Save My House! A Last Second Guide to Foreclosure and Bankruptcy in the SF Bay Area. This short book explains the timing of the foreclosure process, the different types of bankruptcy, and the basics of a typical bankruptcy case. After you read it, you will be in a much better position to decide what to do if your home is in foreclosure.

Five Big Lies About Bankruptcy: What the Credit Card Companies Don’t Want You to Know! This book discusses five of the biggest myths out there about bankruptcy. It also gives a short history of how we ended with so many outright lies drifting around in our collective consciousness. The goal of this book is how my clients exhale, relax and focus on the peaceful reality of being debt free without the burden of false facts.

Ten Dumb Things that Can Torpedo Your Bankruptcy Case in the SF Bay Area. Bankruptcy has been around for a long time. And since the beginning, people have been trying to outsmart the system. The trouble is, in most cases, generations have been trying to keep assets away from creditors. If you can conceive of way to “hide” assets, there is probably a law on the books saying you can’t do it. This book is intended as a warning to my clients about the pitfalls of trying dumb things. But it also explains that while in some situations. giving property to someone else might appear innocent, it can have some nasty and unintended consequences both for the giver and the receiver.

The Real Estate Professional’s Concise Guide to Bankruptcy in the SF Bay Area: How to Make Money and Save Your Bacon. When someone files a bankruptcy EVERYTHING grinds to a halt. That includes homes sales. Brokers and agents who understand the bankruptcy process can quickly get the wheels turning again if they jump through the right hoops. This book explains how the automatic stay in bankruptcy works, how to work around it, and most importantly, how to get paid. It also discusses traps for the unwary that could have grave consequences for the real estate professionals’ bottom line.

Debt, Bankruptcy and the Elderly: A Guide for SF Bay Area Residents, Their Parents and Their Children. In my many years as an attorney, I have counseled a lot of elderly clients. Retirement is supposed to be the golden years. For many them, however, life drifts back and forth between fear and anxiety because of crushing credit card debt. With a fixed income, they often simply don’t have the resources to put food on the table and cover the monthly minimums on the credit cards. Sadly, I have seen so many of my clients who pay their credit cards and then go hungry! I wrote this book so that San Francisco Bay Area residents would be able to quickly understand what bill collectors can and can’t do, what it means to be “judgment proof” and how pension, retirement, 401k and Social Security payments are ALL protected from creditors. I give strategies for dealing with nasty creditors. Finally, I explain that in many cases, elderly folks may not need to file for bankruptcy although sometimes they may choose to do it anyway. If you or someone you care about is elderly and in debt, this book is for you.

Even if the United States can't file for bankruptcy, you most likely can!

I have helped out a lot

The first is this: Social security is protected from pretty much all creditors. (The only rare exception may be the US government and in that case, there still may be options to avoid having your social security check intercepted.) This is important. No creditor, no one you owe money to, no one who is trying to collect on a bill you owe can touch your social security! It is protected. This is true for monthly social security payments you have in your bank account (up to a certain limit) and for your right to future payments of social security.

I make a big point of this because I’ve had lots of scared and beaten down seniors come to my office frightened out of their wits because a bill collector has been telling them that their kind of debt can’t be wiped out in a bankruptcy, or their kind of debt is fraud so it’s kept out of bankruptcy. Rubbish like that. The problem of course is that my elderly clients aren’t familiar with the law and are often susceptible to the lies of bill collectors. By the way, California and federal law require bill collectors to be truthful in their communications with the people they are trying to collect from. Violations of federal and state fair debt collection practices laws can subject creditors to fines and punishment. Pensions and other private retirements are also protected from creditors. Keep in mind, however, that these exemptions amounts are not unlimited, so you should probably talk to a knowledgeable attorney before you make decision about how to deal with creditors.

So, here’s my important point: Seniors who are having serious debt problems may not need to file for bankruptcy. Since creditors can’t take their pension or social security, they really can’t do anything to a senior who does not own any real estate. This folks are referred to as being “judgment proof.” In other words, even if a creditor sued and got a judgment against them, the creditor still couldn’t get anything from them. That’s very good news for the elderly and should allow them to sleep better at night.

Unfortunately, unscrupulous debt collectors might continue to call and harass seniors even knowing that they can’t get anything. Their hope is to create such nuisance that the senior will make some sort of payments just so the collector will quit calling for another month. Again, this probably violates federal and state laws with regard to debt collection. But it also can cause a lot of stress for the senior.

In many cases, the elderly individual may elect to file a bankruptcy just to get the harassing bill collectors to stop calling. I have filed this type of case for many clients. We talk about all the issues I discuss above and I reassure them that if they do nothing, no one can take their retirement or social security. Nevertheless, for their peace of mind they elect to file a simple chapter 7 and wipe out the debt once and for all. No more debt, no more phone calls.

I have written a book entitled Debt and the Elderly: A Guide for SF Bay Areas Seniors, Their Family Members and Caregivers. It’s available for free. Just fill out the form below and I’ll send it right out to you. It will answer a lot of questions that seniors or those who care about them or for them are asking these days about debts and bill collectors.

In my East Bay office, I would say that credit cards are one of the number one reasons my clients file for bankruptcy. They have been struggling for years to pay off credit cards with huge interest rates while at the same time trying to put food on the table and new socks and shoes on their kids’ feet. The problem of course is that when hundreds or even thousands of dollars each month goes to credit card interest instead of household expenses, Average Joe and Jane are left with little choice but to pay the basics like clothes, food, gas and insurance with the same credit cards they’re trying to pay off. As many of us know, it’s a vicious cycle.

Again, the short answer is that credit cards can be wiped out in bankruptcy.

A warning: just because credit cards debt can be wiped out in bankruptcy does not means that you can go out and charge up all your cards and then head into an attorney’s office to file a bankruptcy case and wipe them out without any problem. If you make major charges on cards in the months leading up to a bankruptcy filing, the credit card companies may choose to file law suits against you bankruptcy court and try to convince the court that you made all those charges without any intent to repay. This is considered a type of fraud. If the judge agrees with the credit card companies, the judge can declare that one or more of your debts does not get wiped out even though you filed a bankruptcy case.

If you are considering bankruptcy, you should be very careful about credit card use. You should also consider speaking with an experienced Bay Area bankruptcy attorney about the charges you have already made on your cards.

Oakland-area bankruptcy attorney James Pixton is an expert at deciphering credit card issues and can give you an idea of whether you need to worry about particular accounts or charges. He can also help you come up with a game plan to decrease the likelihood that you’ll have problems if you go forward with a bankruptcy case.

To contact bankruptcy attorney James Pixton, give him a call at (510) 451-6200 x101. You can also fill out the quick form below:

The idea is that the collateral provides an additional assurance to the lender that it will get repaid what it is owed. For instance, while a bank might hesitate to loan Average Joe $50,000 based only on Joe’s signature, that same bank might be more willing to consider lending the money when it gets to use the new Made-In-America pickup that Average Joe is going to buy with the $50,000. The pickup acts as collateral which means that if Average Joe doesn’t make the payments, the bank can repossess the pickup, sell it and then use the proceeds (the money from the sale) to pay off or at least pay down the loan.

It’s the same with a home loan. The house itself is the collateral for the loan. If the borrower fails to make payments, the bank can begin a process of selling the house called foreclosure. When the house sells in the foreclosure, the bank uses the proceeds to pay off or at least pay down the loan.

So why does this all matter in bankruptcy? Well, bankruptcy wipes out personal liability (an individual’s legal responsibility to pay) on debts, but in most cases, it doesn’t wipe out the bank’s right to go after collateral. That right to go after collateral is called a lien, a french word that means a leash. Basically the bank holds your car or your house by a leash. If you don’t pay, they grab a hold of that leash and yank the collateral out for from underneath you.

[There are, however, times when a bankruptcy can wipe out a lien as well as personal liability. One of those times is when you have a second mortgage or a line of credit on your house and the home has lost a lot of value. If the circumstances are right, you can wipe out that lien in a chapter 13. Click here to learn more.]

So for most unsecured debt, you file bankruptcy, get your discharge and your liability is wiped out forever. You’ll never have to pay on that debt again, the lender can no longer do anything to collect on it. For secured debt, while the discharge wipes out your personal liability, you will still have to decided whether you want to keep the collateral or give it up. If you want to keep it, you will have to continue making the payments. If you don’t want to keep it, you can give the collateral back to the lender that will be the end of it. Since your personal liability has been wiped out in your bankruptcy case, giving the collateral back to the lender means that the lender no longer has any power to collect on that debt from you.

When you meet with bankruptcy attorney James Pixton, one of the things he’ll discuss with you is what you want to do with loans and collateral. If you want to keep the collateral there are a few different options. Go ahead and make an appointment today. Call (510) 451-6200 or fill out the handy form below:

Rembrandt, the celebrated Dutch painter, filed for bankruptcy at the age of 50.

Rembrandt (1606-1669), the celebrated Dutch painter, filed for bankruptcy in his fifties. Like many of the world’s finest minds and talents, he struggled financially for much of his career.

Fame did not bring unlimited fortune to Rembrandt.

Considered one of Europe’s greatest painters and printmakers, he remains the pride of Holland. During his life, however, Rembrandt lived large. He spent well beyond his means and demonstrated a lust for expensive art, antiques and rarities. In 1656, at the age of 50, Rembrandt was compelled to file for bankruptcy. Over the course of the next two years, all his paintings and prints as well has his house were sold at auction to pay his creditors.

Because of the way bankruptcy worked back then, he couldn’t thereafter sell his art directly to the public, so he devised a method of skirting the law by selling his work through the intermediary of his son who ran an art business. Rembrandt was famous but he was not financially sound.

Although chapter 13 is a very versatile tool, Congress decided that they wanted to limit who was allowed to file for chapter 13. They puts some caps on the amount of debt allowed, and set out what type of persons can file. I know those caps served a purpose at some point. The problem is that with the rising cost of living and the larger debt load carried by so many people in the recession, it’s not too difficult to find yourself over the caps and disqualified from bankruptcy.

Right now, the cap for secured debt (debt with collateral like a house or a car) is about $1.08 million. The cap for unsecured debt is about $380,000. For most “consumers” (regular folks who draw a paycheck and work for someone else, these caps are usually not a problem. For small business owners, however, these numbers can cause some problems. A good bankruptcy lawyer can help you figure out if you are bumping up against those caps and might need to consider chapter 11 instead.

There are a couple things to keep in mind about the chapter 13 caps.  First, real property that is underwater might be split into a secured part and an unsecured part if the value of the property is less than the amounts of the loans against it. For instance, if you owe $600,000 on your house, but it’s only worth $420,000, the bankruptcy court might look at the debt as $420,000 of secured debt and $180,000 of unsecured debt. If you’re a small business owner and have a couple hundred thousand dollars of unsecured business debt, you could have a problem. Again, an experienced bankruptcy attorney can help you figure this out.

Another thing to understand is that “disputed” or “unliquidated” debt is not counted in the unsecured and secured totals. A disputed debt is one that you say you don’t owe. Say you’re involved in a car accident and it’s not clear who’s at fault. Even though you may have been sued by the other driver, that debt is still disputed because you may or may not owe it. Unliquidated debt is debt that you can’t readily attach an amount to right now. Even if you were clearly responsible for that car accident, you don’t know exactly how much the damages are going to be until a judge or a jury decides. That means it’s unliquidated and doesn’t count in the total for purposes of qualifying for chapter 13.

A final thing to keep in mind about chapter 13 is that the person filing for chapter 13 must be employed or have “regular income.” “Regular income” is kind of a wishy-washy term, but it is clear that “no income” is not “regular income.” So if you have no income, you won’t be able to stay in a chapter 13. With no income, chapter 7 might be a better choice or indeed the only option.

Alameda bankruptcy attorney James Pixton careful analyzes his clients’ numbers to make sure they can file the bankruptcy case that is best for them. Call (510) 451-6200 to make an appointment or email him at james@pixlaw.com.

They come from as far south as Santa Cruz, from as far north as Sacramento, from as far east as Modesto, and from just about every town or city on the San Francisco peninsula or in the East Bay. They all come to Alameda so that bankruptcy attorney James Pixton can file their case for them. Why?

The answer is simple. It’s because James makes his clients feel safe, well-informed and respected. You are already freaking out about the prospect of filing for bankruptcy and have heard the horror stories from people who have no idea what they’re talking about. You’ve had sleepless night because of your finances. You’ve probably have some pretty heated arguments with your spouse about the bills and the bill collectors who won’t stop calling. The last thing you need is a lawyer who makes you feel like you’re an inconvenience.

You won’t get that at all when you meet with James Pixton. He calls himself the Bay Area’s friendliest bankruptcy attorney–and he means it! When you first meet him in his quiet little office in a quiet little office building just off Park Street in downtown Alameda, the first thing you’ll notice is his big, confident smile. One thing that James has learned to quickly explain to his new clients is that that smile is not because he doesn’t care about what’s making them anxious, but because he is excited that things are about to get a whole lot better for his news clients. They’re going to be much happier as a result of bringing James into their lives. He loves assuring new clients life is going to be fabulous once they get into bankruptcy protection.

You probably have a lot of questions that you need answered. The internet is great for finding general information, but sometimes it can be difficult to connect what you find there with the real world situation that will be your own bankruptcy case. What are exemptions and why are they important to me and my family? What happens to my house when I file for bankruptcy? What happens to my car when I file for bankruptcy? What happens to my retirement when I file for bankruptcy? Will my creditors be able to embarrass me or hassle me while I’m in bankruptcy? Who will find out about my bankruptcy? Can I lose my job because of filing a bankruptcy? These are all questions flying through the minds of people in your situation–those struggling to pay the bills and trying to figure out if bankruptcy is the solution. James takes the time answer these questions and to anticipate others that may come up.

What if you forget to ask him something at that first meeting in James’ Alameda bankruptcy office? No problem! Give Jim a call and he’ll be happy to chat with you as much as you need to feel comfortable about the bankruptcy process. Pixton Bankruptcy Law usually handles cases on a flat fee. That means you pay one fee and James represents from the beginning of the case to the end. No hourly billing and no clock watching. Just a friendly bankruptcy attorney looking out for his clients.

Here’s the first thing I tell people when I meet with them in my Oakland bankruptcy office: Don’t believe the horror stories you hear about the blood bath that results when credit scores collide with bankruptcy. It’s not as bad as the credit card companies would have you believe. That’s the second thing I tell them. Think about it. If everyone knew how quick and simple bankruptcy can be, more people would do it and millions (or billions) of dollars more in credit card debt would be wiped out! The credit card companies don’t want you to know that, so they continue to float boatloads of misinformation out there about bankruptcy. The longer they can keep you from bankruptcy, the more money they can continue to suck out of you even when you can’t afford it.

Here’s the simple truth about the affect of bankruptcy on your credit score:

• Chapter 7 stays on your credit report for 10 years although it impacts your score less as time goes on.
• Chapter 13 stays on your credit report for 7 years and its impact also lessens with time.
• If you currently have stellar credit and file a bankruptcy case, you can expect a large drop in your score.
• If you have had trouble paying bills and your credit score is already low, however, a bankruptcy will likely improve your score because it wipes out balances due. You go from owing lots of money to owing no money or very little money.
• You can buy a car on credit the day after your chapter 7 is over, and you can buy a car on credit in the middle of a chapter 13 case if you need one! How’s that for surprising?
• If you qualify in all other respects, lenders will loan you money to buy a house in as little as 2 years after filing a bankruptcy. Even more surprising?
• Bankruptcy law prohibits discrimination in employment due to bankruptcy.
• Although credit may be available to you after you file a bankruptcy case, it will most likely be at a higher rate of interest. That’s understandable, but it’s still less expensive than repaying all that credit card debt (that you couldn’t afford to repay anyway)!
• The best way to improve your credit score after a bankruptcy is to pay your bill on time for the rest of your life. You plan to do that anyway, right?
• As a practical matter, a chapter 7 bankruptcy can drop you score between 200 and 300 points.
• According to Bankrate.com, you can rebuild to an excellent credit score (above 750) “within a few years after your bankruptcy case has been discharged.” That doesn’t sound like a bloodbath, does it?

Now, here are some practical thoughts. If you were in my office and talking to me about the effect of bankruptcy on your credit score, I might have this conversation with you:

Client: I am so worried! Won’t bankruptcy kill my credit score?

Me: Well, sure, your score will go down but it will also recover again over time.

Client: But, but…how will I survive if I can’t get credit?

Me: What do you mean when you say, “How will I survive?” Do mean will you die if you don’t have credit?

Client: No, no, no…I mean how will I get by financially if I can’t get credit?

Me: That’s a good question. I’m glad your asking it. OK, so if you had no debts at all and you needed to buy something new, how would you buy it? Would you put it on a card or would you just pay cash for it.

Client: Well, I’d just pay cash for it.

Me: So if you had no bills and you were paying cash for everything, then you really wouldn’t need credit so much, would you?

Client: No, I guess not.

Me: And I’ve already told you that you can qualify for a car loan and a home loan not too after you file, right?

Client: Yes.

Me: OK, now think about this: Right now, you have $75,000 of credit card debt (pretty typical for the San Francisco Bay Area). Do you have the ability to pay that off?

Client: No.

Me: And you want a good credit score so that banks will loan you more money that you will also be unable to repay?

Client: Oh, I see what you mean.

Me: I guess this is the big question to consider: What good does it do to have a great credit score and access to lots of additional credit if you don’t have the ability to pay off the debt you now have?

Client: I never thought about it that way! I kept thinking I needed more credit so I could borrow more. I sound like a drug addict, don’t I?

Me: No, you don’t. But I find it’s always helpful to look at credit and bankruptcy in the right way.

I suppose the final thought I have about credit and bankruptcy is this: People file for bankruptcy because they no longer have the ability to repay their debts. In other words, they file when they have no other choice. What this means is that if you are still making decisions based upon how it will impact your credit score, you may not have reached that point where you have no other choice.

If, on the other hand, you run the numbers and find that you can’t pay rent and utilities and credit card bills–and still have money left to feed the family, your credit score really no longer matters. What matters is putting food on the table and a roof over your kids’ heads. If bankruptcy will help that happen, I can help. Call me at (510) 451-6200 to make an appointment. You can also email me at james@pixlaw.com.

And now, those links I promised. Click here, here, here, or here. Idiots! All of them!