Modesto Bankruptcy Lawyer Blog

The Sacramento Bee recently chronicled the experiences of two couples struggling with credit card debt. Both couples used a debt solutions company and took more than five years to pay off their debts. Evaluating your options is recommended before you sign on with any agency claiming to make you debt-free.

Contacting a bankruptcy lawyer in Modesto could have given these couples a fresh start much sooner.

Most people think of bankruptcy as something to be ashamed of, but it's not. Consumers that have fallen on hard times because of medical bills, real estate debt and credit card debt deserve a new start. An experienced bankruptcy lawyer can explain the two types of bankruptcy options a consumer has. One can wipe out most of your debts immediately so you can start anew. Credit counseling, which won't save your credit rating, is another option. Your credit report will show late payments that will stay on the report for years. This will greatly affect your ability to obtain loans.

The state Department of Corporations keeps on eye on the credit counseling agencies in California.

Here are some cautionary tips and red flags regarding credit counseling agencies:

-Considerable upfront fees - most places charge you a set-up fee and then add on additional fees.

-Misplaced or diverted payments - some companies won't tell you your first month's payments are actually fees. So your money going to the credit counseling company and not your creditors. Missed payments mean bad marks on your credit report, which will last for years.

-Idealistic promises - no company will wipe out your debt for free without damaging your credit rating. Supervised payment plans involve systematically paying off your loans.

-No accreditation - agencies that aren't accredited by the National Foundation for Credit Counseling and/or Association of Independent Consumer Credit Counseling Agencies should be avoided. Accredited credit counseling agencies meet minimum standards for free or low-cost confidential services.

Bankruptcy laws give legal protection that most other debt-relief options don't; personal bankruptcy shouldn't be viewed as a last resort, but as a new beginning. Your own situation will determine if bankruptcy is the right choice for you. Let an experienced bankruptcy lawyer assess your financial needs and explain your options.

Continue reading "Those Considering Debt Solution Agency should speak with Modesto Bankruptcy Attorney " »

A new lawsuit, filed in a California federal court seeking class action status, accuses credit score company Experian of falsely marketing its credit report and credit monitoring services.

The Red Tape Chronicles reports that California consumers are often being defrauded in their search for a credit report. The suit accuses Experian of intentionally confusing costumers through false advertising and failure to provide customers with the service they pay for. Experian operates the popular sites FreeCreditReport.com and FreeCreditScore.com.

"It's a classic consumer fraud case," said David Woodward, one of the lawyers who filed the case. "The law is designed to prohibit exactly this kind of egregious advertising practice. ... The defendant is profiting from deception."

A Modesto bankruptcy lawyer should be quick to inform you that many aspects can affect your credit score: credit cards, bad debt, medical bills, foreclosures. By law, you are allowed one free report from each credit report agency each year. As freecreditreport.com is not a bad service for those who are trying to rehab their credit, it is also not a necessary service.

Late payments have trashed the credit ratings of most consumers by the time they seek bankruptcy protection. In many cases, they may also have been preyed upon by credit counseling or debt management services. Consulting a bankruptcy attorney is the best course of action for getting your financial house in order.

Credit report companies, including TransUnion, Equifax and Experian, are producing credit scores with the formula from FICO. Those scores are then reported to lenders. The federal suit, filed against Experian, accuses the company of fraud because the Experian PLUS score is not the same score shown to lenders.

The Federal Foundation for Credit Counseling offers answers to some FAQ's about bankruptcy and debt:

-Can I be terminated from my job for filing for bankruptcy? The Bankruptcy Code typically prohibits termination, or discrimination, because an employee has not paid a discharged debt, filed a bankruptcy case or has been insolvent before the case was filed.

-Is professional credit counseling for me and worthwhile? If your credit is going down the tubes and you're looking to try and solve the problem, then professional credit counseling could be for you. Professional credit counselors can offer you knowledgeable advice on how to repair your credit. They can also provide you with help because they are familiar with what kinds of habits and patterns to look for in a suffering client. However, you may also expose yourself to predatory companies that charge high fees for "counseling services." And if your overall problem is an insurmountable level of debt, these agencies may not be able to help you get your financial house in order.

-Am I able to keep my credit cards after filing for bankruptcy? Typically no, unless you don't file bankruptcy on a given card. Then you may keep the card -- however the company may close the account anyway. Typically, clients are able to reestablish a good payment history through secured and non-secured credit cards within a few years.

-Will I need to hire an attorney to file for bankruptcy? While you are not required to be represented by an attorney, is it highly recommended as they can provide you with advice to help you understand your rights and the consequences of your bankruptcy case.

Continue reading "Credit Report Lawsuit Illustrates Risk of Predatory Services when Dealing with Bankruptcy in Modesto" »

Lenny "Nails" Dykstra, former Mets and Philadelphia Phillies outfielder, is accused by federal authorities of bankruptcy fraud after he allegedly removed items from his $18 million California home, without trustee consent. He is also facing charges of Grand Theft for allegedly buying vehicles through fraudulent means, according to Fox Business. He was arrested late last week.

Dykstra filed for bankruptcy back in 2009 and is accused of destroying and selling property, without consent from the bankruptcy trustee, that was part of his bankruptcy in California. The former baseball star bought his home from hockey star Wayne Gretzky for $18.5 million.

While bankruptcies can be filed without a lawyer, it is a federal court case and can be much more complicated than many realize. A Modesto bankruptcy lawyer can help make sure you stay on the right side of the law. As importantly, you will be unable to file bankruptcy for years after your case is disposed -- failing to include a creditor in a bankruptcy filing can also be devastating.

Dykstra was held on a $500,000 bail. The items he allegedly sold from his bankruptcy estate included various memorabilia and furniture. He's also accused of ripping out a $50,000 oven and cooktop after he filed for bankruptcy protection, according to the Las Angeles Times.

"The federal charges stem from a bankruptcy case that Dykstra filed on July 7, 2009," the statement said. "The criminal case filed in U.S. District Court alleges that Dykstra removed, destroyed and sold property that was part of the bankruptcy estate without the permission of the bankruptcy trustee.

Accusations are that Dykstra removed, without consent, more than $400,000 from the estate. If convicted of the charges filed by the Department of Justice, Dykstra could do up to five years in a federal prison.

Dealing with a less than reputable attorney or taking on the system alone can often make matters much worse. It is also important to be truthful about your situation, don't try to lie to the courts or falsely file for bankruptcy, which can result in additional legal problems.

Continue reading " Lenny "Nails" Dykstra Arrested and Charged with Grand Theft and Bankruptcy Fraud in California" »

California Attorney General Jerry Brown is calling Roni Lynn Deutch, the self-proclaimed "Tax Lady," a fraud. Brown and the state of California are suing Deutch and her firm, alleging that the 46-year-old defrauded thousands of clients out of a total of $34 million. The suit demands that Deutch return the money to her clients and also put an immediate stop to all advertising, the very vehicle that has made her so famous. Her office estimates she spends more than $3 million per year on advertising campaigns.

Brown says that Deutch's promises to rid people of their IRS problems were completely false, and that her firm's rates of up to $4,700 per client usually did little to help deliver relief to clients with tax problems. Brown's office claims that barely 10% of Deutch's clients ever had their IRS debts successfully resolved. Further, the suit says, when customers did demand their money back, the firm would show them trumped up billing statements with inflated hours to justify the amount of money spent, rarely ever refunding money to clients.

When you're facing IRS problems, bankruptcy and outstanding debt, it pays to hire a professional lawyer who can give you one-on-one attention for your case. Lawyers are responsible for looking out for your best interests and if you're already in financial trouble, the last thing you need is a lawyer who is only going to take your money and run. Be sure to check out any lawyer you're interested in using on the American Bar Association website or through other clients who have used their services.

Many Modesto residents are currently going through or considering Chapter 7 or Chapter 13 bankruptcy. While bankruptcy can be a huge relief for many people, it is not a process to be taken lightly. In Louisville, a federal bankruptcy judge recently froze the assets of a local businessman after allegations that he fraudulently transferred funds to his ex-wife in order to hide his assets from the court.

Randall Waldman was slapped with a $3.2 million judgment back in October of 2009 for defrauding a tool company owner, Ronald Stone. After that judgment, Stone's lawyers alleged that Waldman had his lawyer switch his two roofing businesses into his ex-wife's name in an attempt to hide his assets. He now faces even larger fines and possible jail time. His lawyer also faces disbarment if the allegations are true.

Bankruptcy is a Serious Matter
It simply doesn't pay to try to defraud the court system when it comes to filing for bankruptcy. If you're having financial difficulties, you don't have to go it alone. Contact a bankruptcy lawyer in Modesto who can help you examine your options for Chapter 13 and Chapter 7 bankruptcy.

Only a qualified lawyer can tell you what your choices are and what a court will and will not allow. Taking matters into your own hands or dealing with a less than reputable attorney can often make matters much worse. Never try to lie to the courts or falsely file for bankruptcy.

On April 30, 2010, the U.S. Bankruptcy Court (Central California Division) updated the following bankruptcy code on its website:

"LBR form F 2090-1.2.APPLICATION was modified to require the applicant to attach a copy of the receipt for payment of fees, as required under LBR 2090-1(b)(5), to the application."

To the average person, this sentence sounds like gibberish, right? But to a qualified bankruptcy lawyer in Modesto, this phrase is everyday language. A lawyer knows that even the smallest changes to bankruptcy code in California are critically important. The Bankruptcy Act of 2005 overhauled the federal bankruptcy code, but subsequent, smaller, more recent changes at the state level are just as crucial. A lawyer must stay current on all the bankruptcy laws at both a state and federal level in order to provide superior service and results that clients desire.

One of the primary advantages to hiring a bankruptcy lawyer for Chapter 7, Chapter 11 and Chapter 13 bankruptcy cases is that you can rest assured that your case is being filed accurately and efficiently. Doing it on your own could result in disqualification of your application, denial or worse.

Another advantage of hiring a professional bankruptcy lawyer is that you can get all your questions answered regarding your mortgage, your credit score, your outstanding debts and more. If you try to file for bankruptcy on your own, you will most likely have dozens of questions for which you may not be able to secure verifiable answers.

What's more, it can be tough enough for a lawyer to keep up with assets, creditor claims, court-appointed trustees, deadlines and funds allocations associated with filing for bankruptcy - do you really feel qualified to handle all this and more on your own? It's much better to simply hire a lawyer to save yourself time and money when filing for bankruptcy.

In 2005, the Bankruptcy Abuse Protection and Consumer Protection Act (BAPCPA) drastically changed the way that bankruptcy proceedings occur in the United States. According to the Department of Justice's U.S. Trustee Program website, one of the most significant changes in this act includes a requirement of certifying entities to provide credit counseling to people who file for Chapter 7 and Chapter 13 bankruptcy.

Under the BAPCPA's new regulations, consumers who wish to file for bankruptcy must attend credit counseling education within the six months prior to their filing date. The U.S. Trustee website provides an approved list of credit counseling centers nationwide so that you can select a nonprofit center near you. The agency you select must be on this list in order to satisfy the credit counseling requirement set forth by BAPCPA.

What is Credit Counseling?
Credit counseling is an educational meeting that can be completed in person, via the telephone and even on the Internet. During your credit counseling session, a qualified counselor will evaluate your personal finances (and those of your spouse, if filing jointly), discuss possible alternatives to bankruptcy and help you create a personal budget and debt reduction plan. Upon completion, you'll receive a certificate of proof that must be included at the time of bankruptcy filing.

After you file for bankruptcy, federal law also requires that you complete additional financial education/certification before your debts will be permanently discharged. It is important to note that your bankruptcy case can be thrown out without proper credit counseling certification. If you are unclear on the process of credit counseling or simply need help filing for Chapter 7 or Chapter 13, a bankruptcy lawyer in Modesto can help you get on the right track to put your mind at ease and get you on the road to recovery.