How Can I Avoid a Credit Card Company Putting a Lien on My House?

Do not ignore that American Express, Visa, Golden One Credit Union, Credit Bureau USA, Midland Funding LLC lawsuits!  These companies will take their judgments and convert them into wage garnishments and liens on real property.

If you have been sued by Midland Funding LLC or American Express, you will find out when someone hands you or a family member papers.  Typically a debtor has 30 days to respond to the complaint.  Before doing anything else, please  Consider hiring an attorney.  That attorney, even if it is not me, will make sure to file an answer so that you can fight the lawsuit.  By not filing an answer, you are conceding the case.  It will be only a matter of months before you see very negative implications.  By filing an answer, you have at the very least given your self at least a year to determine whether their claim is valid and to enter into tough negotiations, if necessary.

If you ignore the lawsuit, there is not much that can be done.  The credit card company has all the power. They are going to file a judgment approximately a month after the complaint is served.  With the judgement, the creditor can easily garnish wages or put a lien on your house.  To garnish  credit card company.  Eventually, the the credit card company files a default judgement against the debtor, and then files an abstract judgment against the property.

If you cannot come to terms with the credit company, a Chapter 7 can be used to get rid of the debt, along with the wage garnishment and the lien on the house.  However, the process is a little more complicated when a credit card company records a lien.  In a typical bankruptcy, debtors will not personally liable for discharged debts or a valid lien from a credit card judgment.  However, the lien will attach to the house.  It will need to be paid when you sell or refinance the property after the bankruptcy case is filed.

In the chapter 7 bankruptcy, a special motion will need to be prepared and presented to a bankruptcy judge to cancel that lien.  This motion will add to the cost of your bankruptcy.  Once that has been done, the abstract judgment will be made unenforceable.

Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.

Photo Credit: http://www.flickr.com/photos/americanexpressonline/

Chapter 7 Bankruptcy: Dishonest Debtor Loses Discharge Order

The main goal in filing a Chapter 7 bankruptcy case is to discharge your debts.  However, to get a discharge, a debtor has to disclose all assets and provide an accurate valuation of the assets.  

Last month, a court revoked the discharge of a debtor, Jerry Jones, who failed to be completely forthright about his assets.   When Mr. Jones filed his bankruptcy schedules, he did not admit to owning several assets.  Even when he testified under oath to the bankruptcy trustee, Mr. Jones omitted a number of assets and undervalued other assets, largely valuing them at zero.

Mr. Jones eventually got his discharge in due course.  However, within a year of the date the discharge was granted, the United States Trustee discovered the debtor had omitted and undervalued assets in his bankruptcy schedules, and brought an adversary action to revoke the discharge.  After two days of hearings, the bankruptcy court ruled that the debtor’s omissions and undervaluations violated 11 U.S.C. §727(a)(4) and revoked the discharge.  On appeal, the Ninth Circuit affirmed.

Thus, it is crucial in filing bankruptcy cases that a debtor is honest about what she owns and that she provides a fair value of the items declared.  

The name of the case discussed in this article is Jones v. U.S. Trustee, Eugene, ___ F.3d ___, 2013 WL 6224330 (9^th Cir. 2013 Dec. 2, 2013 Dkt. no. 12-35665)   Here is  link to the Court's opinion:  Jones case

Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.

Photo Credit: http://www.flickr.com

What Is A Discharge In Bankruptcy?

In Willy Wonka and Chocolate Factory, everyone was hunting for the Golden Ticket so they could get a tour of the chocolate factory.  The Golden Ticket in every chapter 7 bankruptcy in Fresno, and everywhere else, is the Discharge Order.  

A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts, like credit cards, medical bills, and missed payments.  In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order!  No creditor of the debtor is allowed to make any collection effort with the debtor, including lawsuits, wage garnishments, telephone calls, letters, and personal contacts.

Unfortunately, the Golden Ticket, "Discharge Order", does not erase valid liens such as property mortgage liens, car liens, or even dishwasher liens if you bought them from Home Depot.  Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.  They are allowed to repo the car, the Kirby vacuum cleaner, and foreclose on the house.

WHEN DOES THE DISCHARGE OCCUR?

In a chapter 7 bankruptcy, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse (60 days following the first date set for the 341 meeting). Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court.

HOW DOES THE DEBTOR GET A DISCHARGE?

Unless a lawsuit is filed in the Chapter 7 bankruptcy, the debtor automatically receives a discharge. The debtor does not have to do anything, except wait by the mailbox.  A copy of the discharge order also is mailed to all creditors named in the bankruptcy petition.  The notice informs creditors generally that the debts owed to them have been discharged and that they should not attempt any further collection.
They are cautioned in the notice that continuing collection efforts could subject them to punishment for contempt.

Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.

Photo credit:
http://www.flickr.com/photos/aloha75/

What Benefits Can You Expect After Filing Bankruptcy in Fresno / Clovis

Like others in Fresno and the central valley, you’re considering the benefits of chapter 7 bankruptcy.  The holidays are over and you are avoiding or delaying your bankruptcy for the perceived negative impact it is going to have on your life.

Good and bad – there will be consequences for filing bankruptcy.  Here are 3 ways your life will change after you file your bankruptcy case:

#1 Stress Will Go Away

Most of my bankruptcy clients delay filing for bankruptcy for years – even though they need it badly.  Month in and month out you have endured the humiliating and harassing phone calls; will you be sued?  Will your wages be garnished?  

I have watched clients come in the door with crazy with debt.  They don't know where to begin...they do not know who or how much they owe.  You can’t sleep.  Your mind is filled worry. Worried about the present, worried about the future.  Don't know where to go.  

Bankruptcy does not eliminate all of your worries.  But it will phone calls, stop the worry about wage garnishment, and bring order to the financial chaos you have been enduring for way too long.  And the less stress and worry you have, the more sleep you will get.  Finally.

#2 – Credit Card Debt Disappears 

Many people I help fall into the cycle of paying off one credit card with a second credit card – robbing from Peter to pay Paul.  This can’t go on forever.

Bankruptcy stops you from using credit cards.  Best practices dictate to stop using credit cards 3 months before filing bankruptcy.  I often get asked if it is possible to keep a credit card after filing for bankruptcy.  You can't ... and that is a good thing.

Many of the people I help have not used credit cards for years before filing bankruptcy because they stopped paying on their cards.  They have learned already how to get buy on a cash basis. This is a good thing.  Being forced to only buy those things that you can pay for now is a good habit to get into and will help you in never having to hire a bankruptcy attorney like me again.

Some will think this is a good thing, but I don't:  soon after you file for bankruptcy you will get flooded with credit card offers.  These will be credit cards with terrible interest rates.  I don’t recommend that my clients get any of them.  It will be too easy to fall into old habits – only this time you will be paying super high interest rates and won’t have bankruptcy to fall back on; you won’t be able to file another chapter 7 bankruptcy for eight (8) years.

If you must have a credit card I would recommend a secured card where you have to put money down as collateral before you will be issued a card.  This can be a great way to re-build your credit after bankruptcy.

#3 – You Will Get Back Control of Your Life

When you are in serious debt you lose control.  You lose control of your phone.  Every time the phone rings you have a physical reaction.  You lose control of your bank account.  You try to deal with the pressure that the collection agencies are putting on you by agreeing to payment plays where the creditor automatically debits your account each month.

But it never stops.  Every day you wake up not knowing what type of payments are going to be taken out of your account and worse if you will have the money to cover it.

When you file for bankruptcy your creditors can no longer take money out of your bank account.  They can’t garnish your wages.  They can’t even call you on the phone.  Think of that – actually answering your phone without fear of who is on the other end.

I never try to sugar coat that bankruptcy can’t solve all your problems and absolutely has consequences when it comes to getting credit in the near future.

However, for many dealing with serious debt problems bankruptcy will not only bring order back to your life – you may not be able to start rebuilding your financial life without it.

Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.

Photo Credit:  http://www.flickr.com