Bankruptcy | Black & LoBello

How To Choose The Right Bankruptcy Lawyer

On August 30, 2010, in Bankruptcy, by blacklobellolaw

When facing the decision whether or not to file for bankruptcy you want to make sure you have an experienced attorney who will handle your case the way you want. The following is a list of key issues you need to address and ask about when you are searching for a bankruptcy attorney:

Have you asked around?

The number one rule in choosing a lawyer is to ask others who have filed bankruptcy how their attorney treated them. Some attorneys run a “mill” practice that focus on getting as many people in and out of their office doors as possible. These attorneys charge typically charge lower fees but also give the least amount of service. By asking friends and family, you can avoid falling into a “mill”. Find an experienced attorney who will take the time to sit down and answer your questions. Remember, no matter how much an attorney may be well-regarded, unless he or she is experienced in BANKRUPTCY law issues you don’t need them.

Does the attorney have the right experience?

Any attorney you consider using for your bankruptcy must have BANKRUPTCY experience. You don’t want to be some newbie lawyer’s guinea pig. By “newbie” I just don’t mean a new lawyer but also a new bankruptcy lawyer. As I mentioned before, no matter how much an attorney may be well-regarded, unless he or she is experienced in BANKRUPTCY law issues you don’t need them.

Are there communication issues?

Does the attorney explain the bankruptcy process in a way you can understand? Blogging and online publishing is more important now than ever before since professionals share information and educate the public about issues that concern them. Bankruptcy lawyers who maintain their own blogs prove they are knowledgeable enough to help others understand this field of law.

Who will be handling your case?

You must ask which lawyer will be handling your file. The attorney you interview may not necessarily be the one who will handle your bankruptcy issue. Make sure to ask who WILL be doing the day-to-day work on your file. In some firms, a paralegal might be handling the majority of your case so you should make sure you know this as well.

How much will it cost?

You have enough money trouble without worrying about what the fees will be for your bankruptcy. Ask the lawyer for the most detailed estimate he can give as to how much your case will cost.

Don’t make a fee-based decision.

The cheapest lawyer is not always the best lawyer. Hopefully, bankruptcy is a once-in-a-lifetime event. As such, you want to make sure you are getting a bankruptcy attorney who can do the best job for YOU. You want an attorney who will take the time to answer your questions, concerns, and any other fears you may have. An attorney who has his paralegal or assistant returning his phone calls might not be paying attention to your case. Always remember that you hired the attorney to work for you. Don’t settle for anyone else but THAT lawyer to do the work.

Randy M. Creighton, Esq.

Tagged with: 13 • Bankruptcy • Black & LoBello • blog • Chapter • cheap • co-debtors • co-signers • communication • cost • creditors • experience • fees • Las Vegas • mill • Nevada • online • paralegal • professionals • publishing

6 Mistakes to Avoid On The Eve Of Bankruptcy

On August 25, 2010, in Bankruptcy, Mortgage, Real Estate, by blacklobellolaw

The months and days leading up to a bankruptcy filing can make or break your financial future, and possibly stop you from being able to file for bankruptcy. The following six (6) mistakes must be avoided if you are thinking of filing bankruptcy:

Retirement Accounts

Borrowing against or cashing in your retirement accounts to try to solve your debt problem is usually not a good idea. In Nevada, debtors are allowed to keep up to $500,000 per individual during a bankruptcy. By cashing out these accounts you run the risk that these funds will be treated as a non-exempt asset. As such, these funds will not be protected in bankruptcy and you might be forced to turnover these funds to the Trustee. Therefore, before removing any funds from a retirement account, you should speak with a bankruptcy attorney. An attorney can help you determine if, in your circumstances, these funds may be used to avoid bankruptcy or if moving them would be a costly mistake.

Home Equity

Much like your retirement accounts, raiding the equity in your home to service your debts can be a costly mistake. Nevada allows debtors to retain $550,000 in equity in their home when they file a bankruptcy. Borrowing this equity can make it more difficult to stay in your home if you eventually need to file a bankruptcy. Speak with an attorney to determine if the equity in your house is sufficient to avoid bankruptcy or if it should remain in your home.

Incurring Additional Debt

Do not go into additional debt if you are seriously considering bankruptcy as an option. Racking up additional debt when you know you cannot repay and have no intention of ever repaying the debt is considered fraudulent. If you find yourself considering payday loans or high interest title loans to buy groceries, pay the energy bill, or put gas in your car, it is probably time to speak with a bankruptcy attorney about your options.

Ignoring Your Problems

When debts begin to pile up, there is a temptation to bury your head in the sand and hope the problem goes away. Waiting to deal with your problems can cause you irreversible financial harm. In addition, you are not helping yourself by dodging people trying to serve you with papers. Creditors only need to attempt to serve you. The only thing you have accomplished by not receiving service is that you will not know what court proceedings have been filed against you.

Paying Back Relatives or Business Partners

Do not repay a relative, friend, or business partner before filing bankruptcy. The bankruptcy court can make your relative or business partner repay to your bankruptcy estate anything you have paid them for up to a year. If you have any question on whether or not to pay a creditor, contact a bankruptcy lawyer.

Trying to Beat the System

Do not transfer any assets out of your name prior to filing bankruptcy without consulting an attorney. Unless the transfer is in the ordinary course of business and for fair market value, you run the risk of the transfer being found fraudulent. Do not keep any information from your attorney. Federal bankruptcy crimes are committed by people trying to keep the court from knowing about debts, assets, or transfers and can result in a loss of a discharge and, in some case, fines and prison time.

Randy M. Creighton, Esq.

Tagged with: 13 • account • assets • Bankruptcy • Black & LoBello • business • Chapter • co-debtors • co-signers • creditors • debt • debts • equity • exempt • family • financial • fraud • home • ignore • incurring • Las Vegas • Nevada • non-exempt • partners • relatives • retirement

The Automatic Stay In Bankruptcy

On August 23, 2010, in Bankruptcy, Real Estate, by blacklobellolaw

The instant bankruptcy is filed, for either Chapter 7 or Chapter 13, a protective umbrella called the automatic stay is triggered which protects the debtor and the debtor’s property against the continuance of any action by any creditor. For example, the automatic stay would protect and STOP a pending foreclosure. Additionally, when filing a Chapter 13 bankruptcy, that injunction extends to anyone else who is obligated to repay your debts.

However, the automatic stay is not absolute in that a creditor may restart collection proceedings by asking the court for permission.

Further, there are limits on how long the automatic stay lasts. For example:

If you had a prior bankruptcy case pending in the last year which was dismissed then the automatic stay lasts for only the first thirty (30) days after your case is filed unless you or your lawyer gets a court order extending the automatic stay; or
If you had two or more prior bankruptcy cases pending in the last year which were dismissed then the automatic stay does not take effect at all unless you or your lawyer gets a court order extending the automatic stay.

What The Automatic Stay Covers

As long as the automatic stay remains in place, the following actions are prohibited:

Beginning or continuing law suits;
Collection calls;
Repossessions;
Foreclosure sales;
Income executions (“garnishees”); and
Bank account restraints.

In other words, the automatic stay is a central and very powerful tool a debtor can take advantage of once the bankruptcy is filed. The goal of any bankruptcy proceeding is to give the debtor a fresh start. The automatic stay allows for the debtor to be protected from all creditor claims while he gets his finances back in order.

What The Automatic Stay Does Not Cover

Unfortunately, not all actions and debts are covered by the automatic stay. The automatic stay does not stop:

Criminal proceedings;
Actions for a family support order or the modification of such order;
Actions to collect support from property that is not property of the estate; and
Tax audits or demands by a taxing authority to file tax returns or assessments of taxes due.

If you are thinking of filing for bankruptcy it is always best to talk with an experienced attorney to discuss your individual case. The beauty of bankruptcy is that a debtor has many options to help resolve individual problems. Only an experienced bankruptcy lawyer can help guide you through this difficult and confusing process.

Randy M. Creighton, Esq.

Tagged with: 13 • 7 • automatic • Bankruptcy • Black & LoBello • Chapter • co-debtors • co-signers • collection • court • creditor • creditors • debtors • debts • discharge • Las Vegas • Nevada • proceeding • stay

What is the Meeting of Creditors?

On August 16, 2010, in Bankruptcy, by blacklobellolaw

Between thirty (30) and forty (40) days after filing your bankruptcy petition, the randomly assigned Chapter 7 Trustee will hold a meeting of creditors. During this meeting, the debtor is placed under oath and the Chapter 7 Trustee along with any creditors that attend may ask questions regarding your bankruptcy petition.

You MUST attend this meeting and be able to answer questions regarding the contents of your bankruptcy petition, including all the assets and liabilities you have listed. If a husband and wife have filed a joint petition then BOTH the husband and wife must attend the meeting of creditors and answer questions.

Further, you must provide the Chapter 7 Trustee with certain documents at least ten (10) days prior to the meeting of creditors. While each Chapter 7 Trustee may have certain requirements, generally you must produce at least the previous two (2) years tax returns, previous six (6) months of bank statements and pay stubs, and a Trustee Questionnaire. Your attorney should be able to provide the documents to the Chapter 7 Trustee for you.

It is important to cooperate with the Chapter 7 Trustee and provide any financial records or documents that the Chapter 7 Trustee requests.

Randy M. Creighton, Esq.

Tagged with: 13 • 341 • 7 • assets • bank • Bankruptcy • Black & LoBello • Chapter • Creighton • documents • financial • husband • joint • Las Vegas • liabilities • Nevada • pay • petition • questionnaire • Randy • records • returns • sole • statements • stubs • tax • trustee • wife

The Chapter 7 Discharge

On August 12, 2010, in Bankruptcy, by blacklobellolaw

The goal of any bankruptcy proceeding is to obtain a discharge of debts. A discharge releases the debtor from personal liability from most debts and prevents creditors from taking any collection action against you. Nonetheless, there are many exceptions to receiving a discharge in a bankruptcy proceeding. Therefore, debtors should consult competent legal counsel before filing to discuss the scope of the discharge. Not to worry, over 99% of all debtors who file for bankruptcy receive a discharge. An order of discharge is usually granted very early in the case, within 60-90 days after the date first set for the meeting of creditors.

Randy M. Creighton, Esq.

Tagged with: 7 • Bankruptcy • Black & LoBello • Chapter • co-debtors • co-signers • creditors • discharge • Las Vegas • Nevada • proceeding

Chapter 13 Bankruptcy Or Loan Modification?

On August 11, 2010, in Bankruptcy, Finance, Mortgage, Real Estate, by blacklobellolaw

Rarely does a loan modification include a principal reduction. The typical loan modification only deals with the first mortgage and will only reduce the monthly payment, not the total amount due and owing. For most Las Vegans it does not make sense to keep paying on an asset that is completely upside-down.

Therefore, many people turn to Chapter 13 bankruptcy to modify their loans AND reduce the principal balance. Chapter 13 bankruptcy can eliminate your second mortgage completely while bringing any missed payments on your first mortgage current over a three or five year period. In bankruptcy, removing the second lien on a property is called “lien stripping.” You can lien strip only if the value of your house is LESS than what you owe on your first mortgage.

For example, if the value of your home is $175,000 and you have a first mortgage of $200,000 and a second mortgage of $150,000, in a Chapter 13 bankruptcy you completely eliminate the second mortgage and only pay on the first mortgage. Thus, in Chapter 13 bankruptcy you were able to reduce the principal amount of your home by $150,000.

Chapter 13 bankruptcy has many other benefits and, in some cases, can save your home. To learn more, please visit Black & LoBello’s Bankruptcy Website for more details.

Randy M. Creighton, Esq.

Tagged with: 13 • alternatives • asset • Bankruptcy • Black & LoBello • deed • deed-in-lieu • foreclosure • in • Las Vegas • lease • lender • lieu • limitations • loan • modification • negotiate • Nevada • of • principal • protection • reduction • sale • short • statute

Will Filing for Bankruptcy Protection Affect My Job?

On July 27, 2010, in Bankruptcy, Employment Law, by blacklobellolaw

As Nevada continues to lead the country in per capita bankruptcy filings, many Las Vegans are concerned they might be fired or face other retaliation by their employers if they file bankruptcy.

Nevada, like most states, considers employees “at will” which means that employees can be fired for any reason or even no reason as long as it is not done in violation of certain public policy protections such as race or gender. However, bankruptcy code specifically states that employees may not be fired simply because they filed for bankruptcy. The Bankruptcy Code, at 11 U.S.C. sec. 525(b), states that “No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt.” Employees terminated unlawfully based on filing for bankruptcy may receive back pay including fringe benefits and reinstatement, and may also recover damages for emotional distress.

However, it is highly unlikely that employers or anyone else will ever know who files for bankruptcy unless the employee discloses that information. The only parties that will know are creditors and any co-debtors (co-signers). No one stands outside the court house to read off the names of those who filed for bankruptcy that day and the names of people who have filed for bankruptcy are not published in local newspapers or community newsletters.

In summary, employers will only know if an employee files for bankruptcy protection if that employee tells them. Furthermore, if an employer does somehow learn of the filing and attempts to retaliate against the employee because of the bankruptcy, the employee can turn to the protections provided by the bankruptcy code.

Randy M. Creighton, Esq.

Tagged with: 13 • at will • Bankruptcy • Black & LoBello • Chapter • co-debtors • co-signers • creditors • employee • employer • Las Vegas • Nevada

REALITY CHECK: Loan Modifications Rarely Include A Principal Reduction

On July 26, 2010, in Bankruptcy, Finance, Mortgage, by blacklobellolaw

Las Vegans are subjected to a non-stop barrage of commercials and advertisements from people and companies promising principal reductions through loan modifications. However, the majority of loan modifications do not include a principal reduction.

The majority of loan modifications come in three different forms:

The lender reduces your interest rate to no lower than 2%;
The lender increases the term of your loan to thirty (30) or sometimes forty (40) years from the date you sign the agreement; and
The lender MAY forbear on a portion of the principal or, in layman’s terms, the lender will not charge interest on a portion of the loan. However, the borrower will owe whatever the forbear amount is at the time the house sells or at the end of the term of the new loan. In some cases a lender may blend these tools to modify your loan.

The goal of any loan modification is to reduce the amount due and owing on the home plus any costs relating to taxes, HOA, and insurance to an amount of 31% of your gross income OR to an amount that is affordable to you.

For example, a borrower’s gross income is $6,500 per month and the mortgage plus taxes, insurance, and HOA is $2,500 month at an interest rate of 6.25%. The outstanding principal balance of the loan is $400,000. Therefore, the lender must reduce the monthly mortgage payment plus taxes, insurance, and HOA to $2,015 ($6,500 X 31%). If taxes, insurance, and HOA equal $300 per month then the lender must change the terms of the loan so that a payment on the principal amount of $400,000 will equal $1,715. This can be accomplished if the lender reduces the interest to 3.5% and changes the term length of the loan to thirty (30) years from today.

A successful modification is not always the outcome. If, in the above example, the homeowner’s gross income was only $4,200, the lender would reduce the monthly mortgage payment plus taxes, insurance and HOA to $1,302 ($4,200 X 31%). Again, the taxes, insurance and HOA equal $300 per month. Therefore, the lender must change the terms of the loan so that a payment on the principal amount of $400,000 will equal $1,002. These payment adjustments are not possible without either a principal reduction or forbearance on the principal of the outstanding due and owing. Lenders are very reluctant to allow either of these options.

Declaring chapter 13 bankruptcy may also be able to reduce or eliminate many other debts, including a second lien on a property which is something no loan modification can do. Chapter 13 can stop a foreclosure and allow a borrower up to five years to catch up on the missed payments. Many homeowners are able to catch up on their missed payments if they are given the time to do so. Modifying a loan directly with a mortgage company will normally allow a matter of months, not years, to spread out the missed payments.

Knowing all the options makes for a more informed decision. A good attorney can, and will, freely discuss which option is a better solution for you.

Randy M. Creighton, Esq.

Tagged with: 13 • 31% • Bankruptcy • Black & LoBello • forbearance • foreclosure • gross • HOA • income • insurance • Las Vegas • loan modification • Mortgage • Nevada • payments • principal reduction • Taxes

New HAMP Guidelines Take Effect June 1, 2010

On May 26, 2010, in Bankruptcy, Mortgage, Real Estate, by blacklobellolaw

The federal government provided new Home Affordable Modification Program (HAMP) outreach and communication guidelines for foreclosure actions while evaluating the borrower. These guidelines provide additional protection for delinquent borrowers who have filed bankruptcy but would otherwise be eligible for HAMP benefits. Some key highlights from the directive include:

FORECLOSURE

The servicer must evaluate the borrower’s eligibility under HAMP and determine ineligibility before referring the borrower to foreclosure (or make “reasonable solicitation efforts”).
If foreclosure activity has already been initiated, the foreclosure sale cannot occur until after the servicer determines if the borrower is ineligible under HAMP (or makes “reasonable solicitation efforts”).
The servicer must give the borrower 30 days to respond to HAMP “Non-Approval Notices” in certain circumstances before conducting the foreclosure sale.
The servicer must provide, in writing, to the foreclosure attorney certification that the borrower is ineligible for HAMP before conducting the foreclosure sale.

BANKRUPTCY

A borrower in active Chapter 7 or Chapter 13 bankruptcy or the borrower’s attorney or bankruptcy trustee can request the servicer to consider the borrower under HAMP. The servicer can no longer decline the borrower as a “proper exercise of discretion.”
If the borrower has been approved on a trial loan modification and files a Chapter 7 or Chapter 13, the servicer may not deny the borrower a permanent modification simply for filing bankruptcy.
If a delinquent borrower has a discharged Chapter 7 and chooses not to reaffirm, the first lien mortgage debt is still eligible under HAMP with the following provision added to the permanent modification agreement: “I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the loan documents. Based on this representation, the lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”

Homeowners struggling to make mortgage payments or feeling their lender or servicer has not worked with them on a loan modification should call a bankruptcy attorney. For a copy of the full disclosure, see Supplemental Directive 10-02.

Tagged with: approval • attorney • Bankruptcy • borrowers • chapter 13 • chapter 7 • debt • delinquent • eligibility • first lien • foreclosure • guidelines • HAMP • home affordable modification program • Las Vegas • late payments • Nevada • protection • solicitation • trial • trial loan modification • trustee • update • waiting period

“Developers victimized by commercial real estate slump” Tisha Black Chernine quoted in the Las Vegas Business Press

On March 9, 2010, in Bankruptcy, Corporate, Finance, Real Estate, by blacklobellolaw

A Las Vegas Business Press article discusses the growing trend of lenders coming after developers for their personal holdings

Read the full story here

Tagged with: 2007 • Bankruptcy • Brian Shapiro • chapter 7 • Community Bank • corporate bankruptcy • filing • giant banks • Las Vegas • Lenard Schwartzer • lenders • Main Street • Real Estate • Silver State Bank • small banks • Southern Nevada • Tisha Black-Chernine

Black & LoBello

A full-service law firm serving the Las Vegas community

How To Choose The Right Bankruptcy Lawyer

6 Mistakes to Avoid On The Eve Of Bankruptcy

The Automatic Stay In Bankruptcy

What is the Meeting of Creditors?

The Chapter 7 Discharge

Chapter 13 Bankruptcy Or Loan Modification?

Will Filing for Bankruptcy Protection Affect My Job?

REALITY CHECK: Loan Modifications Rarely Include A Principal Reduction

New HAMP Guidelines Take Effect June 1, 2010

“Developers victimized by commercial real estate slump” Tisha Black Chernine quoted in the Las Vegas Business Press

Read the full story here

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