Understanding California Homestead Laws

How do the California Homestead Exemptions Work?

The state government of California, just like most others in the United States, has set in place different measures protecting its citizens from property seizure by creditors when they file for bankruptcy. These serve to ensure that the debtor does not end up in poverty, further disadvantaging such an individual as well as their immediate families and their dependents.

One such measure set in place by the Californian authorities is the Homestead Law.

The Homestead law, as interpreted by the California Judicial Council, establishes limits to actions of creditors against the individual and the equity accrued in their homestead. In this manner, the procedure by declaration allows homeowners as well as small property owners to declare their assets as being their homestead, effectively shielding them from having to sell them to pay off accrued debts.

The Homestead law, in effect, is an extension of the exemption procedures set by the state government to shield the citizens from property loss when they encounter economic challenges.

Homeowners wishing to invoke the homestead law in bankruptcy proceedings are provided with two types of exemptions to choose from, declared homestead and automatic exemptions.

A declared homestead exemption is granted through an application by the owner via the county recorders’ office, who thereafter make the decision to either approve it or otherwise based on preliminary assessments.

An automatic homestead exemption, on the other hand, occurs automatically without requiring the homeowner to specifically file their case with the county recorder.

What then, one may ask, is the difference between the two given that they are meant to serve the same purpose?

The difference between these two lies in their application under the California Judicial Laws. Whilst an automatic exemption serves to protect the homeowner’s equity from the involuntary sale, the declaration of an applied exemption would effectively protect the property and equity from both voluntary and involuntary sale by the actions of a creditor.

The Homestead Law, however, has its limitations in application. The law, for instance, would not protect your assets from a forced sale or auction through a mortgage lender. Similarly, it can only be applied subject to the maximum allowable amounts as set by law. Furthermore, it will not protect your assets in instances of delinquent alimony, child support and mechanic liens.


Bankrupt California Hospital Secures $20 Million to Avoid Closure

Seton Medical Center Sees about 27,000 Every Year

Seton Medical Center is set to receive $20 million in funding after the San Mateo County (Calif.) Board of Supervisors voted to keep the hospital open.

The hospital, located in Daly City, filed for Chapter 11 bankruptcy protection in August 2018. The board will allocate the funds to the company that will acquire the facility hospital from Verity Health, the hospital’s operator.

Verity Health closed its Los Angeles-based St. Vincent Medical Center in January after failing to secure enough funding to keep the facility open.

The board disclosed that two companies are currently bidding to purchase the hospital that was on the verge of closure. The board said the company that will acquire the hospital, which treats nearly 27,000 annually, must keep the facility open.


California Debt Discharge Laws

What Happens to Discharged Debt in California Bankruptcy?

After hearing of a bankruptcy case, it is common practice for law courts in California to spell out terms to guide the discharge of debts by the party filing the case. This crucial step is usually meant to relieve you from the obligation of paying off debts. Issued through a bankruptcy discharge order, it prohibits the creditor from ever taking collection action on the debt against you again.

A debt discharge order is one of the least understood aspects of the bankruptcy laws in California. What with money-hungry bankruptcy attorneys luring debtors with creative terms such as “making your debt disappear”, “erasing your debts” and the likes?

It is not a surprise that many unsuspecting debtors fall for such antics, only to find themselves in trouble with friends, family and relatives or even the IRS later on due to unresolved debt issues. While the terms contained in a debt discharge order may seem to redeem one of the debts ultimately, this, in reality, is rarely the case.

But, what then does a debt discharge order in bankruptcy mean?

The issuing of this order, however, doesn’t mean that the debt has been erased or disappeared. The debt still exists, and one is expected to take steps to clear it following the discharge. The reprieve of the order, however, is that the creditor would have no further legal grounds to take action against you for that debt.

Which thus begs the question, how would the creditor acquire the debt from you? Would they sorely have to rely on voluntary payback since they no longer have a legal ground for collection?

The truth is, a creditor would still have a few means of recovering the debt eventually. One of the most common approaches would be to seek recovery from co-debtors. While the discharge order would exonerate you as an individual from the debt, co-debtors according to California Bankruptcy laws are 100% liable for the debt. Thus a creditor would seek legal action against them in an attempt to recover your debt.

Collecting property used as collateral is also another option at the creditor’s disposal.  Additionally, the IRS may decide to tax the charged-off debt against the debtor in the creditor’s place, though not as taxable income.

While the debt discharge order can provide a creditor with numerous reprieves in dealing with the creditors, it is advisable first to understand the basics of such a request to avoid unforeseen problems in the future.


Identification Documents Required to File for Chapter 7 Bankruptcy in California

Proof of Identity and Social Security Number

The United States Bankruptcy Court has a list of documents it accepts as proof of identity that must be submitted by individual debtors. These documents must be presented to the trustee or the United States Trustee’s representative at the meeting of creditors held pursuant to 341(a) of the Bankruptcy Code (Meetings of Creditors and Equity Security Holders).

The meeting may be dismissed if the debtor fails to submit acceptable proof of identity and Social Security number.

The following government-issued documents are acceptable proof of identity.

  1. A valid state driver’s license
  2. Military photo I.D. card
  3. Official passport from any country
  4. Government employee photo I.D. card
  5. Legal resident alien card with photo
  6. Any government-issued photo I.D. card

Note that the name on the photo identification must match the debtor’s name as listed indicated on the petition.

The trustee or the United States Trustee’s representative will accept the following documents as proof of Social Security number.

  1. An original Social Security card
  2. A statement from the Social Security Administration verifying the number
  3. Medicare card
  4. Military I.D. card

Military I.D. cards and Medicare cards are acceptable only if they provide the full Social Security number.


Understanding the Use of California Bankruptcy Exemptions

What are the California Bankruptcy Exemptions?

While filing for bankruptcy could offer you some degree of relief with your creditors, it is often a frightening albeit heart-wrenching experience for many in the United States. The basis behind this conception is that one risks losing access to their most treasured personal belongings and property if they come to a situation where they are forced to file for bankruptcy. For instance, most states would deny you access to private vehicles and housing when you file for bankruptcy, handing such valuable belongings and property to trustees who may, in turn, sell them to pay your creditors.

California laws, however, offer some degree of relief to the individual after filing for bankruptcy when it comes to personal effects. This comes in the form of bankruptcy exemptions, which protect one from losing some of the essential belongings and amenities.

The California scheme allows one to choose from two exemption lists when filing for bankruptcy under Chapter 7 of the California Civil Codes. The alternate would be for the application of chapter 13 bankruptcy, which allows you to keep everything you own.

Under Chapter 703 scheme 1, you would be allowed to retain your house, cars, household goods and other valuables subject to price scrutiny by the authorities. The plan is tremendously valuable to California residents as it incorporates a catch-all exemption to protect anything of value. In addition to physical property, for instance, this scheme guarantees you the right to other benefits such as social security, local public assistance, unemployment compensation, and veterans’ benefits, among others.

Under scheme 2 of the California bankruptcy laws chapter 7, you would be allowed to keep most of the items in Scheme 1, with the difference being an increased equity stake in housing and real estate. Thus, it would be more beneficial to a person who owns real estate property and which would otherwise be difficult to protect from creditors under the exemption scheme 1 of chapter 7.

These exemption schemes offer relief to California residents while you pick up the pieces and try a fresh start. However, it is worth noting that not everyone is eligible to enjoy them as the state has set about stringent criteria for eligibility.

The choice of which scheme to adopt while filing for bankruptcy entirely depends on what property or benefits you would like to protect from auctioning to pay off creditors. It is, however, advisable to always engage law experts in this field when considering which option to choose.


PG& E Strikes Deal with Disaster-Relief Agencies as It Scrambles to Emerge from Bankruptcy

Utility Company has Created a $13.5 Billion Fund to Compensate Wildfire Victims

Pacific Gas & Electric Company has settled a dispute with disaster-relief agencies (FEMA) and is planning to compensate victims of catastrophic wildfires in California. The company told a federal judge that it had set aside a $13.5 billion for this purpose.

The utility company is racing to emerge from bankruptcy after being sued by victims of the 2015, 2017 and 2018 California wildfires. An investigation determined that the deadly wildfires were ignited by PG& E’s faulty electricity transmission equipment. The San Francisco-based company faced more than $50 billion in claimed losses from the disasters.

Details of the deal struck by California’s Office of Emergency Services, the Federal Emergency Management Agency and the lawyers of the victims were not immediately disclosed.

The agencies wanted to be reimbursed as much as $4 billion for financial assistance provided during the disaster.

The news was well-received by investors, with the company’s stock surging by 10% to close at $13.90 on Tuesday, March 10.


Bankruptcy; Reasons To and Not To File Bankruptcy in Simi Valley

Is Declaring Bankruptcy in Simi Valley a Good or Bad Step?

Bankruptcy is a legal procedure and an option for an individual, a family, or a corporation finding it difficult for them to pay off their debts. An entity opts to file for bankruptcy when it is unable to honor its financial obligations or make due payments to its creditors.

Bankruptcy is not inherently good or bad. Simi Valley bankruptcy law is an essential protection for honest consumers who find it impossible to pay off their debts.

There are several situations in which it will be advisable for an individual to file for bankruptcy:

Filing for bankruptcy could save you from losing some of your important assets like a home or a car. Consider a situation where your current income is not enough to pay off your mortgage. In such a case, a Chapter 13 Bankruptcy could help reorganize your repayment plan and save your home.

A Chapter 7 Bankruptcy, which is usually a last resort, is a good way of relieving yourself from emotional distress caused by creditors knocking on your door every other time at a situation where you have no real income to pay them. In such a situation, giving up all your assets to pay your debts and have peace of mind may serve you better.

However, the process of filing for bankruptcy is not as easy as it seems and it usually requires a lot of sacrifices.

Below are some reasons why you may find it not a good idea to declare bankruptcy:

Your credit score may start going down the moment you declare bankruptcy. Such a cause limits you from taking out loans.

When filing for bankruptcy, you will be required to share your personal financial information in a public court of law. All your lenders, business partners, potential employers, and clients will, for a long time, be able to access your bankruptcy filing.

Filing bankruptcy is not as cheap as the process needs a lot of money. Declaring bankruptcy is a huge financial step. However, in case you realize that your situation has left you in a debt that you are unable to pay, then it is the right step to get you back on track. Do not misuse bankruptcy because it can lead you to a worse financial situation.


Sacramento Mayor Hopes Sacramento Bee will Find New Local Owner

McClatchy Company Filed for Chapter 11 Bankruptcy Protection in February 

Sacramento Mayor Darrell Steinberg hopes “Sacramento Bee” will come under local ownership after the newspaper’s owner, McClatchy Co., filed for bankruptcy protection.

While speaking at a local radio station, Mayor Steinberg also outlined how he plans to preserve the local ownership 163-year-old newspaper.

The company which owns a series of other papers, including Modesto Bee and Fresno Bee, filed for Chapter 11 bankruptcy protection on February 13.

The company announced plans to re-organize its newsrooms as it aims at bouncing back from financial turmoil. The company has since received $50 million debtor-in-possession financing, McClatchy CEO Craig Forman.

He said the company seeks to settle its $700 million debt. The company also plans to hand over the control of the paper to a hedge fund.

Plans are underway to withdraw the listing from the New York Stock Exchange as a publicly-traded company.

McClatchy expects $183.9 million in fourth-quarter revenues, a 14% drop from a year earlier. The paper’s fortunes have been declining in the last six consecutive years.

The company will also plan to address concerns over pension payments.


Are You Bankrupt and Want to File Bankruptcy in Simi Valley? Consider The Following Advice

Any person can file bankruptcy without the help of an attorney. However, due to the long term financial and legal outcomes of bankruptcy, it is highly recommended that you seek the advice of an experienced and qualified attorney.

There are different ways in which your attorney can assist with your case, according to Chapter 7 of the Bankruptcy Code. For instance: “the lawyer can advise you on whether you need to file bankruptcy petition and under which chapter to file, advise you on whether your debts can be discharged and give you the probability of keeping your properties such as home or cars after filing, provide an advice on the tax consequences of filing and also advise you on whether you need to continue to pay creditors, give an explanation of bankruptcy laws and procedures to you, help you to complete and file forms and finally, assist you with mist aspects of your bankruptcy case.”

In case you opt to file personal bankruptcy you must understand the bankruptcy law under Chapter 7 or Chapter 13. Before you begin your journey you need to gather all your financial documents. The documents will give you an overview of the current state of your finances. You should obtain a copy of the credit report form at either form Transunion, Equifax or Experian. Always remember to include all other debts such as personal loans that are not listed on the credit report.

Other documents that you will need include: tax returns for the past 2 years, recent bank account statements, pay stubs or other proof of your income for the last 6 months, valuations or appraisals of any real estate you own, recent retirement account or brokerage account statements, copies of vehicle registration and other documents depicting your income, assets, and debts.

It is advisable you take your time to understand the bankruptcy laws and have an accurate picture of your financial status before you consider yourself bankrupt and proceed to file for bankruptcy.


How Does Simi Valley Bankruptcy Law Work?

An Overview of the California Bankruptcy Law

Sometimes it can be tough to climb out of debt and filing for bankruptcy seems to be the last realistic path that can lead a person out of debt and reclaim their financial life.

California bankruptcy law requires you to disclose every aspect of your financial situation in official bankruptcy forms. After you have filed the bankruptcy forms, the law allows you to start filing paperwork in your local court, along with the filing fee or fee waiver.

As you consider bankruptcy as a means of clearing debt, it is good to keenly explore all other options before coming to such a decision. Simi Valley bankruptcy law guides individuals on the step to take when making such a decision.

A person who files for bankruptcy officially declares in a court of law that it has become impossible for them to pay their debts. The court evaluates their assets and liabilities, and if it finds the person genuinely unable to pay their creditors, they are granted permission to declare bankruptcy.

Simi Valley bankruptcy law, and generally the bankruptcy law in California, contains several bankruptcy exemptions.

In case you have amassed a debt that is greater than your asset value, the only option is to declare bankruptcy.

California law has two categories of bankruptcy:

Chapter 13 Bankruptcy can save you from losing the most important possessions. For instance, instead of your home being seized, you may be allowed some time to catch up on your payments under a new payment plan. It is a type of bankruptcy for people who have an income but are struggling with paying creditors who are demanding immediate payment.

Chapter 7 Bankruptcy is always considered as the last resort. Its aim is to have debts discharged since the debtor has no income or assets to repay creditors.

Simi Valley residents are advised to consider exploring any other options of fully recovering financially before rushing to this resort. Also, you can try using severing budget tips that could be your financial savior.