paralegal service should be consulted if you are on the receiving end of a motion as they also have time limits for responding.

Last but not least is “the end”. A lawsuit can end in one of two ways, by settlement or by court judgment. If the parties settle, the matter is dismissed and the parties agree to a certain disposition of the case. If the “first filing” and “in between” have passed and the parties have not yet settled, the case is usually determined by a judge (or jury) at trial (and on some occasions on motion by one of the parties before trial). The parties will present evidence and testimony to the court and the court will make a decision based upon the facts.

In conclusion. Lawsuits must be taken seriously and assistance should always (at least initially) be sought. Lawsuits involve many time and other formal requirements, so I always recommend that you obtain assistance at least at the onset of a case. It’s hard to avoid, as almost 1 in 4 people are on the defending end of a lawsuit, so instead of spending your time trying to avoid a lawsuit (which of course is still important), prepare yourself to possibly defend one.

-DFG

Things to come…

January 2nd will be my first Consumer Watch post on this blog. Essentially it will be a spotlight on the complaints consumers have against businesses and what those businesses do when presented with legitimate complaints. This first story is in fact a complaint that I will personally be drafting a complaint to present to Office Depot corporate regarding a local store and an episode of false advertising I had to experience.

Among other things this week has held some great news for me. I became engaged on Christmas to my wonderful fiancee’. Also, I have to have gained at least 20 pounds from all the food I ate during the Christmas holiday; my fiancee’ and I made a deal that as soon as the holiday season is over (New Years remains) we’re going to have a good two to three day detox and start with a diet and exercise regimen.

Now to look at my actual work calendar for this coming week: I assisted on an appeal of a case originally heard in the Santa Monica courthouse regarding Fraud. I drafted the opening brief and I just got back the reply brief from opposing counsel last week, so most of the week will find me looking over the reply and communicating with the attorney for the appellant on preparation for oral argument. I have an Ex Parte that I’m drafting on a matter being heard in the Santa Monica courthouse regarding wrongful foreclosure.

Lots of big things rolling towards my office this week; should be a busy and productive work week. I hope everyone had a very Merry Christmas and that your all rested up now so we can get this year over with. I can’t wait to see you 2010!

-DFG

An Introduction to Good Business

What is good business?

I’m sure some of you have heard the phrase before either in a business class you took or maybe just in your day to day life. I think it means different things to different people, ultimately becoming what you consider to be the ideal experience when transacting business with a merchant. Let’s work with an example here; a simple one at that. It’s a nice sunny Saturday afternoon, and you decide to go out to lunch with a friend at a local Chinese restaurant. When you arrive at the restaurant, you wait ten minutes before you are acknowledged by an employee, you are seated at a table which has not been cleaned, and when your waiter arrives to take your order, she is rude and very un-friendly. This is a prime example of bad business; good business is usually the exact opposite of this scenario. Now I say “usually” because it is, in fact impossible for business to always be perfect or to fit our vision of perfection; this is when a little goodwill goes a long way.

Consumer Watch is my answer to the ever persistent question that pops up in my mind as I visit an establishment, what ever happened to “Good Business”? What ever happened to “The Customer is Always Right” and the customer being the most important part of a business? Well I want to find out. Consider these segments a case study; a very intimate one. I plan on voicing my opinions about the bad service many of the well known and large companies are dishing out to us as consumers. Let’s see what they do when they’re confronted with a genuine problem; do they apologize for the wait? (metaphorically speaking) or will they instead continue their pattern of “bad business” with a “rude and unfriendly” waiter? (again; not literal)

Lets find out…

Next week: Does Office Depot deceive it’s customers with false advertising? What manner of person is managing these stores and what if any goodwill is demonstrated on the part of their management?

Advertised for $79.99; $99.99 at the register?

Home Office

So I figured I would write a more personal post today, distancing a little bit from the usual legal posts. I just finished moving into a beautiful two bedroom apartment very near to the LAX airport. So me and my fiancée finished setting up our home office which is why I took a bit of a hiatus from posting on here. The office looks amazing; I’ve always fantasized of having an extra room in my home that could be used as an office or even just a computer room. Now this comes from years of using my family computer a mere two to three feet away from my parents watching TV; or later in my life when I had a laptop that I used perched up on my bed, it just isn’t the same as having a dedicated and organized room for business and computing tasks.

Well I got my fiancées computer and my computer up into the room today and we’re both glued to our relative monitors. She’s getting Quicken set up on her computer and i’m over here typing away on my blog and downloading Outlook so I can run Exchange from home. Now i’m not fully content with not posting a legal blog on here in the last few days, so I’ll be getting to that very very soon; most likely over the weekend.

I’ll close with a picture of what our office is shaping up to be. We will eventually get a filing cabinet and some other storage in here, but the essentials are here.

Our home office as of present.