Month: October 2022

What You Should Know Before Filing for Bankruptcy

Posted on October 31, 2022 by - Bankruptcy

filing for bankruptcy

When debt piles up beyond what you can manage, it can feel like drowning. You receive a constant flood of letters and phone calls from collectors, and the compounding interest takes on a life of its own. For people in this situation, declaring bankruptcy can be an attractive option. It wipes out many, if not all, of your debts and allows you a fresh start. 

However, bankruptcy is not to be taken lightly and is a complicated process. Here is what you should know before filing for bankruptcy.

Two Types of Bankruptcy

The first thing to be aware of before filing for bankruptcy is that there are two primary types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7, also called liquidation bankruptcy, is the more common type. The debtor’s “non-exempt” assets are sold off, and creditors receive the proceeds; after this, the debts are canceled. California, in particular, has generous exemptions regarding the types of property that must be sold, allowing people to keep more of their essential property. However, there is a means test for Chapter 7 bankruptcy, preventing it from being used by high-wage earners.

Under Chapter 13 bankruptcy, debt is reorganized, and the debtor must follow a pre-approved repayment plan over three to five years. After completing this plan, the debts are considered satisfied. Chapter 13 is more appropriate for people with a steady income.

Not All Debt Is Canceled by Bankruptcy

People may get the wrong idea that any debt is wiped out by filing for bankruptcy, but that is not the case. Bankruptcy can only eliminate “unsecured” debt, such as credit card debt and medical bills. A debt is secured when it is backed by collateral, as is the case with home and car loans. Creditors of secured debt may still seek to repossess the collateral assets. Also, student loans are not covered by bankruptcy.

Hiding Assets or Going on a Spending Spree Can Get You in Trouble

When people know they will file for bankruptcy, they sometimes convey their assets to others to keep them from being liquidated. They may also go on a big spending spree, thinking the new debt will be canceled, so it’s free money. Both behaviors are considered fraud and can get you in legal trouble. Creditors can also object to recent debt, which will keep you from getting the clean slate you need.

Bankruptcy Is Not Fast or Free

Don’t expect an overnight solution by filing for bankruptcy. Chapter 7 bankruptcy typically takes around four to six months to close, while Chapter 13 cases stay open for years. You should also be aware that both types of bankruptcy require hundreds of dollars in filing fees.

Long-Term Consequences

Declaring bankruptcy can provide you with the debt relief you need, but there are lasting consequences. For example, a bankruptcy stays on your credit report for ten years, making it harder to take out a loan or find a place to live.

A Bankruptcy Attorney Can Be a Big Help

It’s important to know what you should expect when filing for bankruptcy.  Hiring a bankruptcy attorney may not be the first thing that comes to mind, but doing so can help you avoid costly mistakes. Filing for bankruptcy is a complicated legal process, and the clerks and judges cannot give you legal advice. A lawyer can also help ensure that you are maximizing the amount of property you are allowed to keep from being sold off, so you’re not starting over from scratch. Schedule an appointment today to meet with an experienced bankruptcy attorney and discuss your options.

Why Hire a Real Estate Attorney Before Buying a House?

Posted on October 14, 2022 by - Residential Real Estate

Why Hire a Real Estate Attorney

Buying a home consistently ranks as one of the most stressful life events people experience. Not only is a lot of money on the line (for most of us, it is the single largest purchase we’ll ever make), but our hopes and dreams for the future are tied up in it. Home buyers regularly consult with a slew of experts along the way—real estate agents, inspectors, mortgage bankers, title examiners, etc.—and yet, despite the fact that it is a complex legal transaction, they rarely hire a real estate attorney.

Though many people will not find it necessary to hire a real estate attorney before buying a house, there are several reasons why it may still be a good idea.

Negotiation

There is usually a lot of wiggle room when it comes to housing prices. Still, buyers regularly leave money on the table because they are simply not comfortable with negotiating. While many real estate agents are great at their jobs, they are generally paid a percentage of the purchase price, so they have every incentive to close the deal and not much motivation to drive the price down.

Real estate attorneys, on the other hand, love to negotiate. The net savings gained from letting a lawyer haggle on your behalf generally more than justifies the expense of hiring them.

Smoothing Out Title Issues

Title and lien issues can derail a home purchase or make your life a nightmare if they are only discovered after the fact. A real estate attorney can perform the title and lien search for you. If the search turns up any potential problems, they can either help resolve them or, just as importantly, let you know when it’s time to walk away from the transaction.

Reviewing Contracts

As anyone who has ever purchased a home can attest, there is a lot of paperwork involved. Most buyers have no frame of reference and are simply told everything is “standard,” so they sign whatever is put in front of them: HOA covenants, inspection reports, disclosures, and more.

While there is usually nothing sinister going on, these documents are important, and the fact that you signed them may come up later. At a minimum, a real estate lawyer can review them and let you know what you’re getting into, but they can also draft new agreements and eliminate many of the junk boilerplate clauses.

Facilitating Complex Transactions

Even a typical home purchase is complicated, but some transactions are significantly more complex. Sales involving trusts, corporations, and other legal entities present different issues, and the assistance of an attorney is strongly encouraged.

Easier Closing

Closing a real estate deal involves orchestrating multiple complicated components, such as filing the deed, closing escrow, and delivering the final payment. Having an attorney on your side can help greatly with keeping everything on track and negotiating any last-minute issues that pop up, such as unexpected home repairs.

Talk to a Real Estate Attorney Today

The best way to find out what a real estate lawyer can do for you is to talk to one. Whether you want full-service assistance throughout the transaction or just need to deal with a specific issue, our experienced attorneys can help ensure your home purchase goes as smoothly as possible. Contact our office to schedule an appointment.