Re: Keeping house from potential Judgement

Hello.

Your questions are common ones I see all the time. I have been handling bankruptcy cases here in Sacramento for 28 years now and am a State Bar Certified Specialist in Bankruptcy Law.

As Mr. Cohen stated your are in all likelihood going to keep your home and car. With the new laws we will need to carefully review your income for the last 6 months to verify whether you can file a straight Chapter 7 Bankruptcy or whether you would be forced to do a 5 year Chapter 13 payment plan. It is important to find these things out as soon as possible.

Three concerns are not addressed by Mr. Cohen's response though he may intend to cover those in an appointment with him. They are as follows:

First what type of judgment will this be? If it is just for failure to pay money it is not a problem. However if it is for some type of intentional tort or has punitive damages or damages for driving under the influence of alcohol or drugs, it may be a debt that could survive a bankruptcy.

The second issue is that if they get a judgment of any type and recorded it you can have a lien on your home that will have to be removed by a separate motion. If you have nonexempt equity a lien could survive the bankruptcy in an amount equal to your nonexempt equity.

The third issue is that if you have not lived in California all of the last 2 years you may not be allowed to use California exemption protections at all.

For a good article on some of the issues resulting from the new law you can pick up a copy of this weeks Sacramento News & Review. It is entitled "Going Broke" and is the front page main article.

I give a free, no pressure consultation in my Sacramento office. Just contact my staff and they will be happy to set you an appointment with me to review your situation. I will explain in plain English how this law applies to your situation.

I look forward to helping you solve this situation if the case goes against you.

Good Luck.

Re: Keeping house from potential Judgement

Yes, you made sense. Is there any way of compromising with the person who is threatening to get a judgment, or is it too far gone? A chapter 7 bankruptcy (liquidation of your consumer debts) depends on the new means test. Your past-present income has to be below a certain threshold and, additionally, you have to have very little or no "discretionary" income each month to pass muster. If your home payments are up to date, then you should be able to keep the house and even the auto. Of course, a thorough review of your situation would be appropriate before an attorney can give you any definitive answer. Please feel free to call me tomorrow or later this week at the number posted if you'd like to discuss this further.