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Bounce Back with a Bankruptcy


You know how that old horror story goes -- it's 2020.  Job prospects are at zero but credit card balances are far from that.  Electric bills are through the roof because of a never-ending heat wave.  Landlords are patiently waiting for eviction moratoriums to expire because people just aren't paying rent.

For some, unemployment provides brief but necessary respite from creditors.  But what happens when jobs come back, and unemployment benefits disappear without taking all of those bills with them?

It is time to bury bankruptcy taboo, for good.  Long, long gone are the days of "debtor's prisons" and "poorhouses" -- mechanisms for shaming people who could not pay their bills. United States bankruptcy laws were enacted to eliminate those methods and protect those who are earning, and spending, but had a run of bad luck -- a medical issue; a divorce; a business venture that did not work out; a pandemic.  

We, as Californians, have had little control over what happened to us, and our state, this year.  The COVID-19 pandemic laughed at our collective efforts to work hard and earn income, and the recent fires (among other culprits) have destroyed homes and businesses across our beautiful state.  

None of this was your fault.  You worked hard, you filled out the paperwork, you hunkered down and tried to figure out what to do next.  What you can do now, though, is think about seeking federal bankruptcy protections, which the United States Constitution instructs Congress to enact for this very reason.


It is time to realize that a bankruptcy discharge -- not stringing yourself along on unemployment benefits -- is the way out of this nightmare.

For when it comes to bankruptcy, "F" does not mean failure.  In bankruptcy, "F" means Fresh Start. 


In a typical Chapter 7 bankruptcy, unsecured debts -- such as credit card debt -- are discharged. In other words, personal obligations to repay those unsecured debts are removed. If relocation (due to non-payment of rent or mortgage) is required, bankruptcy protections may include a homestead exemption that may be applied to a new home for you and your family. In this way, a fresh start in bankruptcy feels like fresh sheets -- a clean break from last week, last month, or even last year

My office provides free half hour, virtual consultations, during which we consider a potential client's assets and liabilities to see if bankruptcy is a viable option. If it is, a bankruptcy attorney will work to assist in every step of the bankruptcy process -- which typically lasts for just a few months. That means, by early 2021, you could wake up from this nightmare with something unemployment benefits are hard-pressed to provide -- a "reset" button on your finances.  

Start the next decade with no debt. We can only go up from here.  

Leah Michele Kaufman, Esq. is a Bankruptcy and business litigation attorney at Kaufman & Kaufman in Santa Ana, California. She practices with her father and mentor, Leslie Keith Kaufman, Esq.

Disclaimer. The content of this article is not legal advice, nor legal opinion, and should not be relied upon for individual situations. Legal counsel should be consulted for legal planning and advice. No lawyer-client relationship with Kaufman & Kaufman will be formed, and no information you want to keep confidential should be disclosed - through e-mail links or otherwise - to Kaufman & Kaufman, until the firm has conducted a "conflicts check" and you and the firm have signed a retainer agreement or an engagement letter.

Kaufman & Kaufman is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code, in the Central District of California. Kaufman & Kaufman does not practice or offer legal services in jurisdictions where firm lawyers are not licensed.

Questions about this article should be directed to Kaufman & Kaufman in writing. 

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NEW HIGHER HOMESTEAD EXEMPTION IN CALIFORNIA

 


A common mis-conception that we hear from potential clients consulting our firm for the first time is that their home would be sold if they file bankruptcy.  This is not the case if the available equity in a debtor's home is exempt from liquidation.


Congress allows each state to determine what the residents of the state may keep when filing bankruptcy (exemptions from liquidation) if a state "opts out" of the federal exemption system.  California created not one, but two, sets of exemptions, which have long been reputed to be the most generous in the country.  


However, the benefits to debtors of California's once-generous homestead exemption have steadily eroded, as property values in this state climbed.  Even rare periodic adjustments failed to keep up with California's soaring property values.


Until now.


On September 15, 2020, Governor Gavin Newsom signed into law Assembly Bill 1885 which dramatically increases the homestead exemption for personal residences in California.  The new law is effective for cases filed on or after January 1, 2020.


The new homestead exemption is increased significantly to $300,000. -- but may increase up to $600,000. based on the median sale price of single-family homes within the county where the debtor resides.


For those residents of Orange County, and Los Angeles County, this means that the exemption will increase by up to eight times in some cases.


The increased homestead exemption will also be annually indexed to keep pace with future inflation.  


This is all very good news for beleaguered California homeowners who are facing increased financial pressure due to the pandemic and social unrest all but shutting down the California economy.


At the Law Offices of Kaufman & Kaufman, we are proud that an attorney -- not a paralegal -- will review our clients' financial situations, to determine and advise the best course of action, including both bankruptcy and non-bankruptcy alternatives.



Disclaimer


The information contained in this weblog (blog) is provided for informational purposes only, and should not be construed as legal advice on any subject matter.  No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state.  the content of this weblog (blog) contains general information and may not reflect current legal developments, verdicts, or settlements.  The Law Offices of Kaufman & Kaufman disclaims all liability in respect to actions taken or not taken based on any or all of the contents of this weblog (blog). 


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