Modesto Bankruptcy Lawyer Blog

Modesto Bankruptcy & Auto Leases: Don't Drive Yourself Into Debt

Tue, 15 May 2012 10:13:25 -0800

Modesto bankruptcy attorneys know that there are a host of reasons people seek relief from a Modesto bankruptcy.

Often, people think of home foreclosures or soaring medical bills. And those are all very common debt problems that can quickly get you in over your head.

However one thing that often isn't mentioned, but can be just as perilous financially, are automobile leases. Even if it's not quite enough to push you to the brink of bankruptcy on its own, it can be enough to push you over the edge.

Now, first thing's first: Bankruptcy is not a bad thing. No longer is it stigmatized, and in fact, it can do wonders for your credit and in releasing you from a mountain of debt from which there is no other way to escape.

That said, of course, it's better to avoid the debt in the first place if you can.

With regard to auto leases, some people find they like this because it allows them to have a new car every few years. And it's true that for some people, there may be situations in which leasing makes sense.

But the truth is, many leases can be a bad deal financially, especially with balloon payments and mileage payments that are due at the end of a lease. Bankruptcy can eliminate this kind of debt.

However, it's important to educate yourself on some of the pitfalls with regard to leasing a car, prior to having that debt spiral into something unmanageable.

First off, the amount of your lease contract isn't going to change, even if you get into an accident - and even if that accident isn't your fault. If the car is totaled, you are probably still going to be responsible to pay the dealership back the full amount of that lease - regardless of whether the insurance company gives you back less than you owe on it. One way you can try to avoid this is by purchasing gap insurance, which is going to cover you for the difference.

Secondly, there's a limit to how long you can drive a leased car and for how many miles. In a lot of cases, the leases are set for five years and 60,000 miles. So if you go over that mileage (which most people do - it's only 12,000 miles a year), you're going to pay a penalty for every single mile. And even if you do manage to keep it under the allotted mileage, you aren't going to get any credit for whatever you don't use.

Thirdly, if you run into financial difficulties - say, a job loss or layoff - and you can't afford to pay the remainder of your lease, the dealership will auction your car to recover whatever it can. Whatever it doesn't get? You're responsible for that.

Fourthly, while you don't own the vehicle, you are going to be responsible for maintenance and repairs. Of course, there may be fewer costs associated with this because generally, you'll be driving a newer car. However, if there are any problems, it's your problem - not the dealership's. That means that you are making an investment on something from which you are unlikely to get any return, other than the fact that you will be able to continue to drive it for the remainder of your lease, which you had expected anyway.

And finally, if you do get attached to that car, buying it after the term of your lease is almost never financially smart. In many cases, the car is worth way more than the sticker price you'll be asked to pay.

Modesto Foreclosure Defense & Kekauoha-Alisa v. Ameriquest Mortgage

Wed, 25 Apr 2012 09:57:42 -0800

The economy is shockingly bad and people around the country are struggling to stay in their homes. If your home is involved in foreclosure proceedings, it is important to understand the different types of relief you can obtain in order to save your home.

Our experienced Modesto bankruptcy attorneys can give you the information you need and help guide you through your Modesto foreclosure defense.

The court in Kekauoha-Alisa v. Ameriquest Mortgage Company says that if your home is in foreclosure and you file for chapter 13 bankruptcy in Modesto, there is an immediate stay imposed on the sale of the property. However, it is critical for the lender to notify the public of any postponement of the foreclosure sale.

Foreclosure is running rampant in California. There are several different forms of foreclosure, but there are two that are more common in California. These two forms of foreclosure in California are judicial foreclosures and non-judicial foreclosures. Judicial foreclosures involve cases where the lender files suit to have the property foreclosed on and is a court action against the owner/borrower.

Considering the increasing amount of borrowers who are defaulting on their mortgages, there was the creation of a second form of foreclosure. Non-judicial foreclosure was created to avoid the stigma of being sued and the judicial inefficiency created by the large number of foreclosures. Non-judicial foreclosures do not involve a lawsuit or court proceedings. Instead, the borrower gets notice of the lenders intent to sell the property, and if the borrower is not able to pay the amount they are in default, then the property is sold in a foreclosure sale. Upon the sale, the lender then gets the proceeds and does not seek damages from the borrower. In California, non-judicial foreclosure is regulated by the Civil Code 2924.

Foreclosure sales are frequently postponed because of possible negotiations. The only way to fully stop a foreclosure sale is to pay the pending default amount or to file for bankruptcy.

The Ninth Circuit Court of Appeals has recently heard a case where the application of California statute in non-judicial foreclosure sales was discussed. See Kekauoha-Alisa, et al. v. Ameriquest Mortgage Company, et al., No. 09-60019 (9th Cir. Mar. 26, 2012). Kekauoha-Alisa (Borrower) refinanced her home and executed a promissory note with Ameriquest Mortgage Company (Lender). After defaulting on this loan, borrower commenced foreclosure proceedings and scheduled the foreclosure sale of the property.

Three days before the sale, borrower filed for bankruptcy. As stipulated in state statute, once bankruptcy is filed the sale of any property involved in the bankruptcy is stopped. Statute and the mortgage contract further stipulated that in order to postpone the foreclosure sale, the lender or the lender's representative must make a public announcement of the postponement for it to be valid. Lender knew of this procedural requirement and complied three times. However, on the fourth time the lender sent a company secretary to the auction to postpone the sale and she did not do it correctly.

The court explains that it in order to provide sufficient notice of the sale postponement, the lender or the lender's representative must announce to the potential buyers or post notice.

After petitioning the court for relief from the stay, the court gave the lenders permission to auction of the property. The home was sold and soon after the borrower filed suit against the lender. Borrower argued that by failing to provide notice at the auction, the lender breached the term of the mortgage, breached the non-judicial foreclosure statutory requirements, and engaged in unfair and deceptive business practices.

The Circuit Court looked to California law to guide their decision. In California, when the lender fails to provide the public with notice of the postponement of a foreclosure sale, the postponement is not considered valid or proper. If the lender fails to provide proper postponement, it can be argued that they are engaging in unfair and deceptive trade practices.

Because the lender failed to provide proper notice, the court inferred that the postponement was invalid and thus the lender was engaged in unfair and deceptive business practices. Borrower was able to have the sale of her home voided.

Modesto Bankruptcy Lawyers: Teach Children Smart Money Management

Fri, 06 Apr 2012 07:08:56 -0800

Modesto bankruptcies are often the result of snowballing medical bills, credit card debt and student loans.

Our Modesto bankruptcy attorneys understand that many of these instances are beyond your control. Life happens. A bankruptcy is not an end, but rather a new beginning. It can end harassment from creditors and offer you a chance to start fresh with your finances.

One thing we have learned, though, in our many years representing Modesto bankruptcy clients is that teaching your children good spending habits from an early age can help to put them on great financial footing.

This is especially true considering that predatory lenders often target college students for debit and credit cards that encourage them to spend above their means. The goal is to get students indebted at a young age, particularly at a time when they may not fully grasp what it means to be drowning in debt. This issue can be further compounded upon graduation, when student loan bills start rolling in. In fact, the issue with student loan debt in Modesto and throughout the country has gotten so bad that economists fear it will threaten our economic recovery as a nation. Currently, student loan debt in the U.S. has soared above $1 trillion - surpassing even auto loan and credit card debt. The average student has about $25,000 in student loans - an astonishing increase of 25 percent in just a decade.

Again, there may not be much students can do to ward off all of the financial pitfalls they face, but preparing them to make smart choices can help avoid many problems.

A recent article published by AOL's Daily Finance outlines several ways to teach your children responsible money management.

A survey recently found that a huge majority of parents - nearly 90 percent - assign some form of chores to their children. About half give them an allowance. But of those, only about 20 percent of allowances are directly tied to doing chores. Parents may want to consider changing things up. Having children recognize at a young age that you aren't paid if you don't work will be a lasting lesson. Not only does it teach children responsibility, it provides motivation to do their chores regularly and do them well and also offers them a chance to learn how to save and spend their money.

If you can't afford to give your children an allowance (times are tight for everyone), you may consider offering them non-monetary rewards for their work, such as computer or television time.

It's also considered beneficial to start them off early - as young as 6-years-old. It's a good idea to teach them to use their money wisely. An example of this would be urging your child to put a portion of the money they earn each week or month into a savings account, which could someday be used to purchase a car or help with college. Of course, some of that should be dedicated to fun things as well.

Modesto Bankruptcy Could Be An Option for Elderly Relatives

Sun, 18 Mar 2012 06:34:23 -0800

Much is often made about how to approach an elderly relative about the dangers of remaining behind the wheel. But there is another topic that should be addressed with our loved ones as they age: Whether they are in a position to handle their finances and avoid scams or debt.

A Modesto bankruptcy can certainly help if they already find themselves in a precarious financial state, where creditors and medical bills are mounting and the fixed income checks aren't cutting it. While our Modesto bankruptcy attorneys know it is best to get out ahead of financial troubles before they become all-consuming, filing for bankruptcy in retirement can often lower debt, free up cash and improve quality of life for seniors living on a fixed income.

As the Baby Boomer generation ages, this will be a problem for a growing number of Americans. Consumer Reports is up on the trend, and detailed why taking the financial reigns may be important and how to approach it.

Like anything else, keeping up with finances requires at least some amount of energy and planning. It can get tougher as we get older.

That's not to mention that your elderly relative is vulnerable to potential scams. In fact, Investor Protection Trust reports that a fifth of all Americans over age 65 are victims of a financial scam.

The first thing you want to do is look for some indication or clues that your aging relative may be having trouble handling their finances. Are they falling behind on bills? Have they changed their spending habits? Are they getting letters from collection agencies? Are they giving away money anytime someone asks? Are they having trouble remembering how much they recently spent and where?

Any of these could be a red flag or a sign that it's time to have a discussion. Words should be carefully chosen, and framed something to the effect of, "I know you want to keep writing your own checks, but I'd like to give you some help. Maybe we could do it together?" What you want to steer clear of is emotionally hurtful and sweeping statements such as, "You're incapable of doing this anymore."

Once you have established this, ask to speak with your loved one's doctor. Try to get a clearer picture of where they are at physically and mentally. Then, you'll want to look into where your relative is at financially by looking at recent credit card and bank statements and investment accounts. Go through the monthly income and figure out a monthly budget. Also figure out if there is a will, health care power of attorney and life insurance policy.

Make sure that the investments being made are in stable, low-risk ventures. Scammers will often target the elderly by framing it as a business opportunity or investment.

Once you've got a good handle on the facts, consider having a family meeting to get everyone on the same page. Because these situations can at times become tense, you may want to consider consulting with an elder-care mediator.

Keep in mind too that there are certain pitfalls you should avoid, such as co-signing on credit. This could make you responsible for your loved one's debt if he or she either dies or can't pay it.

And if your loved one does become overwhelmed with debt, know that a Modesto bankruptcy is an option.

Modesto Consumer Debt Collection Practices Deemed Illegal

Mon, 12 Mar 2012 06:00:57 -0800

Anyone facing a mountain of Modesto consumer debt will appreciate this: One of the country's largest debt buyers has been fined $2.5 million by the Federal Trade Commission for breaking the law.

As our Modesto bankruptcy attorneys understand it, Michigan-based Asset Acceptance, which operates throughout the country, was found to have violated the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.

Their business model works like this: Asset Acceptance will buy old debt from places like credit card companies, gyms, or stores. They purchase it very cheaply, as the original company has essentially written it off. Then, Asset Acceptance proceeds to hound and harass those who owe.

Unfortunately, this in and of itself is not illegal (we wish it were). But there are very specific guidelines it must follow when doing so - and apparently, it wasn't.

The FTC lobbed a total of nine complaints against the company, which mostly included some form of deception. The most common form of this was threatening to sue for collection of the debt - when it would have had no legal right to do so. That's because after a certain amount of time passes, the statute of limitations for suing on a particular debt has passed (it's called a time-barred debt). That didn't stop the company from making the threat. And what's more, they didn't tell people that if they made a partial payment on the debt, they could be unwittingly extending that statute of limitations.

David Vladeck, Director of the FTC's Bureau of Consumer Protection, was quoted by consumer reports as saying most people don't understand what their rights are in these situations. He went on to say that it's best to contact an experienced attorney before caving to the strong-arm, thug-like tactics of some of these agencies.

Additionally, the issue of time-barred debts is so common that the FTC has issued informational guidelines to educate consumers. The basics of this information are this:

That under the Fair Debt Collection Practices Act, there is a statute of limitations on how long a company has to sue you over a debt. The length of this debt is generally anywhere from 3 to 10 years, but it varies from state to state and also depends on the kind of debt.

A debtor doesn't have to tell you that a debt is time-barred, but you are certainly within your rights to ask. If the company gives you an answer, by law, that must be a truthful answer. If it won't give you an answer, you can dispute the claim by sending them a notice in writing, asking when your last payment was and telling them you want to verify it. Collection agencies have to stop contacting you until they provide you with verification.

If your debt is time-barred, you basically have three options: don't pay your debt, pay a partial amount on the debt or pay off the debt. Each one of these options carries its own benefits and consequences, and your best bet is to speak with an attorney before you decide. For example, if you don't pay your debt, the company may not be able to sue, but it could hurt your credit. If you pay a partial amount, the debt becomes "revived, the clock restarts on that statute of limitations and the company can sue you. If you choose to pay off the debt, the company may be willing to accept less than the full amount. It helps to have an attorney who is knowledgeable on such matters and can assist you.

Modesto Consumer Debt Could Result from Tax Scams, IRS Warns

Mon, 27 Feb 2012 11:44:44 -0800

It's tax season - that dreaded time of year when consumers must dig through earnings statements and income documents and try to figure out whether they must pay Uncle Sam or expect a check in the mail.

But, as CNNMoney is reporting, the Internal Revenue Service is warning consumers to beware of some common but problematic scams that can leave not only long-term economic stains on a person's record, but create debt problems as well.

Modesto bankruptcy lawyers understand that tax season isn't usually a fun time of year, but it's important to pay close attention to this aspect of your finances in order to ensure you don't have to deal with an IRS audit or face financial questions if victimized by a scam artist.

Also, bankruptcy in Modesto may be helpful for people who are dealing with long-term tax bankruptcy issues. While there are exceptions for what types of tax can be discharged and strict rules about how taxes and a bankruptcy filing are used.

For instance, in Chapter 7 bankruptcy in Modesto, a consumer can have income taxes wiped out through the process, but other types of taxes, such as payroll taxes, aren't eligible. There are also time limits on what will be eligible for discharge. The tax return that is in play must be due at least three years before filing for bankruptcy and the tax return had to have been filed at least two years before bankruptcy.

Taxes are eligible for bankruptcy help, but it depends on the circumstances. And there are many scams out there that can hurt consumers financially. Criminals are using any means necessary to try to rip off consumers and tax season is no different. Here are 12 scams that the government is warning consumers to look out for.

Identity theft: This one has gotten plenty of publicity in recent years and for good reason. Many thieves are intercepting income tax refund checks -- to the tune of $1.4 billion 2011.

Phishing: E-mails, text messages, social media and other mediums can be used to steal a person's identity. Once a scammer has a little bit of information about a person, they may be able to use it to ruin your finances.

Bad tax preparers: About 60 percent of consumers use professionals to prepare their taxes, but many of these workers have been found to be involved in scams. If the worker doesn't have a Preparer Tax Identification number, promises large refunds, takes a cut of the refund as a fee or encourages you include false information, it may be a scam.

Hiding offshore income: Taxpayers who hide money outside the country can end up facing major federal criminal charges. But the IRS has offered a reduction in penalties and no threat of criminal charges if people come forward and disclose their offshore accounts.

There's no free money: Some scammers have offered people to file returns with little documentation and get big returns back.

Inflating incomes and expenses: Changing income levels to get a better return is another trap that can lead to criminal charges and penalties.

Filing false forms: Fabricated information on forms or claiming deductions that aren't appropriate can get you in trouble.

Paying for argument advice: There are scam artists who will charge consumers to get advice on how to argue taxes with the IRS, even though many arguments have been discredited by judges.

Claiming zero wages: The IRS can usually spot when someone fraudulently files a "corrected" income form to lower the amount of wages.

Upping the amount of donations: If it seems as if the consumer has overstated how much they have donated, it can lead to an audit.

Disguising corporate ownership: The IRS is working with government entities to determine who are the true owners of small businesses.

Misusing trusts: Transferring money into a trust to reduce taxable income can be a scam to avoid how much liability a person has. The IRS is looking out for that.

Cash-Strapped Modesto Consumers Targeted by Credit Card Companies

Mon, 20 Feb 2012 10:58:05 -0800

CNNMoney is reporting that a new credit card could end up costing customers up to $400 per year just to use the card.

Sadly, this isn't shocking. Credit card companies continuously try everything they can to squeeze money out of their customers. The very people who keep their businesses profiting are the ones who end up suffering. Modesto bankruptcy attorneys have seen this happen many times.

And often bankruptcy in Modesto is an answer to the aggressive and predatory nature of credit card company tactics. Through bankruptcy, a consumer can eliminate large amounts of credit card debt.

This allows them to prepare for their financial future while helping them today. Filing for bankruptcy provides instant help for consumers through what's called an automatic stay. This action stops creditors and debt collectors from harassing consumers.

So, the hours of automated calls, harassing emails and letters that threaten legal action and wage garnishments come to an end. These actions are barred from happening and creditors must make a court appearance and file certain motions in order to be able to contact the debtor directly.

According to the news article, First Premier's Platinum card is aimed at consumers who have bad credit. It has a ridiculously high 36 percent APR and has some of the highest fees among all credit cards, analysts are saying.

A common myth of bankruptcy is that people who file are unable to get credit. This myth is easily disproved. Consumers who file for bankruptcy often get credit card offers as soon as they finish the process.

In some cases, these offers aren't very good, such as the First Premier Platinum card. But consumers will have the power to pick and choose whether they want to take these initial offers or leave them. They may choose to consider a secured credit card, where the consumer deposits money that will be act as a spending limit.

There are different ways to quickly build back credit after bankruptcy. Consumers shouldn't necessarily dive back into getting a credit card, unless it's with the plan of re-establishing credit and using bankruptcy protection to try to get back on track.

The news article also points out that First Premier has 2.6 million customers and solicits another 1.5 million each month. The company says that it is helping consumers who otherwise would be too risky to be offered credit. Therefore, they are balancing that risk with the higher rates.

And if a consumer seeks an increase in credit, they are charged 25 percent of the amount of the increase. So, if the consumer gets an additional $500 credit, they must pay the company $125. Between the high interest rates and the loads of fees, this card could spell trouble for consumers trying to get back on their feet. But this company isn't alone in offering high-interest, high-fee cards.

Consumers who have used bankruptcy to help their finances must be cautious about how they go about rebuilding credit. All consumers must be careful, as creditors are always looking to make a buck.

Consumers Increase Credit Card Debt in Modesto, Nationwide to Start 2012

Tue, 10 Jan 2012 11:22:49 -0800

As the holiday season came and went, U.S. consumers increased their dependence on credit cards and that has led to many people struggling to get out of the debt -- a prospect that these credit card companies try to avoid.

The Associated Press recently reported that November debt surged by $20.4 billion, the largest monthly gain in a decade. Most experts believe this was fueled by the holiday shopping season, as Americans set aside their economic worries and spent big during the holiday season.

Our Modesto bankruptcy lawyers recognize that people in bad economic situations attempt to make sure everything seems normal for their children by continuing normal spending habits, either because of embarrassment or trying to make sure their children aren't disturbed by a different routine. But this can lead to additional debt.

If joblessness is a factor and credit card debt is increasing as people search for employment and a steady stream of income, filing for bankruptcy in Modesto may be a workable option for your family.

For one, most credit card debt is eligible for discharge, meaning that whether you have five credit cards or ten and $10,000 in debt or $50,000, it's possible to have that debt wiped clean as you start over. Some people might say that they don't want to file for bankruptcy because they believe it will hurt their credit score.

But what people must consider is that if they have thousands in credit card debt already and have begun missing payments, their credit score is already poor. As months pass without payments and new fees kick in, the debt compounds. The creditors are reporting these problems to the credit bureaus and your score is likely low anyway.

Filing for bankruptcy is a way out of the continuous cycle of debt. It's a stopping point and a starting point. It ends the continuation of debt that piles on and never seems to stop. At the same time, it starts a fresh life, without the debt that is dragging down a person and their family.

As the Associated Press recently reported, consumer debt spiked in November as consumers were granted more credit cards for gifts and bought more cars with loans from banks. The Federal Reserve reports that credit card debt rose by $5.6 billion and auto loans jumped by $14.8 billion.

The Associated Press reports November was the third straight monthly increase in debt after the economy began showing modest gains. In December, employers added 200,000 jobs and the unemployment rate dropped to 8.5 percent, the lowest rate in three years.

Borrowing has increased in six of the last nine months and in November, Americans saved just 3.5 percent of their income, the lowest rate since the recession began in December 2007.

That could be a recipe for disaster, as lots of debt and little savings can put consumers in Modesto in a precarious position. Our bankruptcy lawyers know that times are tough and especially in California, where the economy hasn't improved as quickly as we had hoped.

Will The New Year Bring Better Finances For You? Modesto Bankruptcy Could Help

Mon, 02 Jan 2012 10:32:31 -0800

At least one Modesto family is hoping that 2012 brings some better fortune than 2011, as their finances have gotten difficult because of job loss.

This is a common refrain that our Modesto bankruptcy lawyers have heard in the last several years as many people struggle with the effects of the economy. Foreclosures, unemployment, high medical bills and other factors have led to financial ruin.

But there is help and it comes in the form of filing for bankruptcy in Modesto. Some people do all they can to avoid bankruptcy, while remaining unaware of the many benefits of these laws.

For people struggling with job loss, a bad mortgage situation or foreclosure, major medical bills that have turned into debt problems or credit card payments that have sparked late fees and high interest rates, bankruptcy can actually be very beneficial. it allows people to discharge their debts and break free from them while providing an opportunity to control their financial future.

Unemployment has hit California hard and Modesto is among the hardest hit areas nationwide, according to a recent report by KRCA.com. While unemployment rates nationwide have continued to drop slightly recently, Modesto still ranks among the highest cities for unemployment rates nationwide.

In fact, in November, 9 of the 10 worst cities for unemployment were located in California. El Centro, California had an unbelievably high 27.2 percent unemployment to lead all cities, while Yuma, Arizona checked in at 23.7 percent. Modesto ranked No. 6 overall at 15.5 percent.

The Modesto Bee recently highlighted one family that is struggling mightily with debt as a result of job loss and is using a Modesto bankruptcy to its advantage. The family of five has struggled since 2009, when David lost his job as a bottled water truck driver. Laura worked part time as a waitress and they owned a three-bedroom house, a boat and took frequent trips to Disneyland with their three daughters.

After David was laid off, the health insurance expired, the boat was repossessed and the trips to Disneyland stopped. The couple filed for bankruptcy to get protection from their debts as they begin to recover from the whirlwind that life has put them in.

Laura is working part time, going to school and seeking a job in the medical field. David is searching for jobs, but seeks disability pay for migraines. Despite a lack of healthcare, the family is able to cover two of their daughters who have pre-existing conditions and other low-cost medical options are helping.

Our Modesto bankruptcy lawyers believe that bankruptcy will go a long way toward helping this family recover from the difficult situation they find themselves in. By clearing off debts, families can begin the process of recovering and starting fresh. Bankruptcy laws are designed to help consumers struggling with debt. Allow these laws to help you if you are in a difficult financial situation.

Modesto Holiday Shopping Season in Full Swing; Credit Card Companies Profit Big Time

Wed, 21 Dec 2011 06:41:23 -0800

With only days away from Christmas, retailers have ramped up their efforts to get shoppers into their stores either for the first time this holiday season or to get them back in for more shopping bliss..

But, it's also been a time where credit card companies have been clamoring to get consumers to sign up for their plastic, offering "perks," "rewards" and "cash back" plans that may end up being more trouble than it's worth for consumers who do not handle credit well..

While the marketing campaigns make it seem so simple to get bonuses, in reality they can be tough to earn or qualify for. In many cases, as Modesto bankruptcy lawyers have seen, people have to spend a certain amount every month, pay off what is owed in a short period or jump through other hoops to get the perks. It's not as simple as receiving the card in the mail, using it and automatically getting money in your pocket. These companies are smart -- they're not giving away any money without making much more.

Credit cards are a necessary evil. Most Americans have at least one and most people have several. In the minority are adults who have no cards and rely on a cash and check system of living. And that's what these cards want because the more we use them, the more in debt we become.

That's where bankruptcy in Modesto comes into play. Many people have fallen for far too many lines of credit, leading them down a path of debt and sometimes financial ruination. These consumers at some point may figure out that late fees, withdrawal transaction fees, and spikes in interest rates can lead them to continually be stuck in debt.

Filing for bankruptcy wipes clean that debt and allows people to live a life without the pressures of creditors and debt collection agencies. There are two chapters of bankruptcy and both are designed with consumers in mind.

According to a recent article by Moneyrates.com, the credit card companies have been putting on a full-court press to lock up as many consumers as possible. They are shooting television commercials with high-priced celebrities, doing mailings and increasing Internet advertising to lure in consumers.

Here are some examples of recent "deals" the companies have been using:

American Express offered 20 percent discounts when making purchases on Nov. 26 from certain businesses.

Bank of America pays 2 percent cash back on groceries, 3 percent on gas up to $1,500 every three months. Its Upromise card offers 11 percent cash back for college when shopping through Upromise.com.

Chase and Citibank are both paying new credit card holders $200 after they put $500 on their card.

Capital One has a card that offers 1 percent cash back on day-to-day shopping and a 50 percent bonus on earned cash on top of a one-time $100 bonus.

Discover offers a card with 0 percent interest for 15 months and you get 5 percent back on up to $300 spent.

While the flashy perks may be enticing, don't forget the basics. Read the fine print, find out what the interest rate will be after the introductory rates wear off and do your research. As stated earlier, credit card companies aren't in business to give away money. It's unlikely a consumer can profit from their credit card, so all the promises of perks and cash back are likely just a show. Proceed with caution.

Jobs in Modesto Up in November, But Many Still Seeking Bankruptcy Protection

Fri, 09 Dec 2011 09:02:28 -0800

Finally some good news on the economy.

CNNMoney reports that in November, the unemployment rate dropped to 8.6 percent, the lowest rate since March 2009. In that month, a net of 120,000 jobs were created.

For many people in Modesto, while finding work is a great thing, a long time without a job has them in major debt. With few alternatives, many people have used credit cards to get by but are not getting ahead in paying off the debt. By making minimum payments or no payments, the consumer is put in a bad position.

This is when fees and high interest rates kick in, and companies continue to look for ways to keep consumers in debt with them. But for many, they have broken free from that downward spiral by considering bankruptcy in Modesto.

Credit card companies have used advertising campaigns and other means to make Americans believe that bankruptcy is a bad thing. That's because for them, it is bad. For consumers, it's good. Our Modesto bankruptcy lawyers know that consumers can benefit from these consumers laws.

Rather than toil in frustration, stress and debt, a consumer can shed the debt that has caused their life to be difficult and at the same time, shield themselves from creditors who are harassing them.

But for many, the new numbers mean they may be able to break free from that cycle. According to the CNN report, the decline in unemployment was better than some experts predicted. Some believed there would be about 110,000 jobs added. While the private sector added 140,000 jobs, government cut 20,000 jobs.

The jump in jobs is noticeable, though. In September and October combined, only 72,000 jobs were added. A majority of the November hires, not surprisingly, were in retail -- 50,000 and another 22,000 jobs in hospitality, like restaurants and hotels. But the U.S. Department of Labor reported that it adjusts its numbers to take into consideration seasonal trends.

Still, there is room for improvement. There are 13.3 million people who are unemployed and less than 1/3 of the 8.8 million jobs that have been lost in recent years have been recovered. Nearly half -- 43 percent -- of people looking for work have been doing so for more than six months.

This shows that many more people are still struggling. While the news is encouraging, it's only a start. For people who are still looking for work, they may have come to a point where there simply do not have any source of funds to pay their debts. They have sold assets, cut back on their lifestyle and still searched for work unsuccessfully. The bills have piled up and there is no way to pay.

For these people, filing for bankruptcy could be beneficial. Rather than dealing with creditors who call you every day, filing immediately stops them from calling. Most important, bankruptcy clears your debt and can also save your house from foreclosure in Modesto. If you are in a position of considering bankruptcy, set up a free consultation with a skilled Modesto bankruptcy lawyer today.

Black Friday is Good for Retailers, Bad For Modesto Consumers Who Get Trapped in Debt

Thu, 24 Nov 2011 07:31:51 -0800

By now you must have heard that stores are not only opening at midnight Friday, but some are even opening Thursday night to try to get a jump start on the competition.

Critics argue that by opening on Thanksgiving Day, the retailers are infringing on a holiday meant to be spent with family. Supporters say that many people incorporate shopping into their Thanksgiving holiday plans, so the earlier the better. Regardless, retailers are expecting huge numbers of shoppers Friday as the holiday shopping season is in full swing.

While many will be enticed to line up overnight or get a pre-dawn start Friday, a free-spending attitude can lead to major debt problems. The only winners in the holiday shopping season are the retailers and the credit card companies. If you've watched TV lately, you've noticed the increase in credit card advertisements. They are making a push to get people to use their cards. That's because they know people will overspend and their hidden fees and high interest rates will make them money, too.

Consumers must be careful because these predatory lending practices can cause people to have to consider bankruptcy in Modesto. For those who end up with thousands of dollars in unsecured debt such as credit card debt, bankruptcy may be the only way out.

Creditors are rarely willing to work with consumers to pay down debt. They would rather have it all. But filing for bankruptcy scares them because they know they could end up with very little. Hiring an experienced Modesto bankruptcy lawyer should be your first step if you've run into problems meeting debt obligations.

Bankruptcy is a complex process, but it can be extremely beneficial to those who use these laws to their advantage. For one, a person can clear up most or all of their debt by filing for bankruptcy. Under Chapter 7 bankruptcy in Modesto, a person can have unsecured debts cleared while possibly keeping all of their assets or having to give up a few in order to pay back some of the debt. Chapter 7 is designed for people who have little or no income.

Chapter 13 bankruptcy, however, allows people to keep their assets if they can make monthly payments over 3 to 5 years to pay back a portion of the debt. This is the least popular form of bankruptcy, but can help people who want to stay in their houses and keep their cars and other assets.

Either option may be appropriate, especially when shopping debt reaches high levels. The National Retail Federation estimates that 152 million people are expected to shop during the Black Friday weekend, a 10 percent jump from last year.

However, the organization is typically low on its estimates. Last year, it estimated 138 million shoppers and 212 million showed up to look for sales. Target, Best Buy, Kohl's and Macy's have all said they're opening at midnight Friday. Wal-Mart and Toys R Us have said they'll be open at 10 p.m. and 9 p.m., respectively, on Thursday.

Which Chapter of Bankruptcy in Modesto Is Right For You? 7 or 13?

Tue, 15 Nov 2011 07:24:19 -0800

A recent article out of St. Louis looks at the two personal bankruptcy options available to all Americans -- Chapter 7 bankruptcy and Chapter 13 bankruptcy..

Modesto bankruptcy lawyers will take a look at which form of bankruptcy could be appropriate for the average consumer struggling with debt. Whether choosing Chapter 7 bankruptcy or Chapter 13 bankruptcy in Modesto, the consumer can obtain debt relief.

Both forms allow for either all or a majority of a person's unsecured debt to be discharged after going through the bankruptcy process. So, both are beneficial. But there are requirements for qualifying that are based on a person's income and their individual situation. That's why consulting with an experienced Modesto bankruptcy lawyer should be your first step if you're considering bankruptcy.

Chapter 7 bankruptcy is the form that most people think of when they think of bankruptcy. This is where a person's debts are discharged and they may be called on to give up some of their possessions to sell and pay off debt. But that's not always the case. There are many situations where a person has few pricey assets or they owe more on them than they're worth and creditors aren't interested in them.

That means a person can keep their assets and still have their credit card, medical and other debt wiped clean. This is a form of bankruptcy considered for non-wage earners or people who have more debt than their income can reasonably satisfy. They are unable to pay their debts either because of job loss or are overwhelmed with debt.

According to statistics from the American Bankruptcy Institute, Chapter 7 bankruptcies consistently make up about 70 percent of personal bankruptcies nationwide.

In the first two quarters of 2011, they made up 71.3 and 72.32 percent of bankruptcies, respectively. In 2010, they peaked at 73.45 percent during the second quarter and going back a few years they made up as low as 57.45 percent in 2006. The number of bankruptcies has more than doubled from 597,965 in 2006 to 1,536,799 in 2010. Numbers for 2011 should be relatively close to 2010 numbers.

But studies have shown that Chapter 13 bankruptcies have become increasingly popular. In 2005, lawmakers changed the standards for filing for Chapter 7 bankruptcy, making it more difficult. Since then, some people have been forced to file Chapter 13 because they make too much money for Chapter 7.

This may be because people who make money, but whose houses are dragging them down, are looking at bankruptcy as a viable option. If people bought a house at the peak of housing prices only to see them crumble and currently are living in a house that is worth 1/4 of what they paid for it, they may allow it to go into foreclosure.

That could be a strategic decision or it could be because of job loss or job transfer. In these cases, it may be possible for the bank to come after the homeowner and seek a deficiency judgment, which means the bank attempts to get the homeowner to pay the difference between the mortgage amount and the sale price at auction after foreclosure.

For these people, perhaps Chapter 13 bankruptcy in Modesto fits best. Under Chapter 13, all debts aren't simply discharged like in Chapter 7. In this form of bankruptcy, the debtor must set up a payment plan, typically over a 3- to 5-year period. During this time, they make monthly payments to pay back some of the debt. The exact portion is determined on a case-by-case basis.

After the payments are made, the debt is considered discharged. While this may be more expensive, it guarantees that a person's assets remain intact. This includes a house, vehicles and other assets.

Deficiency Judgments On the Rise in Modesto, So Protect Yourself With Bankruptcy

Sun, 30 Oct 2011 07:04:21 -0800

A recent Wall Street Journal article reports that the number of deficiency judgments is on the rise as banks attempt to make as much money as they can after being hit hard with foreclosures.

A deficiency judgment is an order from a judge that authorizes the bank to go after the original homeowner for the difference between what the amount of the loan was and how much the foreclosure sold for at auction. For instance, if the bank gives a loan for $175,000 and the house slips into foreclosure and is sold at auction for $45,000, that means the bank can go after the original homeowner for the $130,000 difference.

For a person who just lost their home to foreclosure, a deficiency judgement notice is devastating. If they had the $130,000 to spare, they probably would have continued making payments. But, luckily, filing for bankruptcy in Modesto can wipe that judgment away.

Like other debts, home-related debt can be tossed out after completing the bankruptcy process in Modesto. Modesto bankruptcy lawyers have helped countless clients who have been put in a bad situation because of foreclosure. Whether it was a job loss, outstanding medical bills or other issues that led to money problems, bankruptcy can get you back on your feet.

The story looks at the case of a man who had a vacation home in Florida. When he lost his job, he lost his house to foreclosure last year. But recently, he got a call telling him he owed $193,000 -- the difference between what the house was sold for and what the original loan was. Because of a huge dip in prices in Florida, his house got only a quarter of what he paid for it at auction.

In California, luckily, there are strict laws about when deficiency judgements can be granted. They can't be granted in nonjudicial foreclosures and they are limited by fair market value of the property. But it can still happen. We have not yet seen banks play by rules in any regard.

Foreclosure defense lawyers are reporting that they are seeing a big spike in deficiency judgments as banks struggle to make up for the money lost to the millions of foreclosures nationwide. A Wall Street Journal report of several hundred deficiency judgments nationwide showed that the average debt was $100,000. It reports that 64 percent of the 4.5 million foreclosures since 2007 were in the 41 states that allow deficiency judgments.

While lenders won't say when they decide to attempt to get a deficiency judgment, it appears they are going after people who considered a strategic default by walking away from a house based on its loss of value rather than inability to pay.

Experts believe banks are more and more panicky with the influx of foreclosures that have taken over the real estate market. They are losing millions of dollars in bad loans. The article reports that investors have been looking at deficiency judgments as a money maker, taking over the judgments and going to bankruptcy court or through debt collectors to make back as much money as they can.

The bottom line is that bankruptcy can save a homeowner who has dealt with foreclosure from getting slammed with a deficiency judgement.

Modesto Bankruptcy Watch: Retirement and Bad Real Estate Debt

Tue, 25 Oct 2011 05:28:30 -0800

Two Georgia legislators recently introduced a bill in Washington D.C. that would allow people to pull money from their retirement accounts penalty free if they use it to pay for their mortgages, The Atlanta Journal-Constitution reports.

While this may be a well-meaning attempt to solve the mortgage crisis that has hammered our country, this by no means is a good idea.

Filing for bankruptcy in Modesto is a much smarter move if you are struggling to make mortgage payments.

Here's why. In bankruptcy, retirement funds are protected from creditors. Without money stored away for the future, you'll be robbing from your retirement in order to save a house that likely has lost its value. Even if a person wants to stay in their house, bankruptcy can help.

As Modesto bankruptcy lawyers have seen time and time again, people can file for bankruptcy and stay in their home during the process even if they've missed payments. They ften can stay in their home with a modified payment plan after bankruptcy has ended.

Or, after all their debts have been discharged, they can be debt free and can start a new life without credit card balances or other debt. It makes much more sense to go that route that throw away whatever long-term savings you have.

Sen. Johnny Isakson and Rep. Tom Graves have said they believe their bills would help people stay in their homes in these difficult economic times.

Isakson said he doesn't think that the country will be able to recover financially until the housing market turns around. He said he believes the legislation would reduce foreclosures and "stabilize home values."

Graves said many Americans who have saved up for retirement are now out of work and the current tax laws don't allow for withdrawals without paying a 10 percent penalty. The law, he said, would quash that penalty for those using the money for their houses. He believes this will cut down on late payments, foreclosures and help boost the economy.

Maybe this would help the economy and it would be fine to have that option available, but tossing away your retirement to save a house can't be a strong consideration for most people. A house is a necessity, but so is having the money stored away for food, medical care and other cost-of-living expenses when you can no longer work.

While the economy is bad and jobs are scarce, being at an age where a person can still work makes it a lot easier to one day build a secure retirement. For older consumers who can no longer earn a paycheck, tossing away your savings is not a smart plan. It would be better to lose a house, get rid of existing debt through bankruptcy in Modesto and start to repair your credit without touching your retirement accounts.