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As a lawyer who represents people interested filing Chapter 7 or Chapter 13 Bankruptcy in the Sacramento Metropolitan area I am often frustrated by the misinformation individuals receive surrounding the bankruptcy process. While bankruptcy remains a complicated legal matter and, as such, can be an unsettling consideration for just about any individual. I find that few people take it upon himself or herself to become better informed about the bankruptcy process from the numerous individuals who have previously sought relief under the Bankruptcy Code.

Peoples’ general lack of information about the bankruptcy process has created a stigma for many individuals which causes unnecessary anxiety and other problems for individuals who may be experiencing financial turmoil. As the Philadelphia Inquirer noted on December 26, 2010 life after bankruptcy is not the “financial desert” many individuals fear is a result of filing for Chapter 7 or Chapter 13. As a matter of fact, paranoia created due to this unrealistic fear of turning to the bankruptcy code for financial relief has drained too many individual’s assets that could have been preserved had the individual consulted with an attorney sooner rather than later in the process. Furthermore, individuals plagued with incessant calls from angry creditors could again return to times where they were unafraid to answer the telephone without fear of having to deal with annoying or harassing calls regarding unpaid debts.

While filing for bankruptcy is not free of long term consequences, in that the filing becomes a matter of public record that can stay on your credit report for a number of years, these consequences are often times softened compared to the combination of potential benefits a bankruptcy filing can have on an individual’s economic circumstances. Few people take into account that many people begin to receive offers for the extension of credit within a year after filing for bankruptcy (although these offers are often for minimal amounts and on bad terms for a borrower). There are studies which show that Debtors have been able to get home loans within two years of being discharged from their previous debts. This of course presumes that those individuals have taken the time to reestablish themselves financially.

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Los economistas y expertos legales consideran que 2011 podría ver una desaceleración en las presentaciones de bancarrota personal. Como los indicadores apuntan a una mejora en la economía y los consumidores pedir prestado menos dinero, “hay menos razones para que la gente dé el paso de la declaración de quiebra”, según el profesor de la Universidad de Illinois, Robert Lawless.

Los consumidores estadounidenses de presentación para el Capítulo 7 o Capítulo 13 superó los 1,5 millones en 2010. Este número representa un aumento del 9% a partir de 2009. El sudoeste y sudeste de Estados representaron la mayoría de los documentos presentados aumentó el año pasado. Parece que las condiciones en el sureste han mejorado en cierta medida con los documentos presentados disminuyó en estados como Tennessee, Carolina del Sur y Alabama. Sin embargo, las comunidades en el suroeste siguen sumidas en la crisis económica experimentada por las familias numerosas en todo el país. California y Arizona se registró un incremento aproximado del 25% de las quiebras a partir de 2009. La crisis económica ha obligado a las personas a tomar decisiones difíciles o compromisos incómodos con lo que se refiere a la gestión de su presupuesto mensual. Numerosas familias se han visto obligados a tomar estas decisiones con respecto a sus casas o las hipotecas.

Aquí en el área metropolitana de Sacramento que he conocido muchas personas que continúan manteniendo en hipotecas que no pueden pagar porque no puede conseguir una modificación de préstamo o, hasta el rebote de los valores de bienes raíces, la refinanciación de su propiedad. El hecho es, sin embargo, que la quiebra personal está disponible para individuos que tienen una cantidad extrema de la deuda y no pueden pagar sus obligaciones financieras. La eliminación de escalonamiento de la deuda, o la creación de un plan para pagar, puede ayudar a las personas utilizar sus recursos financieros de manera más eficiente para cumplir con otras obligaciones financieras.

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Economists and legal experts believe that 2011 could see a slowdown in personal bankruptcy filings. As indicators point to an improving economy and consumers borrow less money, “there is less reason for people to take the step of filing for bankruptcy” according to University of Illinois Professor, Robert Lawless.

American consumers filing for Chapter 7 or Chapter 13 topped 1.5 Million in 2010. This number represents an increase of 9% from 2009. The Southwestern and Southeastern States accounted for a majority of the increased filings last year. It appears that conditions in the Southeast have improved to some degree with decreased filings in states like Tennessee, South Carolina, and Alabama. However, communities in the Southwest remain mired in the economic turmoil experienced by numerous households across the country. Both California and Arizona saw an approximate 25% increase in bankruptcies from 2009. The economic crisis has forced individuals to make difficult choices or uncomfortable compromises with regard to managing their monthly budget. Numerous households have been forced to make these decisions with regard to their houses or mortgages.

Here in the Sacramento metropolitan area I have met many people who continue to hold onto mortgages they cannot afford because they are unable to get a loan modification or, until real estate values rebound, refinance their property. The fact remains, however, that personal bankruptcy is available to individuals who have extreme amounts of debt and are unable to pay their financial obligations. Eliminating staggering debt, or creating a plan to repay it, can help individuals use their financial resources more efficiently to meet other financial obligations.

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Si usted es un residente del área metropolitana de Sacramento puede que te interese saber que el capítulo 7 y el Capítulo 13 declaraciones de quiebra se han desacelerado en el último mes. Aunque estas cifras pueden indicar un posible signo de recuperación económica, los números para el año 2010 en su conjunto se mantienen en un alto de cinco años.

El número de hogares individuales declaración de quiebra se redujo en un 13% el mes pasado, según el Wall Street Journal. Los Estados Unidos vieron 114.587 declaraciones de quiebra personal en noviembre en su conjunto. Si bien estos números se han reducido de manera significativa a partir de octubre, el número de solicitudes sigue siendo 2,2% superior al mismo período del año pasado. Los analistas predicen que aproximadamente 1,6 millones de personas se han declarado en bancarrota en 2010. Este es el mayor número de solicitudes presentadas desde que el Congreso aprobó la ley de reforma de la bancarrota en 2005. El Congreso cambió el código de bancarrota en 2005 con el fin de hacer más difícil para las personas que califican para el Capítulo 7 y eliminar sus deudas.

Algunos economistas opinan que la crisis crediticia que afectó este pais, junto con la crisis económica empujó quiebras mayor, ya que las personas ya no podía utilizar nuevas fuentes de crédito para pagar las deudas existentes y se vieron obligados a declararse en quiebra. Sin embargo, las pérdidas de empleo parecen seguir siendo la fuerza impulsora detrás de la avalancha de declaraciones de quiebra en los últimos años. De acuerdo con encuestas realizadas por las personas inscritas en las clases obligatorias de asesoría de crédito, como requisito previo a la declaración de quiebra, el 65% observó una reducción en los ingresos fue la causa de su situación financiera.

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If you are a resident of the Sacramento Metropolitan area you may be interested to know that Chapter 7 and Chapter 13 bankruptcy filings have slowed over the last month. Although these numbers may point to a possible sign of economic recovery, the numbers for 2010 as a whole remain at a five year high.

The number of individual households filing for bankruptcy dropped by 13% last month according to the Wall Street Journal. The United States saw 114,587 personal bankruptcy filings in November as whole. While these numbers are down significantly from October, the number of filings still remains 2.2% higher than this time last year. Analysts predict that approximately 1.6 million people will have filed for bankruptcy in 2010. This is the highest number of filings since Congress passed the bankruptcy reform law in 2005. Congress changed the bankruptcy code in 2005 in order to make it more difficult for individuals to qualify for Chapter 7 and eliminate their debts.

Some economists opine that the credit crisis which struck the nation along with the economic downturn pushed bankruptcy filings higher since individuals could no longer use new sources of credit to pay down existing debts and were forced into declaring bankruptcy. Nonetheless, job losses appear remain the driving force behind the flood of bankruptcy filings over the past few years. According to surveys taken by individuals enrolled in mandatory credit counseling classes, required as a prerequisite to filing for bankruptcy, 65% noted a reduction in income was the cause of their financial situation.

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La decisión de archivo, ya sea para el Capítulo 7 o Capítulo 13 es un grande. Esta decisión es la que requiere una consideración y unos conocimientos especializados. Uno de los aspectos más importantes de mi trabajo como abogado de Bancarrota de Sacramento es asesorar a los residentes de la zona de Sacramento en cuanto a si la bancarrota es una decisión viable para él / ella, para empezar. Muchas personas que programar una consulta con mi oficina están ansiosos por evitar la presentación de Capítulo 7 o Capítulo 13 y vienen a mi oficina en un intento de explorar las opciones disponibles para ellos. En algunos casos, los clientes potenciales tienen cuestiones específicas que deben abordarse en el marco de sus circunstancias económicas.

Lo primero que una persona considerando la bancarrota debe tener en cuenta es la cantidad de deuda que la persona tiene que se cierne sobre sus hombros. Capítulo 7 o Capítulo 13 no es realmente un paso prudente tomar si su ratio deuda / ingresos o ratio deuda / activos son relativamente bajos. El código de bancarrota fue revisado en 2005, lo que hace más difícil para una persona para calificar para el Capítulo 7 en el primer lugar. Por lo tanto, la cuestión de si la bancarrota puede proporcionar una solución para el deudor suele resolverse mediante una ecuación matemática simple. Si una persona califica para la bancarrota bajo el código revisado, entonces hay una alta probabilidad de que el individuo tiene una deuda alta proporción de ingresos que se pueden resolver mediante la presentación.

Una forma sencilla de calcular esta relación es de una persona para examinar sus gastos mensuales para todas sus obligaciones mensuales necesarios. Esto significa que el deudor tiene que compilar sus pagos mensuales para las cosas tales como vivienda, vehículo y gastos de manutención. No incluya los pagos por tarjetas de crédito u otros gastos no esenciales. A continuación, el deudor debe comparar ese número con su ingreso mensual. Como regla general, si el deudor no puede pagar sus deudas pendientes con el saldo de su ingreso que excede los gastos mensuales necesarios, durante un período de tres años, la quiebra puede ser una buena opción.

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The decision to file for either Chapter 7 or Chapter 13 is a big one. This decision is one that requires substantial consideration and expertise. One of the most significant aspects of my work as a Sacramento Bankruptcy Attorney is to advise Sacramento area residents as to whether bankruptcy is a viable decision for him/her to begin with. Many individuals who schedule a consultation with my office are anxious to avoid filing Chapter 7 or Chapter 13 and come to my office in an attempt to explore the options available to them. In some cases, potential clients have specific matters that need to be addressed under their economic circumstances.

The first thing a person considering bankruptcy needs to take into account is the amount of debt the person has looming over his/her shoulders. Chapter 7 or Chapter 13 is really not a wise step to take if your debt to income ratio or debt to assets ratio are relatively low. The Bankruptcy code was revised in 2005, making it more difficult for a person to qualify for Chapter 7 in the first place. Thus, this question of whether bankruptcy can provide a solution to the debtor is often resolved by a simple mathematical equation. If an individual qualifies for Bankruptcy under the revised code, then there is a high probability that the individual has a high debt to income ratio which can be resolved by filing.

A simple way to calculate this ratio is for a person to examine his/her monthly expenses for all your necessary monthly obligations. This means the debtor needs to compile his/her monthly payments for things such as housing, vehicle, and living expenses. Do not include payments for credit cards or other nonessential expenses. Next, the debtor must compare that number with his monthly income. As a general rule, if the debtor cannot pay off his outstanding debts with the balance of his income that exceeds the necessary monthly expenses, over a three year period, bankruptcy may be a good option.

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Los residentes en el área metropolitana de Sacramento son probablemente conscientes de que, en general, la ley prevé los jueces con amplio margen de discrecionalidad para imponer sanciones a las personas físicas y morales que aparecen frente a ellos. Como tal, cualquier residente que enfrentan una ejecución hipotecaria o posible bancarrota del capítulo 7 puede estar interesado en saber que los jueces se han vuelto cada vez más estrictas contra los prestamistas hipotecarios en los casos de ejecución hipotecaria se escuchan en sus salas de audiencias. Ayer, el Washington Post publicó un artículo destacando la tendencia actual con el comportamiento de los jueces contra las compañías de hipoteca en sus salas de audiencias. Si bien el nivel de tolerancia de errores en el papeleo depende del juez que conoce del asunto en particular, los jueces en su conjunto tienen una reputación cada vez mayor de fallo en contra de los prestamistas hipotecarios cuando los problemas papeleo o surgen problemas.

Un juez, Jeffrey Spinner, de Nueva York, estima que se ha despedido hasta el 50 por ciento de los casos de ejecución hipotecaria ante él sobre la base de documentos descuidado o fraudulentas presentadas por los prestamistas. De hecho, el juez Spinner recientemente borrado casi 300.000 dólares en deuda y le dio una casa de nuevo al prestatario de forma gratuita porque el papeleo de la entidad crediticia fue tan equivocada y su comportamiento en las negociaciones con el individuo era “repugnante”.

Decisiones como éstas pánico huelga en la industria de préstamos hipotecarios y el proceso de ejecución hipotecaria. Las compañías hipotecarias temen que los despidos como el visto por el juez Spinner podría establecer un precedente extraordinario y agitar el sistema nacional de ejecución hipotecaria. Este tipo de decisiones tienen los bancos preocupados y que planean apelar lo que consideran remedios drásticos de entre 20 y 50 por ciento de los casos de ejecución hipotecaria en el área de Nueva York.

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Residents in the Sacramento metropolitan area are probably aware that, in general, the law provides judges with broad discretion to impose sanctions on the individuals and corporations that appear before them. As such, any resident facing foreclosure or possible Chapter 7 bankruptcy may be interested to know that judges have become increasingly stringent against mortgage lenders in the foreclosure cases being heard in their courtrooms. Today, The Washington Post published a story highlighting the current trend with judges’ behavior against mortgage companies in their courtrooms. While the level of tolerance for mistakes in paperwork depends on the particular judge hearing the case, judges as a whole have an increasing reputation for ruling against mortgage lenders when paperwork issues or problems come up.

One Judge, Jeffrey Spinner, out of New York estimates that he has dismissed up to 50 percent of the foreclosure cases brought before him on the basis of sloppy or fraudulent paperwork filed by lenders. In fact, Judge Spinner recently erased nearly $300,000 in debt and gave a house back to the borrower for free because the lender’s paperwork was so flawed and its behavior in negotiations with the individual was “repugnant.”

Decisions like these strike panic in the mortgage lending industry and foreclosure process. Mortgage companies fear that dismissals like the one seen by Judge Spinner could establish an extraordinary precedent and stir up the country’s foreclosure system. These types of decisions have the banks worried and they plan to appeal what they consider to be drastic remedies from between 20 to 50 percent of foreclosure cases in the New York City area.

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Sacramento area residents considering Chapter 13 bankruptcy may be interested to know that bankruptcy law allows a filer to “cram down” an automobile loan to its fair market value. A “cramdown” is the lending and bankruptcy term that allows a borrower to eliminate any excess principal owed on a loan to the market value of the property that secures the loan. Mortgage Lender’s made the “cramdown” issue highly visible last year when Congress considered passing a law that would have allowed home mortgages to be “crammed down” under a Chapter 13 bankruptcy. Due to the vociferous opposition posed by the mortgage lending industry Congress never passed that law. However, the law remains settled that a Chapter 13 debtor can use a “cramdown” on just about any loan other than a primary home mortgage.

A “cramdown” is available to a Chapter 13 debtor on just about every type of secured loan besides the loan on a first deed of trust or mortgage. This means the “cramdown” is available for loans on trucks, cars, second homes, boats, and just about any property that would be foreclosed or repossessed in the borrower fails to make payments. Most Chapter 13 debtors use this law on their personal vehicles. Pursuant to the Bankruptcy Code, the “cramdown” remains available on vehicles purchased more than 30 months ago. Thus, if a debtor owes $15,000 on a vehicle whose value is only $12,000, he/she could “cram down” the remaining $3,000 son long as the vehicle was bought more than 30 months ago. The bankruptcy law also allows the debtor to modify the interest rate affecting the loan to the current “prime” interest rate plus 3 percent. Depending on the conditions whereby a debtor received the loan this could drop their interest rate substantially.

Use of the Chapter 13 “cramdown” can benefit a Chapter 13 debtor substantially by allowing him/her to retain their personal vehicle at a more affordable monthly payment. This mechanism allows my client’s to maintain their possessions and experience as little change as possible after filing the voluntary petition.

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