One of the most common questions this office gets is where a bankruptcy case is filed. Where the case is filed can have a significant impact on the administration of the case. Different judges have different policies, procedures, and customs. If you live in the San Francisco Peninsula (for example Daly City, San Mateo, South San Francisco, Pacifica, Redwood City, or San Bruno) or the City of San Francisco, your case will be probably need to be filed in San Francisco, and you will need to appear at least once at the courthouse downtown to give testimony. If you live in Alameda County or Contra Costa County, the case will probably be filed in Oakland. If you live in Santa Clara County, your case will probably be filed in San Jose. This office regularly represents clients in all three of these courthouses. As a practical matter, when you use an attorney your bankruptcy documents will be filed with the court electronically. However, complex rules apply to determine what law applies to a particular case. Individuals who lived out of state in recent years may need to use their prior state exemptions, or federal exemptions. Questions? Contact us for a free consultation.
We regularly talk to individuals who, despite filing or intending to file bankruptcy, state that they want keep second homes without giving it any thought. They should put more thought into it, because they may be missing an opportunity to create a budget that will keep them from ever having to file bankruptcy again.
To the extent it is feasible for the person to pay and the expense is justifiable (justifiable is a lower standard than "personal best decision"), this is the filer's call and there can be a lot of factors that might shape the decision. But oftentimes, a simple framework should be to ask whether this property is - to you - really worth the balance of loans that can't be discharged or modified in bankruptcy.
How about that house in Daly City that's in foreclosure that is generating negative cash flow and needs a new roof? The ones your friends are renting from your for a below-market rent? They always pay on time, right? Do you really have the means to subsidize their housing expenses?
When a person files bankruptcy, they should understand their values and what is important to them. Most people value their own family's financial security Fortunately, the opportunity to strip some second and third mortgages or equity lines means these sort of choices don't always have to be as difficult. With a lot of property, you may be able to keep it by only committing to pay what it is actually worth, and you may be able to afford that by renting the property for fair rent.
It was reported in the news today that Bank of America made a "side deal" with the government related to the "robo-signing" scandal. If you missed the news, robo-signing is a catchy name for lying, cheating, and stealing automatically (robotically) while thinking only about profits.
As part of the side deal it cut with the government, Bank of America will give some borrowers principal reductions. We'd speculate that the real result of this program will be "almost all talk, almost no action." That remains to be seen.
But what many may not be aware of is that some borrowers - including those who used "80/20" purchase loans - may be able to get the equivalent of a 20% principal reduction of their total mortgage debt by stripping their second mortgage lien in Chapter 13 bankruptcy. If you are interested in how this process works, and whether you might qualify, contact us for a free consultation.
The bankruptcy discharge is a powerful remedy to eliminate old debts - and preserve crucial assets like most retirement plans and the family home. The goal of the bankruptcy process, through the discharge, is to give you a "fresh start." A discharge alone, however will not get many people on the right path.
From the beginning of each client relationship, we try to work to develop a bankruptcy exit plan. Filing bankruptcy without a concrete financial plan for future years is a bad idea. Are you thinking about filing bankruptcy? The opportunity to start over only comes along so often. Work with an attorney and professionals who will help you make the most of your fresh start.
Key issues that needed to be decided include maximizing retirement contributions, knowing what obligations should be reaffirmed or modified, and planning future spending and borrowing in a way that is most likely to keep you from ever needing to file bankruptcy again.
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Law Office of Jason Honaker