Will everyone know when you file bankruptcy? (Ontario attorney David Lozano wishes to put your mind at ease!)
A big concern I hear from my clients when they come in for a free consultation is who will know that they have filed bankruptcy. Truthfully, there are only a limited number of people who may be notified when you file bankruptcy.
Creditors will be made aware of the fact that you have filed bankruptcy. This is a standard procedure that gives creditors the opportunity to dispute the claim. Employers may also be notified depending on the circumstances of your bankruptcy case. Members of your household, for instance a spouse, will be notified even if their finances are separate from yours. Public records are kept by the Federal Court that require specific information about the bankruptcy case in order to gain access to the records.
Less people than you think will be notified when you file bankruptcy. This means that unless you share the information with your friends or other family members, they will be none the wiser! Drop by our Ontario location for a free consultation!
Are your children’s education saving funds exempt when you file bankruptcy? (Lancaster attorney David Lozano is here to put your mind at ease!)
Couples and single parents frequently take advantage of my offer for a free consultation to discuss their options for dealing with debt. For many their concerns involve not only them, but their children as well! Parents worry whether the savings they’ve set aside for their children’s future education will be affected when they file bankruptcy.
I am pleased to say that you can protect your children’s education funds by using special savings plans, such as a 529 or Coverdell Education Savings Account (ESA). Wikipedia compares and contrasts the two plans well:
Important differences with 529 plans
- Coverdell ESAs have lower maximum contribution limits; currently $2,000 can be contributed per year per child, while 529 plans generally have no restrictions on contributions, up to the maximum lifetime contribution.
- Coverdell ESAs can allow almost any investment inside including stocks, bonds, and mutual funds, while 529 plans only allow a choice among a number of state run allocation programs. The rules for investments allowed in ESAs are the same as those for IRAs.
- Balances in a Coverdell ESA must be disbursed on qualified education expenses by the time the beneficiary is 30 years old or given to another family member below the age of 30 in order to avoid taxes and penalties; there is no age limit for 529 plans.
- Coverdell ESAs allow withdrawing the money tax free for qualified elementary and secondary school expenses; 529 plans do not.
- The income level of a donor may affect contributions into a Coverdell ESA, but would not affect contributions to a Section 529 plan.
Important similarities to 529 plans
- Money in both a Coverdell ESA and a 529 plan is not considered the child’s (beneficiary’s) money when applying for federal financial aid as long as the owner of the account is someone other than the beneficiary, such as a parent. This works to increase the child’s potential financial aid because parents are expected to contribute only around 6% of their assets to finance college education, as opposed to the child’s 35%.
- The custodian of both an ESA and a 529 plan can designate a new beneficiary without incurring taxes or penalties provided that the new beneficiary is an eligible family member of the previous beneficiary.
When filing bankruptcy, money that has been in a 529 or ESA savings account for over two years is exempt from the bankruptcy process! And up to $5,000 worth of money in the account that has accumulated for at least a year but under two years is also exempt. In addition, only money that has been added to the savings account within a year prior to bankruptcy is available to creditors–everything else is protected!
The future depends on the well-being of the next generation, and a large part of that well-being involves the extent of their intellectual growth! Visit our Lancaster location for a free consultation. Protecting the education funds of our children helps to ensure their continued intellectual growth!
Do you have something in common with Will Smith? (Bankruptcy attorney David Lozano says, “more than you might think!”)
Do you have a flair for the dramatic, a thirst for action and adventure, a good sense of rhythm with a dash of witty humor and charm to tie everything together? See, we’ve already established some strong similarities between you and the Fresh Prince! One likeness that might come as a surprise to you, however, is Will Smith’s close encounter with bankruptcy.
Will Smith was once an up-and-coming rapper with dreams of one day becoming a movie star! He earned the nickname “Fresh Prince” for being able to smooth talk his way out of trouble. In 1988, as part of a hip-hop trio, Will Smith won a Grammy for the song “Parents Just Don’t Understand” and became a millionaire. Smith then went on a spending spree and underpaid his taxes, which nearly forced him into bankruptcy. To be fair, Smith was only 18 and a million dollars is enough to go to anyone’s head!
Regrettably, the Fresh Prince couldn’t smooth talk his way out of the debt he accumulated after squandering his fortune. He owed 2.8 million dollars in tax debt to the IRS, a number of his possessions were repossessed, and his income was heavily garnished. Will Smith narrowly escaped bankruptcy thanks to NBC signing him on the sitcom, The Fresh Prince of Bel-Air. It was a close call, but fortunately the sitcom was a hit and put Smith on the road to stardom.
Now, you certainly aren’t in debt as the result of reckless spending, I’m sure! The average Californian’s debt problems are due to unforeseen circumstances, such as the loss of a job or unexpected medical bills. Whatever the case may be, David Lozano is here to help! Contact me for a free consultation. Bankruptcy is not an end-all, it is merely a stepping stone to getting your life back on track!
A common question I get from my clients is if filing bankruptcy will have any effect on their student loans. Unfortunately, filing bankruptcy does not eliminate or reduce your student loans. The U.S. Bankruptcy Code states that only “undue hardship” is grounds for discharging student loans. Now before you start planning your appeal saying that you are facing “undue hardship”, I should tell you that the Code’s definition will settle for nothing less than permanent and total disability.
While filing bankruptcy does not discharge your student loans or prevent interest from accruing on the loans, there is a ray of hope. Filing bankruptcy will give you a little extra time–up to five years–to get your finances straightened out and possibly catch up to the point where you are able to pay off your student loans! You can do a lot of things in five years if you set your mind to it!
Pursuing the career you took those student loans for may be the key to paying off your loans as well! Don’t let student loans interfere with your goals in life! Contact me for a free consultation. It’s never too soon or too late to seek professional advice on settling your debt!
To cope with the current state of our economy people will often take on extra shifts at work or cut back on frivolous spending. But what about individuals who are retired and their frivolous spending consists solely of buying the grandkids holiday and birthday gifts? That’s right, I’m talking about generous Grandmas and Grandpas here!
The elderly are struggling with debt just as much as the rest of society. A common assumption has been that social security and a good 401(k) plan will be enough to support the elderly after retirement. What I’ve seen happening more and more frequently, however, is elderly folks dipping into their savings for the sake of their children and grandchildren.
Supporting ones children is a hard habit to break. So when Mom and Dad see their son or daughter low on cash, struggling with unemployment, beset with unexpected hospital bills, or in need, the automatic response is to help out.
Lending cash when one is on a fixed income is difficult though. Many elderly men and women turn to borrowing against the equity on their house or relying on credit cards to get by. Unfortunately, both of these methods lead to trouble! Taking out a second mortgage can easily result in foreclosure and missing a few payments on the credit card quickly develops into hefty credit card debt. The elderly may even go without prescribed medication or scrimp on food in an effort to keep up with their bills.
No one likes the thought of dear old Grandma and Grandpa risking their health and comfortable living during retirement! That’s why it is important that elderly individuals get professional financial advice before it comes to that!
Bankruptcy was designed to give people relief from their debt! Mom and Dad have been taking care of you all your life! It’s probably about time to return the favor. Contact me for a free consultation. Together we will make sure that your elderly loved ones can enjoy their retirement to the fullest!
What if creditors continue to call after your debt has been discharged? (Bankruptcy attorney David Lozano urges you to stand your ground!)
Once your debt has been discharged by the bankruptcy court, creditors and collection agencies are out of luck! Third party collection agencies have been known to contact a person and demand payment even after that person has declared bankruptcy and had his or her debt discharged. Do not fall prey to their subterfuge! By taking responsibility and filing bankruptcy you have cleared your name! That means that anyone calling about debt that has been discharged is out of line!
If creditors or third party collection agencies call after the bankruptcy court has approved your bankruptcy claim, take appropriate action! Tell them that the debt has been discharged. If they do not accept that fact or continue to hassle you, don’t give in! They are in the wrong, so stand your ground! Inform them that you will contact the Federal Trade Commission if they continue to call. Attempting to collect on debt that has been discharged is illegal and they can be held in contempt for doing so!
The whole point of filing bankruptcy is to get a fresh start without having to worry about creditors! As a bankruptcy attorney, I can help you make sure that no one takes advantage of you! I look out for my clients before, during, and after the bankruptcy process so that you can enjoy your debt free life with peace of mind!
While it is in my best interest that you hire an attorney, that is not the only reason why I advise my clients that having one is essential. Filing bankruptcy is not as simple as filling out some paperwork, paying a fee, and sending it all to the court for approval. There’s a lot more to it, which is why bankruptcy attorney, such as myself, exist. We evaluate your situation from a legal perspective, thoroughly discuss all available options with you–the client–and handle all legal matters.
There are many ins and outs when it comes to filing bankruptcy, but bankruptcy attorneys are able to follow the complex system and understand the technical terms involved with ease. Attorneys have studied all the laws and technicalities that go into bankruptcy at length, and having this knowledge makes the process of handling your unique bankruptcy case a simple matter of organize all the details and deciding the right course of action for you.
So, while the law does not require you to have an attorney, I highly recommend it. Another benefit of hiring an attorney who specializes in the field is the speed and efficiency we have to offer. Hiring a bankruptcy attorney saves you the time and frustration of trying to decipher what needs to be done, the order it needs to be done in, and how to solve dilemmas should they arise. Contact me for your free consultation, so that you can concentrate your efforts on getting your life back in order while I take care of the rest!
Can you still be successful after filing bankruptcy? (Bankruptcy attorney David Lozano answers, “absolutely!”)
Coming to terms with bankruptcy is a difficult process. If you’ve ever asked yourself, “how did this happen to me?” You are not alone! People have been asking themselves the same thing for decades. In fact, you may be surprised by just who has shared your exact sentiments!
After sampling several career choices that ended in failure, a man named Milton Hershey became an apprentice at a confectionery shop. At the end of his apprenticeship, Milton attempted to start his own business, yet that, too, failed, leading him to file bankruptcy. Fortunately, Milton found his calling as a candy maker and went on to form a business you may be familiar with–Hershey Chocolate Company.
Another case of celebrity bankruptcy was filed by none other than the founder of the Magical World of Disney, Mr. Walt Disney himself! Walt had his fair share of side jobs before he became the renowned man we know him as today. Walt’s interest in drawing led him to become a freelance commercial artist. He struggled for some time to make ends meet, dabbling in the area of animated cartoons.
Also during this difficult financial time in his life, Walt drew the first rendition of a character that would eventually change his life. He fondly bestowed the name of Mickey Mouse on the comical character he’d created. Despite all his efforts, however, Walt simply wasn’t able to get his drawing career off the ground and was forced to declare bankruptcy. Of course, Walt’s endeavors have a happy fairy tale ending that everyone can now enjoy!
It just goes to show you that no matter who you are, bankruptcy is a legitimate possible and is most definitely not an end-all! Contact me for your free consultation. Who knows, fame and fortune may be just around the corner! What wonders will you create with your fresh, debt free start?
Photo credit bottom from friend
Want to avoid burdening your loan co-signer when you file bankruptcy? (Southern California bankruptcy attorney David Lozano is here to help!)
If you meet a friend for dinner and agree to go dutch, it would be rude to then stick your dinner company with the bill. It’s the same situation if you file bankruptcy without consulting the co-signer of a loan that has not been paid in full. While your debt may be eliminated with Chapter 7, the co-signer will still be held responsible for the full amount of the loan!
Creditors don’t acknowledge that one of the co-signers has been absolved of his or her share of the loan. Their only concern is collecting their dues, whether or not the co-signer has to pay double his or her share! Whoever the co-signer may be– a family member, friend, partner, or ex– they don’t deserve to be stuck with your portion of the loan as well as their own!
Does this mean you can’t file bankruptcy if you’ve co-signed on a loan? Not at all! By filing for Chapter 13 bankruptcy you can qualify to receive an extension on your payments, so that you can pay off your portion of the loan. Contact me for a free consultation on settling your debt without burdening your co-signer with the bill! It is the responsible thing to do!
As a Californian bankruptcy attorney, I’ve heard almost every kind of concern people dealing with debt have. One of the common concerns is that creditors will continue to contact you even after you’ve filed bankruptcy. This is a myth!
Once you file bankruptcy an “automatic stay” is put in place, which means creditors aren’t allowed to contact you. This puts an end to the constant calls and letters! It also prevents foreclosure and lawsuit attempts.
Bankruptcy laws were designed to give you a chance to get your life back in order. With the Law Offices of David Lozano, your fresh start can be made without creditors banging on your door demanding money! Contact me for a free consultation, so that you can get started on turning your financial situation around!