Fong Law Group

Will I Lose My Home If I File Chapter 7 Bankruptcy?

You may not lose the property if you apply for Chapter 7 bankruptcy provided you don't have considerable home value and the payment is due. Most of the users who claim Chapter 7 bankruptcy are allowed to have their possessions. If you are struggling financially, though, you may choose to take a different approach to bankruptcy, like declaring Chapter 13 bankruptcy.

If you're considering Chapter 7 bankruptcy and seem to be concerned about losing your home in Monterey Park, California and surrounding areas, It is best to call a lawyer at Fong Law Group so we can assist you, and point you in the right direction for the options that are available for you.

Home and Bankruptcy

If you're behind with the payments, Chapter 7 will not assist you to retain your house. If you're behind on your payments or on the verge of losing your home, Chapter 7 won't help you. So, until you can work out a deal with the lender separate from the bankruptcy, you're likely to lose the home. When this happens, there are other options such as Chapter 13 bankruptcy; this is why it is best to call an attorney that can discuss all your options so you can keep your house.  

Will My House Be Sold by a Bankruptcy Trustee?

If you do not have equity in the home as collateral or can exclude (protect) the property utilizing the homestead claim, you can protect the house in Chapter 7 bankruptcy. The trustee designated to handle the case will not sell it since there will be no money to give to the debt holders if there is no available equity.

However, this does not indicate that you will be able to maintain the house. Whenever you declare bankruptcy, you should be current on all payments, and you should be able to keep current in the future. You fear losing the home to foreclosure if you don't during a Chapter 7. If you are behind on payments, a Chapter 13 might be the right option for you, this is why it is essential to speak with a lawyer so they can advise you. 

Does Bankruptcy Chapter 7 Assist with Foreclosure?

Although Chapter 7 bankruptcy may offer temporary protection from foreclosure, it will not assist you in keeping your house. It lacks a means for paying off debts or effectively stopping the foreclosure process.

Consider the below mentioned methods:

• Before filing for bankruptcy, try to work out a deal with the lender. If you are behind in your mortgage payments, you may be able to negotiate a settlement with your borrower, informally or via a more official mortgage work, in which the creditor offers to renegotiate the repayment schedule by restructuring or altering the loan. If you pursue this route, make sure you finish the mortgage modification process before filing chapter 7 bankruptcies. Otherwise, any continuing conversations will almost certainly be disrupted by the bankruptcy. (In Foreclosure, you will discover data on lender negotiations and home loans.) 
• Take Chapter 13 bankruptcy as an example. In this, you may save the house if you have not paid the installments and now have sufficient money to keep pace on the loan arrearage with time. The automatic stay once you file bankruptcy stops the lender from proceeding with foreclosure procedures after you file bankruptcy.

Call Fong Law Group at (626) 289-8299 for a FREE consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

Will Bankruptcy Get Rid of Lawsuit Judgments?

Judgements are court decrees that state you owe the creditors money. If you do not pay the bills on time, the creditors may seek to take your private possessions or take your salary to settle the debt. You can contact Fong Law Group if you live in Monterey Park California and surrounding areas to go over your options to prevent or stop a judgement.

Is It Possible to File for Bankruptcy If You Have Judgments?

Because a judgment may have such a negative impact on the credit score, many individuals question if there is a method to get it cleared up. Many professionals would advise you to file for lawsuits, but does it clear all of your debts?

You will be free of all obligations or debts owed to creditors if you file for bankruptcy. However, if a judgement has been entered and a mortgage has been charged, bankruptcy would not be able to eliminate the lien.

You can get some claims on the property dismissed by asking the lawyer to file a petition with the court. However, it is preferable to cope with bankruptcy lawsuits before they become a lien on the property.

Most Bankruptcy Lawsuits will be Discharged If You File for Bankruptcy

Unpaid debts account for the most court judgments against bankruptcy creditors. The lender can sue you for the violation if you don't repay the personal loans, hospital expenses, or other secured loans. If the lender gets a judgment, they have the option of garnishing your earnings or seizing your property to pay the debt, depending on what type of debt it is.

Fortunately, declaring bankruptcy can halt the seizure and eliminate the debt repayment obligations. If a dispute is still ongoing, an automatic stay imposed by the bankruptcy may prohibit it from proceeding. Even though the case ended in a judgment, if the debt is eligible for dismissal, bankruptcy will remove the liability. However, if the judgment is for a non-dischargeable liability, bankruptcy may not be able to discharge it.

Bankruptcy Judgements

If a lender has issued you with bankruptcy lawsuits but it hasn't come to judgement yet, contact a bankruptcy lawyer as soon as possible. Bankruptcy may be able to stop the lawsuit and immediately eliminate the loan, sparing you effort and money.

Is this a Non dischargeable Bankruptcy Judgment?

Start by evaluating whether the liability is Non dischargeable while considering if bankruptcy will erase a judgment. The following are examples of non-dischargeable debts:

• Loans for students (with exceptions)
• Obligations for child benefit or spousal assistance
• Fines, royalties, court expenses, and other payments payable to government agencies
• Driving while inebriated results in mortality

Don't think you're out of the woods if the decision isn't in the Non dischargeable group. Other forms of debts, like liabilities tied to fraud, may be non-dischargeable when the collector objects.

Is it Possible to Prevent a Judgment Levy in Bankruptcy?

If the borrower's claim is still linked to the assets, like your home, getting a bankruptcy clearance will provide little relief. If the mortgage is still in place, the lender will have the option of selling the property once the bankruptcy process is completed or waiting till you sell it to claim its portion.

Call Fong Law Group at (626) 289-8299 for a FREE consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

What Are Advantages of Filing Bankruptcy?

Filing bankruptcy offers a solution to businesses and individuals to get rid of the financial difficulties if they cannot pay their debts. Thus, they can begin rebuilding the credits, thereby living life in a financially stable and positive way.

Though it will have an impact on the finances of the individual for several years to come, it comes with its own set of pros owing to which people prefer to file bankruptcy. There are a wide array of advantages of bankruptcy in Monterey Park, California, and surrounding areas:

Automated stay against the creditors

As you file bankruptcy, the court will release a stay against all kinds of debt collection activities against you. Though it will not cancel all the debts, it will be useful in suspending all kinds of debt collection proceedings till the bankruptcy case gets completed.

Hence, you do not need to lose your night's sleep over dreaded collection calls, letters, and emails from the debt collectors, property repossession, home mortgage foreclosures, wage garnishments, lawsuits upon the debts.

Helps in clearing a lot of debt

Another reason why a wide assortment of people prefers to declare bankruptcy is because they lend a helping hand in discharging unsecured and eligible debts, so you will be capable of managing the loans on a wide scale. So, you are going to have extra relief and time from the debt collection team to clear the utility payments, mortgage, and other debts without causing too many hurdles.

In addition, it allows you to fold the car payments into the repayment plan. Hence, you can be ensured that your property is not going into repossession. The best part is that you will get another chance to make your current payments and get rid of the debts completely.

Freedom from different debts

Through bankruptcy, you will be capable of wiping out a variety of debts, such as medical bills, credit card debts, civil judgments, personal loans, past-due utility bills, past-due rent, business debts, and certain tax debts.

Few of the debts, which cannot be erased even after filing bankruptcy, are the child support and the latest tax debts. Although it is not possible to discharge a few of the troublesome debts, it will give you the opportunity to repay the rest easily.

Gives you a new fresh start

After those dreadful calls from the debt collector, a vast assortment of clients looks for a fresh financial start. Hence, they will have the opportunity to live life without the need to worry about debt after filing bankruptcy. Hence, you do not need to worry or fear every time your phone rings, or you open the email. It also gives the option to recognize the financial affairs so that you can rebuild the credit.

In a nutshell, bankruptcy gives you peace of mind so that you can manage your finances effectively. According to bankruptcy law, the person filing bankruptcy will receive credit education. Hence, they can look back at the history and reset the credit and financial course. If you are successful in reaping benefits from bankruptcy, you will be capable of handling the finances in a more secure way than before. You can reach out to Fong Law Group in Monterey Park California and surrounding areas if you want to file bankruptcy.

Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

Do I Have Enough Debt to File for Bankruptcy?

To apply for bankruptcy relief, you do not need to have a certain amount of debt. Whereas the amount of the debt is essential, there are much more crucial aspects to consider when deciding whether or not bankruptcy is already in your best interests.

 

Factors Which Will Assist You In Deciding Whether Or Not To File For Bankruptcy

One of the most crucial decisions you'll have to undertake in your financial future is whether or not to file for bankruptcy. Note that, aside from either the sorts of debt you have accumulated, when you will apply for bankruptcy is mostly determined by the circumstances.

The following are some of the things to think about while filing for bankruptcy:

Unsecured debts: If your debts are primarily unsecured, you can petition for bankruptcy. The level of debt doesn't matter when filing bankruptcy since there is no minimum debt. Credit card debt, medical costs, cash advance (payday) loans are instances of unsecured debts.

Secured debts: Whether you are overdue on a mortgage or auto payment, bankruptcy might be the best option for you. You'll be able to keep your home and have 3-5 years to make up the missed payments, sometimes at a much lower interest rate.

Employment situation: If you are unemployed as well as having difficulties making the payments, you may be able to file for bankruptcy and have some of the unsecured debts discharged. You could either stay current on the secured debts or use a Chapter 13 bankruptcy to catch up on such payments. Similarly, when you are employed but still unable to meet the debt obligations, required to file for Chapter 7 or Chapter 13 bankruptcy can allow you to keep the assets (house as well as car) while also freeing up cash to pay them off by preventing or minimizing payments on medical bills, credit cards, and other unsecured debts.

Paying bankruptcy legal expenses: To receive a debt discharge, you must pay court costs like the attorney fees, filing fee, as well as education classes. Note that filing bankruptcy will not wipe out any of these expenses. Nevertheless, these expenses are insignificant when compared to the money saved on prospective debt payments, which continue to rise due to interest plus late fees.

When Should You File For Bankruptcy Under Chapter 7 and Chapter 13?

Requirements for filing history: The length of time you must serve is determined by the kind of bankruptcy you choose and the conditions of the earlier dismissal.

Minimum monthly income: To be eligible for Chapter 7 bankruptcy, you must satisfy the Chapter 7 Means Test, which compares your income to other families of similar size in the state.

Other debt criteria that be acceptable: Payday loans, as well as credit card bills, are examples of unsecured obligations that can be dismissed in bankruptcy. Whenever you are "underwater," you could also discharge debts from such a car or residence that you no longer want.

Conclusion

In order to file bankruptcy, debtors don't need to have a certain amount of debt. Whether to declare bankruptcy and whether it is the best option for you largely is based on the unique situation.

Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

What is the Bankruptcy Means Test?

The Means Test is an income qualification tool used to determine if you are allowed to file a Chapter 7 bankruptcy or if you must file a Chapter 13 bankruptcy. Individuals with more than a certain income must file a Chapter 13 bankruptcy. A Means Test can determine who can file for Chapter 7 bankruptcy.

The Formula

The law now uses a standard mathematical formula to determine whether you can file for Chapter 7 — or, to put it in legal terms, whether filing for Chapter 7 would be an 'abuse' of the bankruptcy system. (Those who fail the means test are left with a Chapter 13 repayment plan as their only bankruptcy option.)

The bankruptcy means test is actually a two-part test and you only need to pass one of them to qualify for Chapter 7.

Test 1 - "Median Income"

This is a very simple test that compares your average household income for the past six calendar months to the median income for your state, if your income is below the median, you qualify for Chapter 7. If it is above the median, you must pass Test 2.

Test 2 - "Disposable Income"

This test deducts expenses from your income to determine how much you can pay your unsecured creditors over the next five years: for example (this example is just an example, each county and state is different);

• If you can pay at least $10,000 ($167 per month), you can't file for Chapter 7.
• If you can pay at least $6,000 ($100 per month) and that is at least 25% of what you currently owe your unsecured creditors, you can't file for Chapter 7.
• If your disposable income is less than $100 per month, you can file for Chapter 7.

Certain deductions are standard allowances based on the number of vehicles you operate, the number of people in your household, and the cost of living. Depending on which county you live in California, the amounts may change but the method of calculation will not.

In addition, to these standard deductions, you can also deduct the full amount of certain actual expenses such as mortgage and vehicle loan payments.

 

Are You Ready?

Contact Fong Law Group today for a free consultation at (626) 289-8299, and we will help determine which type of bankruptcy you qualify for.

Debt Relief and Bankruptcy

Are You Struggling and Stressed Because You Have Too Much Debt?

 

Perhaps you have missed a mortgage or car payment or simply cannot keep up with credit card bills. You may be receiving threatening collection calls or facing a lawsuit, and are afraid every time your phone rings. You are far from alone. Solid, hardworking people throughout the country have these same problems.

We live in times that we are offered credit everywhere, whether it is with credit cards, home loans, car loans, gas cards and store credit cards, making it very easy to get buried in debt. While we are opening up credit in all these places, sometimes bad things happen to good people, and we lose a job, are injured, or just over extend ourselves.

Many people have enough money to make monthly payments on these debts at the time they incur them. Sometimes, though, the random incidents in life get in the way. When you live paycheck to paycheck, one shift in your everyday life can have a severe impact on your finances. Suddenly, the bills you could just barely keep up with have become impossible burdens.

If you are in a situation where you are in need of debt relief, contact Fong Law Group. We have experience with all forms of debt, including:

• Credit Card Debt
• Foreclosures
• Student Loans
• Unpaid Taxes
• Vehicle Loans
• Wage Garnishment

Determining the Best Course of Action

We will be able to evaluate each form of debt that you have to determine the best course of action. You may need to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, but we are here to help you through this difficult time and get you back on the road to recovery and a fresh start.

If you are facing overwhelming debt and harassing telephone calls from debtors, contact Fong Law Group today for a free consultation at (626) 289-8299.

Reverse Mortgages: A Way to Remain at Home Longer

Under our "system" of paying for long-term care, you may be able to qualify for Medicaid to pay for nursing home care, but in most states there's little public assistance for home care. Most people want to stay at home as long as possible, but few can afford the high cost of home care for very long. One solution is to tap into the equity built up in your home.

If you own a home and are at least 62 years old, you may be able to quickly get money to pay for long-term care (or anything else) by taking out a reverse mortgage. Reverse mortgages, financial arrangements designed specifically for older homeowners, are a way of borrowing that transforms the equity in a home into liquid cash without having to either move or make regular loan repayments. They permit house-rich but cash-poor elders to use their housing equity to, for example, pay for home care while they remain in the home, or for nursing home care later on. The loans do not have to be repaid until the last surviving borrower dies, sells the home or permanently moves out. (Warning: If both spouses are not on the reverse mortgage deed and the spouse who is on the deed dies first, the surviving spouse would be required to repay the mortgage loan in full or face eviction.)

In a reverse mortgage, the homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the age of the borrower, and current interest rates. The lower the interest rate and the older the borrower, the more that can be borrowed. To find out how much you can get for your house, use a reverse mortgage loan calculator.

Homeowners can get the money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn on at the borrower's option, or in a series of regular payments, called a "reverse annuity mortgage." The most popular choice is the line of credit because it allows a borrower to decide when he or she needs the money and how much. Moreover, no interest is charged on the untapped balance of the loan. 

Although it is often assumed that an elderly person would want to use the funds from a reverse mortgage loan for health care, there are no restrictions--the funds can be used in any way. For instance, the loan could be used to pay back taxes, for house repairs, or to retrofit a home to make it handicapped-accessible.

Borrowers who take out a reverse mortgage still own their home. What is owed to the lender -- and usually paid by the borrower's estate -- is the money ultimately received over the course of the loan, plus interest. In addition, the repayment amount cannot exceed the value of the borrower's home at the time the loan is repaid. All borrowers must be at least 62 years of age to qualify for most reverse mortgages. In addition, a reverse mortgage cannot be taken out if there is prior debt against the home. Thus, either the old mortgage must be paid off before taking out a reverse mortgage or some of the proceeds from the reverse mortgage used to retire the old debt.

The most widely available reverse mortgage product -- and the source of the largest cash advances -- is the Home Equity Conversion Mortgage (HECM), the only reverse mortgage program insured by the Federal Housing Administration (FHA). However, the FHA sets a ceiling on the amount that can be borrowed against a single-family house, which is determined on a county-by-county basis. High-end borrowers must look to the proprietary reverse mortgage market, which imposes no loan limits. The national limit on the amount a homeowner can borrow is $765,600. 

Reverse mortgages are not right for everyone. Consult with your attorney about whether a reverse mortgage fits into your long-term care planning.

How to Be Smart about an Inheritance

“If you were to receive a sizable inheritance, what should you do with it? This money could help you achieve some of your important financial goals , so you’ll want to think carefully about your choices.”

While there’s no one way that is right for everyone, there are some basic considerations about receiving a large inheritance that apply to almost anyone. According to the article “What should you do with an inheritance?” from The Rogersville Review, the size of the inheritance could make it possible for you to move up your retirement date. Just be mindful that it is very easy to spend large amounts of money very quickly, especially if this is a new experience.

Here are some ways to consider using an inheritance:

Get rid of your debt load. Car loans, credit cards and most school loans are at higher rates than you can get from any investments. Therefore, it makes sense to use at least some of your inheritance to get rid of this expensive debt. Some people believe that it’s best to not have a mortgage, since now there are limits to deductions. You may not want to pay off a mortgage, since you’ll have less flexibility if you need cash.

Contribute more to retirement accounts. If the inheritance gives you a little breathing room in your regular budget, it’s a good idea to increase your contributions to an employer-sponsored 401(k) or another plan, as well as to your personal IRA. Remember that this money grows tax-free and it is possible you’ll need it.

Start college funding. If your financial plan includes helping children or even grandchildren attend college, you could use an inheritance to open a 529 account. This gives you tax benefits and considerable flexibility in distributing the money. Every state has a 529 account program and it’s easy to open an account.

Create or reinforce an emergency fund. A recent survey found that most Americans don’t have emergency funds. Therefore, a bill for more than $400 would be difficult for them to pay. Use your inheritance to create an emergency fund, which should have six to 12 months’ worth of living expenses. Put the money into a liquid, low-risk account, so that you can access it easily if necessary. This way you don’t tap into long-term funds.

Review your estate plan. Anytime you have a large life event, like the death of a parent or an inheritance, it’s time to review your estate plan. Depending upon the size of the estate, there may be some tax liabilities you’ll need to deal with. You may also want to set some of the assets aside in trust for children or grandchildren. Your estate planning attorney will be able to provide you with experienced counsel on the use of the inheritance for you and future generations.

Reference: The Rogersville Review (March 21, 2019) “What should you do with an inheritance?”

Due Diligence Needed, If Retirement Depends on Inheritance, Selling Business

“I am 60 years old, divorced and have never taken an active interest in my finances. I’ve never worried about saving for retirement. I felt that when I retired, I’d be able to sell my business and that along with the inheritance I would receive from my parents, I would be in good shape.”

The first sentence in this article from Hometown Life, “Playing off charge card debt a major priority,” tells the entire story: “I…have never taken an active interest in my finances.” The person never had his business evaluated by a professional and learned at age 60 that his business had no resale value. In addition, he learned that his parents were supporting a sister and any inheritance he was anticipating would not be enough to live on.

Making matters worse, he has more than $80,000 in credit card debt on various cards, at interest rates between 18% and 21%. With next to no equity in his home and a home equity loan and a mortgage, this person has only one asset: an IRA worth around $100,000.

At some point in their lives, most people realize that they must be active participants in their financial lives. They need a budget to contain spending and a savings plan, so they can enjoy their retirement and control of their credit card debt. It sounds like this man just got a wake-up call.

He wonders how to resolve his credit card debt, but it seems there are a number of other issues that need to be addressed.

First, he should pay off his credit card debt. At 18% to 21%, there is no investment he could make that would come near that rate. One way to do this, is to increase his monthly payments. It may take many years to knock down such a large debt, so another option is to use his IRA to pay off the money immediately.

Equally important is for him to commit to use the money he would have otherwise used to pay off credit card debt and invest that into a retirement fund. It doesn’t matter if he uses an IRA, a SEP or a Roth, but he needs to be disciplined and start putting money away for his retirement.

Potential inheritances are troublesome for people who count their chickens before they hatch. Until the inheritance is safely in your own bank account, you cannot count on it. In a time where living expenses are high and people are living longer, fewer and fewer people are expecting to receive inheritances. Basing a lifestyle around an expected inheritance, can only lead to financial disaster.

Preparing for retirement and taking an active role in managing your finances, is a life-long task and part of our responsibility as adults. Another responsibility is to have an estate plan in place, so even people who die in debt, can be assured that what assets they do have will go to their heirs.

Reference: Hometown Life (March 3, 2019) “Playing off charge card debt a major priority”

Facing the Worst News and Preparing for the Inevitable

“A bad medical diagnosis can make a person realize that he suddenly has far less time to get his affairs in order. What’s the best way to leave assets to your heirs? Should you pay off your mortgage?”

Receiving a terrifying medical diagnosis of a fatal illness, can leave you and your loved ones stunned and afraid. Once the initial shock has subsided and you have put the emotional and medical resources in place, it will be necessary to address the legal aspects, according to a recent article from CNBC titled “When end-of-life planning is suddenly a lot closer than you thought.”

Start by assembling all your financial information in one place. An old-school, loose-leaf binder may be easier for your family, depending on their comfort level with technology. If your family is accustomed to online portals where information is stored, consider the emotional state of shock they will be in. Make it as easy and accessible as possible for you and them.

The information should include your Social Security benefits and pension information. There may be survivor benefits that your family will need to know about.

Include the prior year’s tax returns and a note, as to where your other tax returns can be found.

If you don’t have a will, power of attorney, healthcare directive or any estate planning legal documents in place,  it is now the time to make an appointment with an estate planning attorney.

Another task will be to designate beneficiaries for any financial accounts and insurance policies. Depending on your brokerage house, you may be able to attach a transfer-on-death instruction to your non-retirement accounts.

You can do the same thing with real estate in 27 states. An estate planning attorney will know if this is applicable to your state.

Next, make a list of your liabilities. It should include your mortgage, car loans and credit card debt.

Create a contact list for your family that includes your estate planning attorney, CPA, financial advisor and insurance agent.

Should you pay off your mortgage? This might not always be the best move. Consider the funds available, your tax bracket and the current mortgage. Do you want a family member to be able to live in the house? Your estate planning attorney will be able to run through different scenarios and strategies.

Write a legacy letter. This is not a legal document but a letter that will express your intentions for your will and your wishes for personal property. If it’s not too hard, it is also a place where you can share your wishes for your funeral arrangements.

Reference: CNBC (July 18, 2018) “When end-of-life planning is suddenly a lot closer than you thought.”