Monday, January 31, 2011

Payday Loans & What You Should Know

I need to take a little detour here and talk about payday loans. If you have a steady job, a payday loan can get you through a short term money crunch, but there are a few things that you need to be aware of.

A payday loan is expensive. The interest on payday loans is quite high and the amount of time you have to pay it back is short, usually 18 days or less. Payday loan companies will determine the pay back date by the date your are to receive your next paycheck.

The amount you will be able to borrow will depend on your state. In some states you can borrow as much as 1500.00 until your next paycheck but in California there are laws which prohibit payday loan companies from lending you more than 300.00 at a time.

If you do decide to take out a pay advance, make sure you are dealing with a licensed (in your state) payday loan company. It is easy enough to verify online. There are some predatory out of state companies who do not have legal license to do business in your state that will lend you money and require an outrageous payback.

Desperate people sometimes agree to outrageous terms but the truth is that these unlicensed loans are illegal. Pay back the principal but they have no legal legs to collect more than that.

You don't have to trust me on this (always verify everything you read on the internet) but know that I tend to learn things the hard way.

And good luck to you. I want nothing but the best for all.

ep

Friday, January 28, 2011

Debt Settlement Tax Fact

This is just going to be a short post because I just read something about debt settlement and this thought floated to the top of my head.

Did you know that whether you use a debt settlement company or settle debt on your own with your creditors, you may have to pay tax on any amount that is forgiven? Your creditors are required to supply the IRS with a 1099 if the forgiven amount is 600.00 or greater.

Reputable debt settlement companies will tell you this but others may not or they may totally play it down.

Creditors definitely won't tell you this so you need to be aware of it when weighing your financial options.

Good Luck To You!

ep

Thursday, January 27, 2011

The Bankruptcy Trustee

Who is the bankruptcy trustee? Basically.......

A chapter 7 bankruptcy trustee reviews your chapter 7 bankruptcy, making sure everything is in order, and liquidates the eligible assets of your estate. But, as I have stated before, the liquidation of assets is not that common so don't freak out. This bankruptcy trustee also presides over the 341 hearing (meeting of the creditors--more about that later).

If you have a simple chapter "no-asset" case, you won't have much dealings with the bankruptcy trustee. I saw mine only at the 341 hearing and he asked me questions for less than five minutes.

A chapter 13 bankruptcy will review your chapter 13 bankruptcy, and determine a payment plan for you, ensuring that you will be able to meet your obligations under the plan. He will oversee this payment plan for it's duration.

It sounds intimidating but really, if your bankruptcy is on the up and up, you shouldn't have to worry about the bankruptcy trustee. Bankruptcy is not as scary as you've been led to believe.

Good luck to you!

Monday, January 17, 2011

Bankruptcy Advice ~ OR NOT!

At the risk of slitting my virtual throat, I proceed with the following rant because it's the right thing to do. I am sickened by the quality of bankruptcy advice that is available...or unavailable...on the internet.

This is a post of passion. I spent the better part of today reading blog posts and other articles about bankruptcy on the internet. And what I found was so much misinformation about bankruptcy that I find myself needing to caution my readers about believing everything that they read on the web.

I am embarrassed to say that it actually took me running across one great blog post with very accurate bankruptcy information to inspire this diatribe. The post was such an anomaly to my day that it made me think HEY WAIT! I need to warn my readers to not believe everything they read. There were some truths in many articles that I read today but those same articles also contained many untruths.

I post only accurate bankruptcy information (if I don't know it, I don't post it) on my blog but I will never blame you for verifying anything I have to say! In fact, I encourage you to. I am not an attorney. I am a discharged bankruptcy filer who did a lot of homework during my bankruptcy.

So please talk to a bankruptcy attorney or do enough homework to know what you're doing if you file pro se.

I want nothing but a fresh start for you!

Back soon,
ep

Sunday, January 16, 2011

California Bankruptcy Exemption Amounts 2011

For those of you who want to know how much property you can keep in a chapter 7 bankruptcy, I have listed below the actual code with the current California bankruptcy exemption amounts.

California bankruptcy exemption amounts get adjusted every three years and the last adjustment was on April 1st, 2010. These amounts are valid in the years 2011, 2012 and until another adjustment will made in the year 2013.

California does not allow a debtor to use Federal bankruptcy exemptions but I will list them in another post soon for filers from other states.

California is the only state that has two sets of state exemptions for a debtor to choose from. It is not possible to choose some options from system 1 and some options from system 2. You must choose one or the other. Obviously, which exemption system you choose will depend on your situation and you should discuss that with your bankruptcy attorney. I am not a lawyer and it is up to you to verify anything that you read on the internet, including here, though I do believe this information to be correct.

California System 2 exemptions are similar to those of other states. There is a large homestead exemption which is advantageous to filers who own homes.

System 1 is similar to the federal bankruptcy exemptions. It includes what is known as the wild card. The wild card exemption allows people who do not own a home to use the value of the homestead exemption for any property you choose.

I wrote a related post earlier entitled Bankruptcy and Property which you may also want to read.

Okay, here's the code below with the updated California bankruptcy exemption amounts valid for year 2011 and 2012 too. These amounts will be updated in 2013.



� 703.140. Election of exemptions if bankruptcy petition is filed

System 2

(a) In a case under Title 11 of the United States Code, all of the exemptions provided by this chapter, including the homestead exemption, other than the provisions of subdivision (b) are applicable regardless of whether there is a money judgment against the debtor or whether a money judgment is being enforced by execution sale or any other procedure, but the exemptions provided by subdivision (b) may be elected in lieu of all other exemptions provided by this chapter, as follows:

(1) If a husband and wife are joined in the petition, they jointly may elect to utilize the applicable exemption provisions of this chapter other than the provisions of subdivision (b), or to utilize the applicable exemptions set forth in subdivision (b), but not both.

(2) If the petition is filed individually, and not jointly, for a husband or a wife, the exemptions provided by this chapter other than the provisions of subdivision (b) are applicable, except that, if both the husband and the wife effectively waive in writing the right to claim, during the period the case commenced by filing the petition is pending, the exemptions provided by the applicable exemption provisions of this chapter, other than subdivision (b), in any case commenced by filing a petition for either of them under Title 11 of the United States Code, then they may elect to instead utilize the applicable exemptions set forth in subdivision (b).

(3) If the petition is filed for an unmarried person, that person may elect to utilize the applicable exemption provisions of this chapter other than subdivision (b), or to utilize the applicable exemptions set forth in subdivision (b), but not both.

(b) The following exemptions may be elected as provided in subdivision (a):

(1) The debtor's aggregate interest, not to exceed ($22,075) in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.

(2) The debtor's interest, not to exceed ($3,525) in value, in one motor vehicle.

(3) The debtor's interest, not to exceed ($550) in value in any particular item, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.

(4) The debtor's aggregate interest, not to exceed ($1,425) in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.

(5) The debtor's aggregate interest, not to exceed in value ($1175) plus any unused amount of the exemption provided under paragraph (1), in any property.

(6) The debtor's aggregate interest, not to exceed ($2,200) in value, in any implements, professional books, or tools of the trade of the debtor or the trade of a dependent of the debtor.

(7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract.

(8) The debtor's aggregate interest, not to exceed in value ($11,800), in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent.

(9) Professionally prescribed health aids for the debtor or a dependent of the debtor.

(10) The debtor's right to receive any of the following:

(A) A social security benefit, unemployment compensation, or a local public assistance benefit.

(B) A veterans' benefit.

(C) A disability, illness, or unemployment benefit.

(D) Alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(E) A payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless all of the following apply:

(i) That plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor's rights under the plan or contract arose.

(ii) The payment is on account of age or length of service.

(iii) That plan or contract does not qualify under Section 401(a), 403(a), 403(b),408, or 408A of the Internal Revenue Code of 1986.

(11) The debtor's right to receive, or property that is traceable to, any of the following:

(A) An award under a crime victim's reparation law.

(B) A payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(C) A payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of that individual's death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(D) A payment, not to exceed ($22,075), on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent.

(E) A payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.



System 1


704.010. (a) Any combination of the following is exempt in the amount of ($2,725): (1) The aggregate equity in motor vehicles. (2) The proceeds of an execution sale of a motor vehicle. (3) The proceeds of insurance or other indemnification for the loss, damage, or destruction of a motor vehicle.

(b) Proceeds exempt under subdivision (a) are exempt for a period of 90 days after the time the proceeds are actually received by the judgment debtor.

(c) For the purpose of determining the equity, the fair market value of a motor vehicle shall be determined by reference to used car price guides customarily used by California automobile dealers unless the motor vehicle is not listed in such price guides.

(d) If the judgment debtor has only one motor vehicle and it is sold at an execution sale, the proceeds of the execution sale are exempt in the amount of ($2,725) without making a claim. The levying officer shall consult and may rely upon the records of the Department of Motor Vehicles in determining whether the judgment debtor has only one motor vehicle. In the case covered by this subdivision, the exemption provided by subdivision (a) is not available.

704.020. (a) Household furnishings, appliances, provisions, wearing apparel, and other personal effects are exempt in the following cases: (1) If ordinarily and reasonably necessary to, and personally used or procured for use by, the judgment debtor and members of the judgment debtor's family at the judgment debtor's principal place of residence. (2) Where the judgment debtor and the judgment debtor's spouse live separate and apart, if ordinarily and reasonably necessary to, and personally used or procured for use by, the spouse and members of the spouse's family at the spouse's principal place of residence. (b) In determining whether an item of property is "ordinarily and reasonably necessary" under subdivision (a), the court shall take into account both of the following: (1) The extent to which the particular type of item is ordinarily found in a household. (2) Whether the particular item has extraordinary value as compared to the value of items of the same type found in other households. (c) If an item of property for which an exemption is claimed pursuant to this section is an item of the type ordinarily found in a household but is determined not to be exempt because the item has extraordinary value as compared to the value of items of the same type found in other households, the proceeds obtained at an execution sale of the item are exempt in the amount determined by the court to be a reasonable amount sufficient to purchase a replacement of ordinary value if the court determines that a replacement is reasonably necessary. Proceeds exempt under this subdivision are exempt for a period of 90 days after the proceeds are actually received by the judgment debtor.

704.030. Material that in good faith is about to be applied to the repair or improvement of a residence is exempt if the equity in the material does not exceed ($2,875) in the following cases: (a) If purchased in good faith for use in the repair or improvement of the judgment debtor's principal place of residence. (b) Where the judgment debtor and the judgment debtor's spouse live separate and apart, if purchased in good faith for use in the repair or improvement of the spouse's principal place of residence.

704.040. Jewelry, heirlooms, and works of art are exempt to the extent that the aggregate equity therein does not exceed ($7,175).

704.050. Health aids reasonably necessary to enable the judgment debtor or the spouse or a dependent of the judgment debtor to work or sustain health, and prosthetic and orthopedic appliances, are exempt.

704.060. (a) Tools, implements, instruments, materials, uniforms, furnishings, books, equipment, one commercial motor vehicle, one vessel, and other personal property are exempt to the extent that the aggregate equity therein does not exceed: (1) ($7,175), if reasonably necessary to and actually used by the judgment debtor in the exercise of the trade, business, or profession by which the judgment debtor earns a livelihood. (2) ($6,750), if reasonably necessary to and actually used by the spouse of the judgment debtor in the exercise of the trade, business, or profession by which the spouse earns a livelihood. (3) Twice the amount of the exemption provided in paragraph (1), if reasonably necessary to and actually used by the judgment debtor and by the spouse of the judgment debtor in the exercise of the same trade, business, or profession by which both earn a livelihood. In the case covered by this paragraph, the exemptions provided in paragraphs (1) and (2) are not available. In the case covered by this paragraph, the exemptions provided in paragraphs (1) and (2) are not available.
(b) If property described in subdivision (a) is sold at an execution sale, or if it has been lost, damaged, or destroyed, the proceeds of the execution sale or of insurance or other indemnification are exempt for a period of 90 days after the proceeds are actually received by the judgment debtor or the judgment debtor' s spouse. The amount exempt under this subdivision is the amount specified in subdivision (a) that applies to the particular case less the aggregate equity of any other property to which the exemption provided by subdivision (a) for the particular case has been applied. (c) Notwithstanding subdivision (a), a motor vehicle is not exempt under subdivision (a) if there is a motor vehicle exempt under Section 704.010 which is reasonably adequate for use in the trade, business, or profession for which the exemption is claimed under this section. (d) Notwithstanding subdivisions (a) and (b): (1) The amount of the exemption for a commercial motor vehicle under paragraph (1) or (2) of subdivision (a) is limited to four thousand dollars ($4,850). (2) The amount of the exemption for a commercial motor vehicle under paragraph (3) of subdivision (a) is limited to twice the amount of the exemption provided in paragraph (1) of this subdivision.

704.070. (a) As used in this section: (1) "Earnings withholding order" means an earnings withholding order under Chapter 5 (commencing with Section 706.010) (Wage Garnishment Law). (2) "Paid earnings" means earnings as defined in Section 706.011 that were paid to the employee during the 30-day period ending on the date of the levy. For the purposes of this paragraph, where earnings that have been paid to the employee are sought to be subjected to the enforcement of a money judgment other than by a levy, the date of levy is deemed to be the date the earnings were otherwise subjected to the enforcement of the judgment. (3) "Earnings assignment order for support" means an earnings assignment order for support as defined in Section 706.011. (b) Paid earnings that can be traced into deposit accounts or in the form of cash or its equivalent as provided in Section 703.080 are exempt in the following amounts: (1) All of the paid earnings are exempt if prior to payment to the employee they were subject to an earnings withholding order or an earnings assignment order for support. (2) Seventy-five percent of the paid earnings that are levied upon or otherwise sought to be subjected to the enforcement of a money judgment are exempt if prior to payment to the employee they were not subject to an earnings withholding order or an earnings assignment order for support.

704.080. (a) For the purposes of this section: (1) "Deposit account" means a deposit account in which payments authorized by the Social Security Administration are directly deposited by the United States government. (2) "Payments authorized by the Social Security Administration" means regular retirement and survivors' benefits, supplemental security income benefits, coal miners' health benefits, and disability insurance benefits. (b) A deposit account is exempt without making a claim in the following amount: (1) ($2,875) where one depositor is the designated payee of the directly deposited payments. (2) ($4,300) where two or more depositors are the designated payees of the directly deposited payments, unless those depositors are joint payees of directly deposited payments which represent a benefit to only one of the depositors, in which case the exempt amount is two thousand dollars ($2,700). (c) The amount of a deposit account that exceeds the exemption provided in subdivision (b) is exempt to the extent that it consists of payments authorized by the Social Security Administration. (d) Notwithstanding Article 5 (commencing with Section 701.010) of Chapter 3, when a deposit account is levied upon or otherwise sought to be subjected to the enforcement of a money judgment, the financial institution that holds the deposit account shall either place the amount that exceeds the exemption provided in subdivision (b) in a suspense account or otherwise prohibit withdrawal of that amount pending notification of the failure of the judgment creditor to file the affidavit required by this section or the judicial determination of the exempt status of the amount. Within 10 business days after the levy, the financial institution shall provide the levying officer with a written notice stating (1) that the deposit account is one in which payments authorized by the Social Security Administration are directly deposited by the United States government and (2) the balance of the deposit account that exceeds the exemption provided by subdivision (b). Promptly upon receipt of the notice, the levying officer shall serve the notice on the judgment creditor. Service shall be made personally or by mail. (e) Notwithstanding the procedure prescribed in Article 2 (commencing with Section 703.510), whether there is an amount exempt under subdivision (c) shall be determined as follows: (1) Within five days after the levying officer serves the notice on the judgment creditor under subdivision (d), a judgment creditor who desires to claim that the amount is not exempt shall file with the court an affidavit alleging that the amount is not exempt and file a copy with the levying officer. The affidavit shall be in the form of the notice of opposition provided by Section 703.560, and a hearing shall be set and held, and notice given, as provided by Sections 703.570 and 703.580. For the purpose of this subdivision, the "notice of opposition to the claim of exemption" in Sections 703.570 and 703.580 means the affidavit under this subdivision. (2) If the judgment creditor does not file the affidavit with the levying officer and give notice of hearing pursuant to Section 703.570 within the time provided in paragraph (1), the levying officer shall release the deposit account and shall notify the financial institution. (3) The affidavit constitutes the pleading of the judgment creditor, subject to the power of the court to permit amendments in the interest of justice. The affidavit is deemed controverted and no counteraffidavit is required. (4) At a hearing under this subdivision, the judgment debtor has the burden of proving that the excess amount is exempt. (5) At the conclusion of the hearing, the court by order shall determine whether or not the amount of the deposit account is exempt pursuant to subdivision (c) in whole or in part and shall make an appropriate order for its prompt disposition. No findings are required in a proceeding under this subdivision. (6) Upon determining the exemption claim for the deposit account under subdivision (c), the court shall immediately transmit a certified copy of the order of the court to the financial institution and to the levying officer. If the order determines that all or part of the excess is exempt under subdivision (c), with respect to the amount of the excess which is exempt, the financial institution shall transfer the exempt excess from the suspense account or otherwise release any restrictions on its withdrawal by the judgment debtor. The transfer or release shall be effected within three business days of the receipt of the certified copy of the court order by the financial institution. (f) If the judgment debtor claims that a portion of the amount is exempt other than pursuant to subdivision (c), the claim of exemption shall be made pursuant to Article 2 (commencing with Section 703.510). If the judgment debtor also opposes the judgment creditor' s affidavit regarding an amount exempt pursuant to subdivision (c), both exemptions shall be determined at the same hearing, provided the judgment debtor has complied with Article 2 (commencing with Section 703.510).

704.090. (a) The funds of a judgment debtor confined in a prison or facility under the jurisdiction of the Department of Corrections or the Department of the Youth Authority or confined in any county or city jail, road camp, industrial farm, or other local correctional facility, held in trust for or to the credit of the judgment debtor, in an inmate's trust account or similar account by the state, county, or city, or any agency thereof, are exempt without making a claim in the amount of ($1,350). If the judgment debtor is married, each spouse is entitled to a separate exemption under this section or the spouses may combine their exemptions. (b) Notwithstanding subdivision (a), if the judgment is for a restitution fine or order imposed pursuant to subdivision (a) of Section 13967 of the Government Code, as operative on or before September 28, 1994, or Section 1203.04 of the Penal Code, as operative on or before August 2, 1995, or Section 1202.4 of the Penal Code, the funds held in trust for, or to the credit of, a judgment debtor described in subdivision (a) are exempt in the amount of three hundred dollars ($300) without making a claim.

704.100. (a) Unmatured life insurance policies (including endowment and annuity policies), but not the loan value of such policies, are exempt without making a claim. (b) The aggregate loan value of unmatured life insurance policies (including endowment and annuity policies) is subject to the enforcement of a money judgment but is exempt in the amount of ($10,775). If the judgment debtor is married, each spouse is entitled to a separate exemption under this subdivision, and the exemptions of the spouses may be combined, regardless of whether the policies belong to either or both spouses and regardless of whether the spouse of the judgment debtor is also a judgment debtor under the judgment. The exemption provided by this subdivision shall be first applied to policies other than the policy before the court and then, if the exemption is not exhausted, to the policy before the court. (c) Benefits from matured life insurance policies (including endowment and annuity policies) are exempt to the extent reasonably necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor.

704.110. (a) As used in this section: (1) "Public entity" means the state, or a city, city and county, county, or other political subdivision of the state, or a public trust, public corporation, or public board, or the governing body of any of them, but does not include the United States except where expressly so provided. (2) "Public retirement benefit" means a pension or an annuity, or a retirement, disability, death, or other benefit, paid or payable by a public retirement system. (3) "Public retirement system" means a system established pursuant to statute by a public entity for retirement, annuity, or pension purposes or payment of disability or death benefits. (b) All amounts held, controlled, or in process of distribution by a public entity derived from contributions by the public entity or by an officer or employee of the public entity for public retirement benefit purposes, and all rights and benefits accrued or accruing to any person under a public retirement system, are exempt without making a claim. (c) Notwithstanding subdivision (b), where an amount described in subdivision (b) becomes payable to a person and is sought to be applied to the satisfaction of a judgment for child, family, or spousal support against that person: (1) Except as provided in paragraphs (2) and (3), the amount is exempt only to the extent that the court determines under subdivision (c) of Section 703.070. (2) If the amount sought to be applied to the satisfaction of the judgment is payable periodically, the amount payable is subject to an earnings assignment order for support as defined in Section 706.011, or any other applicable enforcement procedure, but the amount to be withheld pursuant to the assignment order or other procedure shall not exceed the amount permitted to be withheld on an earnings withholding order for support under Section 706.052. The paying entity may deduct from the payment being made to the judgment debtor, for each payment made pursuant to an earnings assignment order under this paragraph, an amount reflecting the actual cost of administration caused by the assignment order of up to two dollars ($2) for each payment. (3) If the intercept procedure provided for in Section 11357 of the Welfare and Institutions Code is used for benefits that are payable periodically, the amount to be withheld shall not exceed the amount permitted to be withheld on an earnings withholding order for support under Section 706.052. (4) If the amount sought to be applied to the satisfaction of the judgment is payable as a lump-sum distribution, the amount payable is subject to the intercept procedure provided in Section 11357 of the Welfare and Institutions Code or any other applicable enforcement procedure. (d) All amounts received by any person, a resident of the state, as a public retirement benefit or as a return of contributions and interest thereon from the United States or a public entity or from a public retirement system are exempt.

704.113. (a) As used in this section, "vacation credits" means vacation credits accumulated by a state employee pursuant to Section 18050 of the Government Code or by any other public employee pursuant to any law for the accumulation of vacation credits applicable to the employee. (b) All vacation credits are exempt without making a claim. (c) Amounts paid periodically or as a lump sum representing vacation credits are subject to any earnings withholding order served under Chapter 5 (commencing with Section 706.010) or any earnings assignment order for support as defined in Section 706.011 and are exempt to the same extent as earnings of a judgment debtor.

704.114. (a) Notwithstanding any other provision of law, service of an earnings assignment order for support on any public entity described in Section 704.110, other than the United States government, creates a lien on all employee contributions in the amount necessary to satisfy a support judgment as determined under Section 695.210 to the extent that the judgment remains enforceable. (b) The public entity shall comply with any request for a return of employee contributions by an employee named in the order by delivering the contributions to the clerk of the court from which the order issued, unless the entity has received a certified copy of an order terminating the earnings assignment order for support. (c) Upon receipt of moneys pursuant to this section, the clerk of the court, within 10 days, shall send written notice of the fact to the parties and to the district attorney enforcing any order pursuant to Section 11475.1 of the Welfare and Institutions Code. (d) Moneys received pursuant to this section are subject to any procedure available to enforce an order for support, but if no enforcement procedure is commenced after 30 days have elapsed from the date the notice of receipt is sent, the clerk shall, upon request, return the moneys to the public entity that delivered the moneys to the court unless the public entity has informed the court in writing that the moneys shall be released to the employee. (e) A court shall not directly or indirectly condition the issuance, modification, or termination of, or condition the terms or conditions of, any order for support upon the making of a request for the return of employee contributions by an employee.

704.115. (a) As used in this section, "private retirement plan" means: (1) Private retirement plans, including, but not limited to, union retirement plans. (2) Profit-sharing plans designed and used for retirement purposes. (3) Self-employed retirement plans and individual retirement annuities or accounts provided for in the Internal Revenue Code of 1954 as amended, to the extent the amounts held in the plans, annuities, or accounts do not exceed the maximum amounts exempt from federal income taxation under that code. (b) All amounts held, controlled, or in process of distribution by a private retirement plan, for the payment of benefits as an annuity, pension, retirement allowance, disability payment, or death benefit from a private retirement plan are exempt. (c) Notwithstanding subdivision (b), where an amount described in subdivision (b) becomes payable to a person and is sought to be applied to the satisfaction of a judgment for child, family, or spousal support against that person: (1) Except as provided in paragraph (2), the amount is exempt only to the extent that the court determines under subdivision (c) of Section 703.070. (2) If the amount sought to be applied to the satisfaction of the judgment is payable periodically, the amount payable is subject to an earnings assignment order for support as defined in Section 706.011 or any other applicable enforcement procedure, but the amount to be withheld pursuant to the assignment order or other procedure shall not exceed the amount permitted to be withheld on an earnings withholding order for support under Section 706.052. (d) After payment, the amounts described in subdivision (b) and all contributions and interest thereon returned to any member of a private retirement plan are exempt. (e) Notwithstanding subdivisions (b) and (d), except as provided in subdivision (f), the amounts described in paragraph (3) of subdivision (a) are exempt only to the extent necessary to provide for the support of the judgment debtor when the judgment debtor retires and for the support of the spouse and dependents of the judgment debtor, taking into account all resources that are likely to be available for the support of the judgment debtor when the judgment debtor retires. In determining the amount to be exempt under this subdivision, the court shall allow the judgment debtor such additional amount as is necessary to pay any federal and state income taxes payable as a result of the applying of an amount described in paragraph (3) of subdivision (a) to the satisfaction of the money judgment. (f) Where the amounts described in paragraph (3) of subdivision (a) are payable periodically, the amount of such periodic payment that may be applied to the satisfaction of a money judgment is the amount that may be withheld from a like amount of earnings under Chapter 5 (commencing with Section 706.010) (Wage Garnishment Law).

704.120. (a) Contributions by workers payable to the Unemployment Compensation Disability Fund and by employers payable to the Unemployment Fund are exempt without making a claim. (b) Before payment, amounts held for payment of the following benefits are exempt without making a claim: (1) Benefits payable under Division 1 (commencing with Section 100) of the Unemployment Insurance Code. (2) Incentives payable under Division 2 (commencing with Section 5000) of the Unemployment Insurance Code. (3) Benefits payable under an employer's plan or system to supplement unemployment compensation benefits of the employees generally or for a class or group of employees. (4) Unemployment benefits payable by a fraternal organization to its bona fide members. (5) Benefits payable by a union due to a labor dispute. (c) After payment, the benefits described in subdivision (b) are exempt. (d) During the payment of benefits described in paragraph (1) of subdivision (b) to a judgment debtor under a support judgment, the judgment creditor may, through the appropriate district attorney, seek to apply the benefit payment to satisfy the judgment as provided by Section 11350.5 of the Welfare and Institutions Code. (e) During the payment of benefits described in paragraphs (2) to (5), inclusive, of subdivision (b) to a judgment debtor under a support judgment, the judgment creditor may, directly or through the appropriate district attorney, seek to apply the benefit payments to satisfy the judgment by an earnings assignment order for support as defined in Section 706.011 or any other applicable enforcement procedure. If the benefit is payable periodically, the amount to be withheld pursuant to the assignment order or other procedure shall be 25 percent of the amount of each periodic payment or any lower amount specified in writing by the judgment creditor or court order, rounded down to the nearest whole dollar. Otherwise the amount to be withheld shall be the amount the court determines under subdivision (c) of Section 703.070. The paying entity may deduct from each payment made pursuant to an assignment order under this subdivision an amount reflecting the actual cost of administration caused by the assignment order up to two dollars ($2) for each payment.

704.130. (a) Before payment, benefits from a disability or health insurance policy or program are exempt without making a claim. After payment, the benefits are exempt. (b) Subdivision (a) does not apply to benefits that are paid or payable to cover the cost of health care if the judgment creditor is a provider of health care whose claim is the basis on which the benefits are paid or payable. (c) During the payment of disability benefits described in subdivision (a) to a judgment debtor under a support judgment, the judgment creditor or district attorney may seek to apply the benefit payments to satisfy the judgment by an earnings assignment order for support, as defined in Section 706.011, or any other applicable enforcement procedure, but the amount to be withheld pursuant to the earnings assignment order or other procedure shall not exceed the amount permitted to be withheld on an earnings assignment order for support under Section 706.052.

704.140. (a) Except as provided in Article 5 (commencing with Section 708.410) of Chapter 6, a cause of action for personal injury is exempt without making a claim. (b) Except as provided in subdivisions (c) and (d), an award of damages or a settlement arising out of personal injury is exempt to the extent necessary for the support of the judgment debtor and the spouse and dependents of the judgment debtor. (c) Subdivision (b) does not apply if the judgment creditor is a provider of health care whose claim is based on the providing of health care for the personal injury for which the award or settlement was made. (d) Where an award of damages or a settlement arising out of personal injury is payable periodically, the amount of such periodic payment that may be applied to the satisfaction of a money judgment is the amount that may be withheld from a like amount of earnings under Chapter 5 (commencing with Section 706.010) (Wage Garnishment Law).

704.150. (a) Except as provided in Article 5 (commencing with Section 708.410) of Chapter 6, a cause of action for wrongful death is exempt without making a claim. (b) Except as provided in subdivision (c), an award of damages or a settlement arising out of the wrongful death of the judgment debtor' s spouse or a person on whom the judgment debtor or the judgment debtor's spouse was dependent is exempt to the extent reasonably necessary for support of the judgment debtor and the spouse and dependents of the judgment debtor. (c) Where an award of damages or a settlement arising out of the wrongful death of the judgment debtor's spouse or a person on whom the judgment debtor or the judgment debtor's spouse was dependent is payable periodically, the amount of such a periodic payment that may be applied to the satisfaction of a money judgment is the amount that may be withheld from a like amount of earnings under Chapter 5 (commencing with Section 706.010) (Wage Garnishment Law).

704.160. (a) Except as provided by Chapter 1 (commencing with Section 4900) of Part 3 of Division 4 of the Labor Code, before payment, a claim for workers' compensation or workers' compensation awarded or adjudged is exempt without making a claim. Except as specified in subdivision (b), after payment, the award is exempt. (b) Notwithstanding any other provision of law, during the payment of workers' compensation temporary disability benefits described in subdivision (a) to a support judgment debtor, the support judgment creditor may, through the appropriate district attorney, seek to apply the workers' compensation temporary disability benefit payment to satisfy the support judgment as provided by Section 11350.1 of the Welfare and Institutions Code. (c) Notwithstanding any other provision of law, during the payment of workers' compensation temporary disability benefits described in subdivision (a) to a support judgment debtor under a support judgment, including a judgment for reimbursement of public assistance, the judgment creditor may, directly or through the appropriate district attorney, seek to apply the temporary disability benefit payments to satisfy the support judgment by an earnings assignment order for support, as defined in Section 5208 of the Family Code, or any other applicable enforcement procedure. The amount to be withheld pursuant to the earnings assignment order for support or other enforcement procedure shall be 25 percent of the amount of each periodic payment or any lower amount specified in writing by the judgment creditor or court order, rounded down to the nearest dollar. Otherwise, the amount to be withheld shall be the amount the court determines under subdivision (c) of Section 703.070. The paying entity may deduct from each payment made pursuant to an order assigning earnings under this subdivision an amount reflecting the actual cost of administration of this assignment, up to two dollars ($2) for each payment. (d) Unless the provision or context otherwise requires, the following definitions govern the construction of this section. (1) "Judgment debtor" or "support judgment debtor" means a person who is owing a duty of support. (2) "Judgment creditor" or "support judgment creditor" means the person to whom support has been ordered to be paid. (3) "Support" refers to an obligation owing on behalf of a child, spouse, or family; or an amount owing pursuant to Section 11350 of the Welfare and Institutions Code. It also includes past due support or arrearage when it exists.

704.170. Before payment, aid provided pursuant to Division 9 (commencing with Section 10000) of the Welfare and Institutions Code or similar aid provided by a charitable organization or a fraternal benefit society as defined in Section 10990 of the Insurance Code, is exempt without making a claim. After payment, the aid is exempt.

704.180. Before payment, relocation benefits for displacement from a dwelling which are to be paid pursuant to Chapter 16 (commencing with Section 7260) of Division 7 of Title 1 of the Government Code or the federal "Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970" (42 U.S.C. Sec. 4601 et seq.), as amended, are exempt without making a claim. After payment, the benefits are exempt.

704.190. (a) As used in this section, "institution of higher education" means "institution of higher education" as defined in Section 1141(a) of Title 20 of the United States Code, as amended. (b) Before payment, financial aid for expenses while attending school provided to a student by an institution of higher education is exempt without making a claim. After payment, the aid is exempt.

704.200. (a) As used in this section: (1) "Cemetery" has the meaning provided by Section 7003 of the Health and Safety Code. (2) "Family plot" is a plot that satisfies the requirements of Section 8650 of the Health and Safety Code. (3) "Plot" has the meaning provided by Section 7022 of the Health and Safety Code. (b) A family plot is exempt without making a claim. (c) Except as provided in subdivision (d), a cemetery plot for the judgment debtor and the spouse of the judgment debtor is exempt. (d) Land held for the purpose of sale or disposition as cemetery plots or otherwise is not exempt. 704.210. Property that is not subject to enforcement of a money judgment is exempt without making a claim.

Homestead Exemption

704.710. As used in this article: (a) "Dwelling" means a place where a person resides and may include but is not limited to the following: (1) A house together with the outbuildings and the land upon which they are situated. (2) A mobilehome together with the outbuildings and the land upon which they are situated. (3) A boat or other waterborne vessel. (4) A condominium, as defined in Section 783 of the Civil Code. (5) A planned development, as defined in Section 11003 of the Business and Professions Code. (6) A stock cooperative, as defined in Section 11003.2 of the Business and Professions Code. (7) A community apartment project, as defined in Section 11004 of the Business and Professions Code. (b) "Family unit" means any of the following: (1) The judgment debtor and the judgment debtor's spouse if the spouses reside together in the homestead. (2) The judgment debtor and at least one of the following persons who the judgment debtor cares for or maintains in the homestead: (A) The minor child or minor grandchild of the judgment debtor or the judgment debtor's spouse or the minor child or grandchild of a deceased spouse or former spouse. (B) The minor brother or sister of the judgment debtor or judgment debtor's spouse or the minor child of a deceased brother or sister of either spouse. (C) The father, mother, grandfather, or grandmother of the judgment debtor or the judgment debtor's spouse or the father, mother, grandfather, or grandmother of a deceased spouse. (D) An unmarried relative described in this paragraph who has attained the age of majority and is unable to take care of or support himself or herself. (3) The judgment debtor's spouse and at least one of the persons listed in paragraph (2) who the judgment debtor's spouse cares for or maintains in the homestead. (c) "Homestead" means the principal dwelling (1) in which the judgment debtor or the judgment debtor's spouse resided on the date the judgment creditor's lien attached to the dwelling, and (2) in which the judgment debtor or the judgment debtor's spouse resided continuously thereafter until the date of the court determination that the dwelling is a homestead. Where exempt proceeds from the sale or damage or destruction of a homestead are used toward the acquisition of a dwelling within the six-month period provided by Section 704.720, "homestead" also means the dwelling so acquired if it is the principal dwelling in which the judgment debtor or the judgment debtor's spouse resided continuously from the date of acquisition until the date of the court determination that the dwelling is a homestead, whether or not an abstract or certified copy of a judgment was recorded to create a judgment lien before the dwelling was acquired. (d) "Spouse" does not include a married person following entry of a judgment decreeing legal separation of the parties, unless such married persons reside together in the same dwelling.

704.720. (a) A homestead is exempt from sale under this division to the extent provided in Section 704.800. (b) If a homestead is sold under this division or is damaged or destroyed or is acquired for public use, the proceeds of sale or of insurance or other indemnification for damage or destruction of the homestead or the proceeds received as compensation for a homestead acquired for public use are exempt in the amount of the homestead exemption provided in Section 704.730. The proceeds are exempt for a period of six months after the time the proceeds are actually received by the judgment debtor, except that, if a homestead exemption is applied to other property of the judgment debtor or the judgment debtor's spouse during that period, the proceeds thereafter are not exempt. (c) If the judgment debtor and spouse of the judgment debtor reside in separate homesteads, only the homestead of one of the spouses is exempt and only the proceeds of the exempt homestead are exempt.

704.730. (a) The amount of the homestead exemption is one of the following: (1) ($75,000) unless the judgment debtor or spouse of the judgment debtor who resides in the homestead is a person described in paragraph (2) or (3). (2) ($100,000) if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead a member of a family unit, and there is at least one member of the family unit who owns no interest in the homestead or whose only interest in the homestead is a community property interest with the judgment debtor. (3) ($150,000)** if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead any one of the following: (A) A person 65 years of age or older. (B) A person physically or mentally disabled and as a result of that disability is unable to engage in substantial gainful employment. There is a rebuttable presumption affecting the burden of proof that a person receiving disability insurance benefit payments under Title II or supplemental security income payments under Title XVI of the federal Social Security Act satisfies the requirements of this paragraph as to his or her inability to engage in substantial gainful employment. (C) A person 55 years of age or older with a gross annual income of not more than fifteen thousand dollars ($15,000) or, if the judgment debtor is married, a gross annual income, including the gross annual income of the judgment debtor's spouse, of not more than twenty thousand dollars ($20,000) and the sale is an involuntary sale. (b) Notwithstanding any other provision of this section, the combined homestead exemptions of spouses on the same judgment shall not exceed the amount specified in paragraph (2) or (3), whichever is applicable, of subdivision (a), regardless of whether the spouses are jointly obligated on the judgment and regardless of whether the homestead consists of community or separate property or both. Notwithstanding any other provision of this article, if both spouses are entitled to a homestead exemption, the exemption of proceeds of the homestead shall be apportioned between the spouses on the basis of their proportionate interests in the homestead.

**This amount may be limited to $125,000 by Federal Law depending on how long the property has been owned prior to filing the bankruptcy case.

Thursday, January 13, 2011

Eva Longoria Bankruptcy

This rant is a little out of the norm for this blog but I can't help commenting on this topic.

I don't know about you but I am a sick of hearing about Eva Longoria's business bankruptcy. Eva Longoria's restaurant, Beso is said to have to declare bankruptcy. That's what I read.

And that's what I read. And read, and read, and read. I got it the first time I read it and subsequent articles have told me nothing new. Stop it already.

I don't care about the bankruptcy of Eva Longoria's restaurant, I really don't. I'm too busy trying to put food on my table to worry about anyone else right now.

I wish nothing but the best for Eva (if I may call her Eva and I'm not certain that I can) but I wish there was more focus in the media on those of us who really needed or need bankruptcy protection.

I had to file bankruptcy a couple years ago and went through it alone because of the stigma that it carries in this country.

It doesn't have to be that way. The media needs to STOP making it be that way. Hope Eva has a good bankruptcy attorney.

back soon
ep

Friday, January 7, 2011

Bankruptcy and Property

One of the main questions I had when I filed bankruptcy was about bankruptcy and property. I was very concerned with what was going to happen to my property in bankruptcy.

Having gone through bankruptcy and having received a discharge, I now know the answer to this and it depends on which bankruptcy chapter you file. In a chapter 13, you are put on a payment plan (not to exceed five years) that you can afford, and you keep all of your property.

A chapter 7 bankruptcy is different. The premise is that it is a "liquidation" of assets. In theory, your assets are sold to pay your creditors what is possible and then you are free and clear (discharged) to go about your business.

Don't freak out here.....you probably have less "assets" than you think. Plus, you are allowed a certain amount of property exemptions...monetary amounts of stuff you can keep regardless.

The truth is that most people who qualify for chapter 7 don't have many (or any) assets to be liquidated. I didn't have to forfeit any property~ bankruptcy truly gave me a fresh start and that is pretty common.

Bankruptcy property exemptions are complicated. There are federal exemptions and there are state exemptions. Some states will give you a choice between using the exemptions of the state or the federal exemptions. But some states will not let you choose. You have to use the bankruptcy exemptions of that state.

The states that will not allow you to use the federal property exemptions for bankruptcy are Alaska, Arizona, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming.

You will need to value your stuff in order to figure out how much of it is exempt. One thing to keep in mind when valuing your stuff is that your stuff isn't worth what you think it is. You may have paid 2000.00 for your couch two years ago, but it's only worth a tiny fraction of that now.

My lawyer had me value most of my items at "garage sale prices" and that's exactly what I did. However, I am not an attorney so please discuss this with yours.

You may have other considerations when it comes to your property in a chapter 7. It is possible to keep items for which you have secured loans, such as a house, or car, by either reaffirming or doing what is called a ride-through. In either case, you keep paying for them. Which of the two, if either, you do, will depend on your wants and circumstances so---yeah---another thing to discuss with your bankruptcy lawyer.

Another thing that you should know is that you must have lived for two years in the state in which you are filing bankruptcy to use the exemptions of that state. Otherwise the exemptions of the state in which you lived in for six months prior your move will apply.

The laws regarding bankruptcy and property can be a bit confusing but try not to panic. A good bankruptcy attorney will make it so you retain as much, if not all, of your property as possible.

I will list the California bankruptcy exemptions (California gives filers a choice of two sets) in another post.

As always, good luck to you...I wish you the best 2011 possible!

ep