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     What Everyone MUST Know Before Filing Bankruptcy
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BANKRUPTCY LAWYER ORANGE COUNTY
Bankruptcy Lawyer Orange County in Irvine, Ca - Chapter 7 Expert - Stop Foreclosures, Repossessions, Evictions, Collections - All Questions Answered - Walk Away - Start Fresh.

While you don’t want to pay off any debts that can be wiped out in bankruptcy because you’ll likely need that money to get a fresh start, you may want to do so if you need to continue your relationship with that creditor.

For example, if you want to keep good relations with your family dentist or to assure that a relative who loaned you money to go into business won’t be hurt, or to prevent a co-signor from getting stuck with your debt, you can reaffirm the Orange County debt by continuing to make payments after your Orange County bankruptcy petition is filed.

Some larger creditors such as banks, may require that you sign a Reaffirmation Agreement before accepting future payments. As your bankruptcy lawyer in Orange County Be sure, however, that such an agreement has NOT changed the repayment terms from the original contract.

Also, a Orange County Bankruptcy Attorney will warn you that you should be very careful about selling unsecured Orange County property to pay off a secured, nonexempt creditor where it will accomplish nothing for you. For example, if you sell exempt property (household furniture) to pay off a secured creditor who had this property as collateral, the property’s non-exempt status will allow the Trustee to still take and sell it to pay other secured creditors. All that you would have accomplished is to lessen the amount of money you will have available for your fresh start.

NONEXEMPT PROPERTY
Further, if the amount of nonexempt property you sell before filing would have been sufficient to pay most or all of your debts, the Bankruptcy Court will very likely dismiss your case.

Above all, a good bankruptcy attorney in Orange County will warn you to be honest in all dealings prior to filing for bankruptcy in Orange County. Remember, you are asking the court to order your creditors to abandon most, if not all, of their claims against you.

In exchange, however, you are expected to be honest in your dealings with your creditors and the Bankruptcy Court. If you are not, your case could be dismissed. Worse, if you intentionally lie to creditors, the Bankruptcy Trustee or the Orange County court, (commit fraud), you could be subjected to criminal as well as civil penalties.

Be very careful about selling a nonexempt property with the expectation of pocketing some cash. For example, if you sell a Grand Piano for $15,000, and need only $8,000 to pay off the debt on the piano, the Bankruptcy Trustee will expect you to account for the remaining $7,000 cash. If you can’t, the Bankruptcy Court may see this transaction as an attempt to defraud creditors; that is, to secret cash from them. The result, of course, may be dismissal of your case.

SELLING PERSONAL PROPERTY
If, however, you sold the piano for $15,000, paid off the creditor’s $8,000, and used the $7,000 to buy a car for work, or to make needed repairs on your Orange County home, then you will probably be okay. But don’t make the mistake of confusing "needed repairs" with redecorating or buying luxury items such as a spa. The Orange County Court will definitely frown on such expenditures and it affect your Orange County Bankruptcy.

Also, expert Orange County bankruptcy lawyers will tell you to sell and buy at reasonable fair market values. The Bankruptcy Trustee will want to know if you’ve given any person an unreasonable advantage in buying your property. If so, the implication is that you will recoup a benefit somewhere down the line, and the Court may void the sale. Pay particular attention if the buyer is a close friend or relative. This is a what is known as a "red flag" transaction, and it will immediately catch the court’s attention. Even a bankrutpcy lawyer in Orange County can't and won't help with fraud.

The 90-day period prior to filing bankruptcy is known as "the presumption period"; that is, any significant retail charges made during this period are presumed to be fraudulent, i.e., you knew or should have known that you could not afford to pay for them.

90 DAY RULE
Generally, the best rule to follow is to wait at least 90 days after such charges before filing bankruptcy. Also, be reasonable in what it is you purchase. Avoid consumer electronics, airline and cruise tickets, and similar luxury items.

While there is little chance that a credit card company will challenge small charges such as groceries and gasoline, they will certainly challenge non-essential charges such as charges for restaurants, hair salons, department stores, and similar "non-essential" purchases.

If you expect to receive any property which is nonexempt (remember, that’s typically an unnecessary or luxury item), but you haven’t taken possession of it yet, you may want postpone filing until you’ve taken ownership. In that way, when you get it, you can sell it and purchase exempt property to help you get a fresh start.

ORANGE COUNTY REAL ESTATE
Orange County Bankruptcy Attorneys will alert you to avoid playing "Games" with title to property because the U.S. Trustee's Office is able to find every piece of Orange County real estate and all real estate you own in the U.S. and some foreign countries in minutes through a system known as Lexis-Nexis Research. Our bankruptcy lawyers use the same system in our Orange County office and conduct the same search on every client as part of our "due diligence" requirement.

It's important that Clients disclose ALL property, real estate and personal, prior to filing bankruptcy in Orange County with your bankruptcy lawyer..

You should know, too, that merely changing title to property may not protect it from surrender. For example, if Husband owns a vacation cabin in Big Bear as his separate property acquired before marriage and changes title to "Wife, as Her Sole and Separate Property" before filing bankruptcy, the Trustee will quickly spot the transfer and the Court will very likely void the title change as an attempt to hide the asset from creditors and the court.

Also, if Husband owns a house as his separate property, and incurred virtually all of his debts entirely on his own before marriage, and if the homestead exemption amount is $75,000, but Husband has $150,000 equity in the home, Husband may be tempted to deed half of his property to Wife in order to increase the amount of equity protected by the homestead exemption. But because Husband didn’t create a new exemption by selling such portion at fair market value, but merely changed the form of ownership, the Court will view such change in title as an attempt to defraud creditors, and will almost certainly void the title change.

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