Los Angeles Bankruptcy Law Monitor : Los Angeles Bankruptcy Lawyer & Attorney : Christine Wilton Law Firm : Southern California Chapter 13 & Chapter 7 Bankruptcy, Foreclosure

I don't know about you, but I'm tired of seeing those bankruptcy lawyer advertisements that say, "Low Cost," "Cheap Bankruptcy," and "$100.00 Starts."  For $100.00 dollars that lawyer will do nothing more than deposit your money into their business account. Always remember that advertising is advertising even when a lawyer does it.  We just have more rules than the rest of the marketplace.  I start with the fact that we must declare that,

"We are a debt relief agency.  We help people file under the Bankruptcy Code,"

in all our advertising because Congress said so and the Supreme Court upheld this in a recent decision.

The truth is that there are costs that you must pay when filing bankruptcy. First, you must take a pre-filing credit counseling course that costs anywhere from $5.00 to $50.00 depending upon whether you're filing a single or joint case, or on an emergency basis.  There is also a post-filing financial management course that is required with costs in the range of $25.00 to $50.00.  Then, there is your filing fee of $299.00 for a Chapter 7 case, and $274.00 for a Chapter 13 case.  The total so far is over $300.00 and we haven't even begun to talk about whether you'll hire a petition preparer or an attorney. 

Remember that you can file bankruptcy without a lawyer, but I suggest that you at least get a free consultation before you go it alone, or Pro Se. You can also find important information from our local court's website to guide you along this process; just click on "don't have an attorney?". 

You can hire someone to prepare your petition that is not a lawyer.  A petition preparer service has pitfalls to it because they cannot tell you how to answer the questions and what information to include in your petition. Also on the court's website, under news and publications, you can locate a list of enjoined petition preparers that have fowled up many a debtors cases.  Be sure to do your research before you hire someone to prepare your petition for you.

If you decide to hire an attorney to represent you, be sure you meet with them personally.  Many of these low cost starting campaigns are run by law firms that mill you through the process and have you work with non-lawyer staff.  They're a breeding ground for malpractice and you miss out on having an attorney review your entire financial situation to partner with you toward your strategic goal of financial freedom from your debts.  You need a partner, not another creditor. 

Caveat Emptor~~Buyer Beware!

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Are you one of those people that gets a large tax refund every year and you pay bills; or take a vacation with it?  You're providing the federal government with a free, no interest loan on YOUR money if you do. MSN posted this article, How to Adjust your Tax Withholdings, which provides a step-by-step guide to show you how to adjust your tax withholdings to put more money each paycheck in your pocket.  Why should you do this you ask? 

Besides the fact that you're loaning your money to the government free of interest and you know they would never reciprocate the sentiment, you're needlessly tying up your money in an account you cannot access but once a year when your big fat refund arrives. Besides, if you need to file bankruptcy, the trustee has the power to take that tax refund to pay creditors.

Taking charge of your money requires a disciplined approach.  Creating a budget  that includes your monthly bills is the first step.  You also need to include those annual bills like insurance and taxes and set up a savings account, making regular monthly deposits to be sure the money is there when the bills arrive.  I know savings rates are low, but it's better than tying up your money for a year and making nothing for handing it over to the feds for a while.

When it comes to filing bankruptcy under Chapter 7, the trustee's job is to look for assets to take from you to pay your creditors.  Any tax return greater than $500.00 can and will be taken by the trustee.  Adjusting your income tax withholding is an easy remedy for you to not only break even at tax time, but leave nothing for the trustee to take to pay creditors.  Consult your tax advisor and your bankruptcy lawyer  to create the best strategy for you.

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Every time I sit in court on confirmation hearings there are at least a few cases that get dismissed because the debtor's did not complete their court required pre-filing credit counseling course before they filed their bankruptcy case. The Bankruptcy Code is very clear on this and

Your case will get dismissed if you fail to complete the course prior to filing your bankruptcy case.

There are plenty of courses to choose from and a few will provide you with a completion certificate on an emergency basis.  You can file your bankruptcy case, the moment your course is complete and can file the certificate at a later time.  Since the course certificate is date and time stamped, the court will be able to confirm that you've completed the course before your bankruptcy case was commenced.

Here's a list of approved credit counseling agencies.  Just click on your state from the drop down menu and you can choose from any company on the list.  Here in California, we have the best deal in the market for pre-filing credit counseling courses.  This course was once offered for free, but now the certificate costs $5.00.  For this low cost course, go to Consumer Bankruptcy Counseling. Save yourself the hassle of filing twice and comply with the rules.  Call your local bankruptcy attorney for a free consultation if you're not sure what course of action is right for you.

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By Christine A. Wilton, Esq.

Los Angeles County Economic Development Corporation recently rolled out their 2011-2012 Economic Forecast & Industry Outlook. I was privileged to attend our the Lakewood 2011 Economic Forecast Luncheon hosted by the Greater Lakewood Chamber of Commerce and other local business supporters.  There is the agreement reality that the recession ended in 2009 and economic recovery is underway. I see several problems with this report.

This forecast is overly optimistic and underestimates the realities of  the employment marketplace, housing and the increased debt load of both Americans and its governments. The employment or unemployment numbers fail to include the underemployed who still work for less pay and those that have simply given up looking for work. The other sector that is not being considered in these numbers are the young people looking to get into the workplace, but cannot due to the competition for jobs. Unemployment is at

18.3% in the City of Paramount, and

Norwalk, Bellflower and Long Beach are hovering over 13%, according to Dr. Sidhu's report.

As I have said before, the housing market will continue to stay in a slump as the sub-prime mortgage crisis continues, the Adjustable Rate Mortgage notes adjust upwards and homeowners continue to avoid bankruptcy like the plague for fear of their precious credit scores. We're currently hearing rumblings of another wave of forclosures.  Since California courts don't really care who forecloses or even whether they have perfected their security interest against the Debtor's real property, then we will continue to lose our American Dream en masse.

Consumer spending remains low and the government spending has been propping up this flailing economy. The recession is not over and the lies to the American public must stop. Every one of us must take swift action in terms of dealing with our individual debts before this economy will recover. As my favorite bankruptcy guru Max Gardner always says, "Praise the Lord and pass the bankruptcy petitions."

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