• The difference between a debt negotiation services provider
• How to file bankruptcy
• How to avoid repossession of an automobile

In part 2, we’ll answer some of the most common questions on Chapter 13 bankruptcy.

How does a Chapter 13 bankruptcy differ from a Chapter 7?
A Chapter 7 bankruptcy allows for the full discharge of unsecured debts such as credit cards, medical bills, and personal loans. To file personal bankruptcy under Chapter 7, a filer must first pass a means test which takes income, assets, expenses, and liabilities into consideration. To file a Chapter 13 bankruptcy, a filer will usually have an income level above the state median and assets valued over $100,000. Instead of a full discharge of debts, the result of a Chapter 13 filing is that a court approved payment plan is established requiring the filer to make payments over a period of three to five years.

Are Chapter 13 attorneys worth the money?
Due to the complexity of the bankruptcy process and the various actions which can produce favorable outcomes, Chapter 13 attorneys are usually well worth the cost. Chapter 13 lawyers can save someone filing personal bankruptcy hundreds of thousands of dollars through actions such as lien stripping. This action effectively discharges any home loans which are subordinated to the first mortgage if the value of the home has fallen below the balance due on the first mortgage.

How will I know which type of bankruptcy will give me the best result?
The best way to determine whether to file a Chapter 13 bankruptcy or a Chapter 7 is to consult with an experienced bankruptcy attorney. An initial consultation can confirm whether filing bankruptcy will provide the best option or whether there might be a better solution for your personal situation. If a bankruptcy filing is determined to be the best option, having a qualified bankruptcy attorney navigate the process can ensure that all opportunities are explored and acted upon.
Regarding the decision to file personal bankruptcy, there are no questions which shouldn’t be asked. Work with an experienced bankruptcy lawyer, ask any question that comes to mind, and start rebuilding your financial future.

What are the differences between going with a debt negotiation services provider and filing a Chapter 7 bankruptcy?
The biggest difference is that the end result provided by debt negotiation services is the establishment of a payment plan which serves to pay off balances of debt on credit cards, medical expenses, and other unsecured debts. These balances are reduced via negotiations between the service provider and the creditors listed in the settlement. The end result of a Chapter 7 filing is that these same types of balances are discharged by the court in total, meaning that the debtor has no further obligation to make payments on the balances.

How do I file bankruptcy?
This first depends on whether the filing will be for a Chapter 7 or a Chapter 13 bankruptcy. Prior to filing a Chapter 7 bankruptcy, the filer must take a means test which takes income, expenses, assets, and liabilities into account. As a rule of thumb, if the filer’s income is below that of the state’s median income, a Chapter 7 bankruptcy will be permitted. For either a Chapter 7 or a Chapter 13 bankruptcy, filers can go directly to the court but it is highly recommended to have an experienced attorney do the bankruptcy court filing.

Can I avoid repossession of my automobiles with a bankruptcy court filing?
A bankruptcy court filing stops all collection efforts including vehicle repossessions. A Chapter 7 stops the process during time the bankruptcy filing is active but balances must be brought current shortly after the bankruptcy process is completed. A Chapter 13 bankruptcy can actually avoid repossession with the use of an “auto cram down”. An auto cram down can reduce monthly payments, reduce the amount due, and allow for payments to be caught up over time through a court approved payment plan.

We’ll tackle additional bankruptcy questions in our next blog post.

When you think of filing bankruptcy or are forced to file bankruptcy, chapter 7 bankruptcy is what you want to qualify for. A chapter 7 bankruptcy will eliminate most unsecured debt completely if you qualify under the “means test”.

Bankruptcy lawyers who specialize in chapter 7 bankruptcy can quickly evaluate if you are a good candidate for filing bankruptcy and if so, how to file bankruptcy. Most bankruptcy lawyers file bankruptcy chapter 7 as well as filing bankruptcy chapter 13. A bankruptcy file these days can be a complicated matter, even if it’s a simple chapter 7 bankruptcy.

As bankruptcy lawyers we are filing bankruptcy every day, not one bankruptcy file every seven years. We have had many clients who tried to file bankruptcy on their own make mistakes and get their bankruptcy file dismissed. Bankruptcy lawyers have the knowledge and expertise to file bankruptcy, and if bankruptcy lawyers make a mistake on a bankruptcy file they are held countable. If you need to file bankruptcy, and want to file chapter 7 bankruptcy then make sure your bankruptcy file is seen by experienced bankruptcy lawyers and not a law clerk.

The bankruptcy lawyers at the Law Offices of Zhou & Chini personally oversee every bankruptcy file and file bankruptcy themselves. Even a simple chapter 7 bankruptcy can overwhelming to someone filing bankruptcy on their own. Typically, when someone has to file bankruptcy they are not in a good state of mind. Dealing with creditor harassment and filing bankruptcy at the same time isn’t easy for most consumers without bankruptcy filing experience. Most bankruptcy lawyers are happy to discuss their fees for filing bankruptcy, and a chapter 7 bankruptcy in California runs between $1,500.00 and $2,500.00 with a good attorney.

Lawyers who file bankruptcy are not just bankruptcy lawyers, they are real attorneys who have gone through years of law school and training to properly file bankruptcy. While most people think chapter 7 bankruptcy is a simple bankruptcy file, this simply is not the case for many. If you are borderline on the means test or disqualified for a chapter 7 bankruptcy filing, good bankruptcy lawyers may be able to still get you qualified to file chapter 7 bankruptcy. Let’s consider the fact that in California income levels disqualify many for chapter 7 bankruptcy, so getting a free consultation from a couple bankruptcy lawyers is advisable.

If you are considering filing bankruptcy and want to see if you qualify for a chapter 7 bankruptcy then the bankruptcy lawyers at the Law Offices of Zhou & Chini can qualify you right over the phone. If you decide to file bankruptcy yourself make sure your bankruptcy file is properly executed so your case is not dismissed.

Filing bankruptcy is not the end of the world but an opportunity for a fresh start. Whether you decide to use our bankruptcy lawyers for filing bankruptcy of file bankruptcy on your own, the bankruptcy lawyers at the Law Offices of Zhou & Chini with you the best.

For a FREE consultation to see if you qualify for a chapter 7 bankruptcy please continue browsing ZhouChiniLaw.com or call (888) 483-2902.

» If you are a business owner or own multiple properties you must consult a bankruptcy attorney that has experience with Chapter 11 bankruptcy as you will probably not qualify for Chapter 7 or Chapter 13 bankruptcy.

When filing bankruptcy a consumer is subject to the “means test” since implemented with new bankruptcy laws in 2005. The means test is the basic measure to see if someone qualifies for a chapter 7, which will allow them to completely eliminate their unsecured debt like credit cards and medical bills or chapter 13, which is a repayment plan (typically pennies on the dollar). While there are many California bankruptcy attorneys to choose from, most bankruptcy attorneys in California mainly practice chapter 7 bankruptcy. If you are delinquent on your mortgage and want to save your home with bankruptcy you typically will need to file chapter 13 bankruptcy.

While debtor’s need to know their options to bankruptcy, like debt settlement, there are various reasons why someone may find it necessary to file bankruptcy. A good reason may be to avoid a wage garnishment or eliminate one’s personal liability in the event of a judgment or a lien filed against them. Additionally, if one is a homeowner in foreclosure and wants to save their home, a chapter 13 will allow them to repay their arrearages.  Also, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to continue doing business. These people should consider filing chapter 11 bankruptcies. Under chapter 11, the debtor can seek an adjustment of their debts, either by reducing the debts or by extending the time for repayment of what’s owed.  Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code rather than the need for a chapter 11.

As mentioned before, one of the main advantages of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to “catch up” past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707. Basically, filing bankruptcy with a bankruptcy attorney is similar to filing your taxes with a good CPA. A good bankruptcy attorney knows how to save you money and protect your best interest. You do not want to be accused of bankruptcy fraud as it’s a federal offence.

The Law Offices of Zhou & Chini represents clients throughout California and has office locations throughout Southern California. In Riverside County we serve the cities of  Banning, Beaumont, Blythe, Calimesa, Canyon Lake, Cathedral City, Coachella, Corona, Desert Hot Springs, Hemet, Indian Wells, Indio, La Quinta, Lake Elsinore, Moreno Valley, Murrieta, Norco, Palm Desert, Palm Springs, Perris, Rancho Mirage, San Jacinto, and Temecula San Bernardino County including Adelanto, Apple Valley, Barstow, Big Bear Lake, Blythe, Chino, Chino Hills, Colton, Fontana, Grand Terrace, Hesperia, Highland, Loma Linda, Montclair, Needles, Ontario, Pomona, Rancho Cucamonga, Redlands, Rialto. We also serve the entire county of San Bernardino, including the cities of Big Bear, Running Springs, Upland, Victorville, Yucaipa, and Yucca Valley. With three Orange County locations in the cities of Irvine, Orange and San Juan Capistrano we serve the entire Orange County area, including the cities of Anaheim, Aliso Viejo, Brea, Dana Point, Laguna Beach, Laguna Niguel, Lake Forest, Coto De Caza, Fullerton, Mission Viejo, Rancho Santa Margarita Trabuco Canyon, Santa Ana, San Clemente and Yorba Linda. In the  Los Angeles County the Law Offices of Zhou & Chini has locations in Long Beach, Pasadena and Woodland Hills servicing all of the Los Angeles and San Fernando Valley including Arcadia, Burbank, Calabasas, Hidden Hills, Pico Rivera, Lakewood, Bell, Maywood, Rosemead, Monterey Park, Covina, Gardena, Hermosa Beach, Redondo Beach, Inglewood, Tarzana, Studio City, Hollywood, Beverly Hills, Mission Hills, Carson, Glendale,  Glendora, Long Beach, Los Angeles, Norwalk, West Covina, and Whittier. We also service all of San Diego County from Oceanside to San Ysidro with locations in Sorrento Valley and Del Mar. Whether our clients are individuals or small business owners the Law Offices of James D. Zhou & Ron Chini have all the answers. For a free and confidential consultation with an experienced bankruptcy attorney call the Law Offices of Zhou & Chini today at (888) 483-2902

• For example, you have a house that use to be worth $750,000, and is now worth $500,000 and there are two outstanding mortgages in the amount of $550,000 (1st mortgage) and $100,000 (2nd mortgage), then section 506(a) can be applied. In this scenario the value of your home is $500,000 being less first mortgage, which would allow you to strip off the second mortgage. In this situation, your second mortgage is completely unsecured.

During the term (typically 5 years) of your Chapter 13 plan your 2^nd mortgage will be treated as unsecured debt, and will be repaid the same percentage as the rest of your unsecured creditors. In a chapter 13bankruptcy your arrearages on your 1^st mortgage must be repaid before any of your unsecured debt. A 2^nd lien that’s underwater will be treated just like credit card or medical debt.

In order to remove your second mortgage off your property you file a lien stripping motion with the court (11 USC §506 (a)). Most courts require that you file a lien stripping motion that will allow you to obtain a court order approving the removal of your second mortgage. Once your lien stripping motion is approved, your second mortgage will be treated as unsecured debt in your Chapter 13 bankruptcy case.

Your Chapter 13 plan must be completed in order to remove your 2^nd mortgage. If your Chapter 13 bankruptcy case is dismissed or converted to a chapter 7 then the lien from your second mortgage will not be removed.

We have a Sample Lien Stripping Motion below for your review.
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
RIVERSIDE DIVISION
In re:
NAME OF DEBTORS
Debtor(s).
Debtor(s)
NAME OF DEBTORS
Movants,
v.
SECOND TRUST DEED
Respondent

Case No.:
NOTICE OF HEARING AND MOTION FOR
ORDER TO AVOID LIEN OF SECOND
TRUSTEE DEED HOLDER (NAME )
DATE:
TIME:
CTRM:
TO HE HONORABLE (NAME OF JUDGE), (NAME OF TRUSTEE), CHAPTER 13
TRUSTEE, (SECOND TRUSTEE DEED HOLDER)., and all other interested parties:
NOTICE IS HEREBY GIVEN that on (DATE OF HEARING) at (TIME OF
HEARING), (LOCATION OF HEARING), debtors (NAME OF DEBTORS), will move this court for an order avoiding the lien of second trust deed holder (NAME)., from debtors’ real estate located at (ADDRESS OF PROPERTY), under 11 U.S.C. Section 506(a), on the basis that the said lien is wholly unsecured.

Pursuant to Local Bankruptcy Rule 9013-1(f) any opposition to this Motion must be filed and served on debtors and debtors’ counsel no later than fourteen (14) days prior to the above hearing date. Failure to file a timely response to this Motion may result in a waiver of your right to oppose the Motion and the Court may grant the requested relief without further notice to you. The Court has jurisdiction to hear this matter pursuant to 28 U.S.C. Sections 157 and 1334. (NAME OF DEBTORS), the debtors in this Chapter 13 case, are interested parties and have standing to bring this Motion. FACTS
this case was commenced by the filing of a voluntary petition under Chapter 13 of the Bankruptcy Code (11 U.S.C.) on (DATE). At that time, debtors owned [and resided in] the real property located at (ADDRESS OF PROPERTY). The legal description of the real property is (LEGAL DESCRIPTION OF PROPERTY), in the (CITY, COUNTY, AND STATE) and Assessor’s parcel number (PARCEL NUMBER). The fair market value of the property as of the time the petition was filed was (FAIR MARKET VALUE) (See Debtors Declaration, attached hereto as Exhibit 1 and incorporated by reference). The property secured two loans. The first loan is secured by a trust deed held by (FIRST TRUST DEED HOLDER) in the amount of (OUTSTANDING LOAN) (See Schedule D and A, and Monthly Billing Statement for account number (ACCOUNT NUMBER) attached hereto as Exhibits 2 and 3, respectively, and incorporated herein by reference). The second loan is secured by a trust deed held by (SECOND TRUST DEED HOLDER), in the amount of (OUTSTANDING LOAN) (See Monthly Billing Statement for account number (ACCOUNT NUMBER), attached hereto as Exhibit 4, and incorporated herein by reference.

ARGUMENT Section 506(a) of the U.S. Bankruptcy Code provides that a secured claim is secured only to the extent of the value of the collateral, and unallowed secured claims are void. This section has generated much controversy in Chapter 13 cases because 11 U.S.C. Section 1322(b)(2), which prohibits a modification of the rights of holders of claims secured only by the debtor’s principal residence. However, the Ninth Circuit Bankruptcy Appellate Panel held in Lam v. Investors Thrift (In re Lam), 211 B.R. 36 (9th Cir. B.A.P. 1997), that the protection of section 1322(b)(2) does not apply to holders of totally unsecured claims. This was upheld in Zimmer v. PSB Lending Corp. (In re Zimmer), 313 F.3d 1220 (9th Cir. 2002).Thus, if a debtor can demonstrate that the value of his principal residence is less than senior liens, a junior lien will be determined to be wholly unsecured and thus subject to being avoided.

In this case, the value of the debtors’ residence is (FAIR MARKET VALUE). (See Exhibit 1). The first lien against the property is (OUTSTANDING LOAN), an amount that is more than the value of the property. The second lien of (SECOND TRUST DEED HOLDER) is thus wholly unsecured and can be avoided or “stripped”.

Based on the foregoing, debtors (DEBTORS NAMES), request an order of this Court as follows:. That the lien of Respondent (SECOND TRUST DEED HOLDER). For (OUTSTANDING LOAN-SECOND TRUST DEED), secured by debtors’ real property located at (ADDRESS OF PROPERTY), be determined to be completely unsecured and void; and 2. That any corresponding proof of claim filed by (SECOND TRUST DEED HOLDER) for the second lien of (OUTSTANDING LOAN), be deemed a general unsecured claim with debtors’ Chapter 13 plan; and 3. Should this case be dismissed or converted to any other chapter under Title 11 prior to the completion of the plan and entry of discharge, said lien will remain a valid encumbrance against the real property absent further order of this Court; and 4. For other relief as the Court deems proper.
Dated:
(ATTORNEY NAME)
Attorney for Debtors

The California real estate market has certainly been hit hard, and many homeowners took out 2^nd mortgages and HELOC’s to pay off credit card debt and do home improvements. The need for a highly qualified bankruptcy attorney is growing daily as more homeowners in California are facing foreclosure and lenders are denying loan modifications. When a bankruptcy attorney files a chapter 13 bankruptcy with a lien strip motion it will give someone the opportunity save their home from foreclosure and eliminate their 2^nd mortgage as well. To see if you qualify for this motion or to just receive free legal advice from an experienced bankruptcy attorney call the Law Offices of Zhou & Chini today at (888) 483-2902

Source: U.S. Bankruptcy Court

Just in the first quarter, 4,292 cases were filed in the Santa Ana court of the federal Central District Court of California. That’s a whopping 46.8% more than a year earlier. Even though Orange County bankruptcy filings may not be increasing at the rate of Los Angeles, Riverside or San Bernardino counties Orange County bankruptcy attorneys are busier than ever says James Zhou, bankruptcy attorney with The Law Offices of Zhou & Chini who files bankruptcy in all four counties. “Many Orange County residents are facing foreclosure and have suffered with a significant loss of income and just can’t repay their debts”. Zhou goes on to say, “bankruptcy is not something to be ashamed of, for many it’s a smart choice and the first step to a fresh start”. The bottom line is Orange County has been hit hard just like most of California and bankruptcy filing will probably continue to increase just like foreclosures and unemployment.

Attorneys who specialize in bankruptcies will continue to be busy, said Ron Chini, partner at Zhou & Chini who personally interviews all his clients before filing for bankruptcy. “I focus on helping homeowners avoid foreclosure and eliminating debt while my partner takes on chapter 11 business bankruptcy reorganizations. While many Californians have tried workouts with their mortgage lenders, for the most part loan modifications are not coming quick enough and 2^nd lien holders are now going after borrowers who have defaulted mortgages. Additionally, credit card defaults are at an all time high and debt settlement companies are coming out of the wood work to prey on consumers. Bankruptcy attorneys who focus on eliminating unsecured debt such as credit cards or medical bills with chapter 7 are held to a much higher standard, and far better choice than a debt settlement company. As for Orange County business owners, the economic downturn was so severe that many companies were wiped out before they could even get to a bankruptcy attorney, Chini added. “Typically, we can help them through the troubled times, and they are able to survive and get their affairs back on track”. If you are considering bankruptcy to stop foreclosure, repossession, eliminate debt or a deficiency judgment from repossession a California bankruptcy attorney who handles these matters daily is your best option for bankruptcy information. Bankruptcy laws can be confusing; with the income level of many Orange County residents the means test will help determine if they can file chapter 7 or chapter 13. It’s important to work with a bankruptcy attorney who understands how to work the numbers to help you get the best results. “There are now bankruptcy mills opening up where the attorney is never even involved other than filing under his name” says Attorney James Zhou. This could have a devastating effect to the client if the bankruptcy petition is not filed properly.That why we meet confidentially with every client and personally do the bankruptcy filings. Making mistakes when it comes to filing bankruptcy can be very costly, and we don’t take any chances when it comes to our clients. For a free and confidential consultation with an experienced bankruptcy attorney call the Law Offices of Zhou & Chini today at (888) 483-2902 or visit them on line at www.BankruptcyAttorneyinCalifornia.com.

While the word bankruptcy may carry a negative stigma with it, it may be a very positive choice for many California residents if you’re a numbers person. Bankruptcy chapter 7 and chapter 13 filing in Orange, Riverside, San Bernardino, San Diego and Los Angeles counties are increasing steadily as more Californians find the need to file bankruptcy to get out from under their financial troubles. While bankruptcy myths still exist, many still assume when they file bankruptcy chapter 7 or chapter 13 they will lose everything. This is NOT true at all. You may be able to keep ALL your property and eliminate ALL your debt says bankruptcy lawyer James D. Zhou, partner at the bankruptcy law offices of Zhou & Chini. Zhou goes on to say “I have been a bankruptcy lawyer for over 10 years and have never seen such a perfect storm to help consumers eliminate 2^nd mortgages and unsecured debt”.

Listed below are the possible benefits that bankruptcy:

1. Filing chapter 7 bankruptcy allows for the “discharge” of most, if not all of your debts. Meaning that you are no longer legally obligated to pay the debts and your creditors must immediately stop all collection efforts.

2. Both chapter 7 and chapter 13 bankruptcies prevents real property from being repossessed and halts the home foreclosure process. A chapter 13 bankruptcy plan will consolidate all your payments and allow you to reinstate your loan while a chapter 7 may be a better choice if your 1^st mortgage is current.  Additionally, filing bankruptcy may require creditors to return property that was repossessed immediately.

3. Both chapter 7 and chapter 13 stop the collection process and halts harassing creditor collection calls. This means that creditors must stop attempting to collect on the debts after being notified of bankruptcy filing. If they continue you can sue them.

4. Prevents you from your utilities being shut off if you have delinquent utility bills. If your utilities have been turned off, filing for bankruptcy protection requires the utility company to restore services as soon as possible.

5. Stops/Prevents wage garnishments. If you file bankruptcy your employer will not be able to garnish your pay check.

6. If you are in the foreclosure process or have a trustee sale date filing bankruptcy will stop the foreclosure process and gives you time to catch up on mortgage payments if needed. This means you will not necessarily have to lose your home.

7. Filing bankruptcy will give you an opportunity to dispute false claims from creditors who may be trying to collect more than what it owed to them. You and your bankruptcy attorney will have your day in court to dispute erroneous collection fees.

8. Filing chapter 13 will allow you to strip a 2^nd mortgage lien and liability if your property value is under water. Chapter 7 will eliminate your personal liability on a 2^nd mortgage but the lien will remain on the property. Your bankruptcy attorney must file a motion to strip the lien in a chapter 13.

While bankruptcy will allow for the discharge of a number of debts, others remain non-dischargeable according to federal regulation. Non-dischargeable debts include family support, student loans, certain types of taxes, and criminal fines. Liens, mortgages, and other secured debts will also survive bankruptcy procedures seeing as how they are secured by either some sort of collateral or by the federal government.

The need for a highly qualified bankruptcy attorney is ever so present these days. The Law Offices of Zhou & Chini services the entire state of California and has experienced bankruptcy attorneys doing all the consultations and bankruptcy filing, not paralegals. To reach Zhou & Chini call (888) 483-2902 or visit www.BankruptcyAttorneyinCalifornia.com