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If you are thinking about filing Southern California Chapter 13 Bankruptcy, then make sure you know how much you owe your creditors.   Most potential debtors typically focus on how much they must repay based on their disposable income, but many fail to really take a close look at what they owe.
For example, oftentimes, creditors might not hold legitimate claims in bankruptcy.  Claims are controlled under Section 502 of the bankruptcy code, Because allowance or disallowance of claims against the estate are core proceedings under 28 USC Section 157(b)(2)(A), which may be heard and determined by bankruptcy judges, it is in the Debtor’s best interest to ensure that the claim is actually owed.
Under 11 USC Sction 101(5)(A), a claim is a right to payment or a right to an equitable remedy for breach of performance if such breach gives rise to payment.   Thus, make sure your creditor actually holds a claim.  If there is no right to payment, then your creditor is not actually a creditor, but a third party with no direct interest in your case as it relates to recovery.
For example, under CCP 580(b), purchase money mortgages pursuant to 80/20 residential loans are typically non-recourse pursuant to anti-deficiency laws in California for residential properties meeting such criteria.   The lender is typically limited to in rem relief under California law.  Thus, if the bank holding the first and second purchase money mortgage forecloses with respect to the first mortgage, it generally is not entitled to further right to payment under the second mortgage.
I once had a client whose income required a 100% repayment in a chapter 13.   I was not the first bankruptcy this client visited for a free consultation, but I didn’t know that when I met with the client.   This client wanted to know if the repayment was really going to be 100% no matter what.   Well, I immediately could tell this was indeed going to be a 100% plan.   But the issue, for me, was whether or not the client had to repay a purchase money second mortgage on foreclosed property.   So when I estimated this person’s plan payments to be around $100,000.00 less than the client was told by other attorneys, this prospective client simply was besides himself.
The client first questioned if I had miscalculated the payment, and I assured him while it was a projection, that my estimates were reasonable.  Then I explained to the client that a claim is a right to payment and under California law, the bank had no right to pursue repayment on a purchase money second mortgage pursuant to CCP Section 580(b).
So we still had a 100% plan, but the end result was that this client had a chapter 13 plan  that was approved by the trustee without objection by any party, including the bank holding the extinguished purchase money second mortgage.  It was confirmed for almost $100,000.00 less than what my client had been told by other bankruptcy attorneys.   The client was happy knowing his attorney reviewed the status of the claims instead of simply assuming the claims were payable in bankruptcy.
The anti-deficiency law example is just one example of many when it comes to helping clients in chapter 13.   Debtor’s attorneys must not only be well versed with bankruptcy law but also nonbankruptcy law as well.   These tools, combined together, can comb through claims and potential claims wherein such practice will ensure the debtor’s chapter13 plan payment is as reasonable and accurate as possible.
 
 
 
 
 
 
 
 
 
 
 
The post Make Sure a Claim is a Claim in Your Southern California Chapter 13 Bankruptcy & Save Money. appeared first on JCH LAW FIRM.

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The meeting of creditors in your bankruptcy case goes faster when you know the questions you may be asked.
These questions are largely standard, and many are required by the U.S. Department of Justice.
The purpose of these questions is to ensure that you’ve properly listed all of your assets, debts, and financial circumstances.
Here are the bankruptcy creditors meeting questions that are listed in the Handbook for Chapter 7 Trustees.

Required Questions At The Bankruptcy Creditors Meeting

1. State your name, social security number, and current address for the record.
2. Have you read the Bankruptcy Information Sheet provided by the United States Trustee?
3. Did you sign the petition, schedules, statements, and related documents you filed with the court?
4. Did you read the petition, schedules, statements, and related documents before you signed them?
5. Are you personally familiar with the information contained in the petition, schedules, statements and related documents?
6. To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct?
7. Are there any errors or omissions to bring to my, or the court’s, attention at this time?
8. Are all of your assets identified on the schedules?
9. Have you listed all of your creditors on the schedules?
10. Have you filed bankruptcy before? (If so, the trustee must obtain the case number and the discharge information to determine the debtor(s) discharge eligibility.)

Additional Questions The Bankruptcy Trustee May Ask

1. Do you own or have any interest whatsoever in any real estate?
   1. If owned: When did you purchase the property? How much did the property cost? What are the mortgages encumbering it? What do you estimate the present value of the property to be? Is that the whole value or your share? How did you arrive at that value?
   2. If renting: Have you ever owned the property in which you live and/or is its owner in any way related to you?
2. Have you made any transfers of any property or given any property away within the last one year period (or such longer period as applicable under state law)?
   1. If yes: What did you transfer? To whom was it transferred? What did you receive in exchange? What did you do with the funds?
3. Does anyone hold property belonging to you?
   1. If yes: Who holds the property and what is it? What is its value?
4. Do you have a claim against anyone or any business?
5. If there are large medical debts, are the medical bills from injury?
   1. Are you the plaintiff in any lawsuit?
   2. What is the status of each case and who is representing you?
6. Are you entitled to life insurance proceeds or an inheritance as a result of someone’s death?
   1. If yes: Please explain the details.
7. If you become a beneficiary of anyone’s estate within six months of the date your bankruptcy petition was filed, the trustee must be advised within ten days through your counsel of the nature and extent of the property you will receive. FRBP 1007(h)
8. Does anyone owe you money?
   1. If yes: Is the money collectible? Why haven’t you collected it? Who owes the money and where are they?
9. Have you made any large payments, over $600, to anyone in the past year?
10. Were federal income tax returns filed on a timely basis? When was the last return filed?
    1. Do you have copies of the federal income tax returns?
    2. At the time of the filing of your petition, were you entitled to a tax refund from the federal or state government?
       1. If yes: Inquire as to amounts.
11. Do you have a bank account, either checking or savings?
    1. If yes: In what banks and what were the balances as of the date you filed your petition?
12. When you filed your petition, did you have:
    1. any cash on hand?
    2. any U.S. Savings Bonds?
    3. any other stocks or bonds?
    4. any Certificates of Deposit?
    5. a safe deposit box in your name or in anyone else’s name?
13. Do you own an automobile?
    1. If yes: What is the year, make, and value? Do you owe any money on it? Is it insured?
14. Are you the owner of any cash value life insurance policies?
    1. If yes: State the name of the company, face amount of the policy, cash surrender value, if any, and the beneficiaries.
15. Do you have any winning lottery tickets?
16. Do you anticipate that you might realize any property, cash or otherwise, as a result of a divorce or separation proceeding?
17. Regarding any consumer debts secured by your property, have you filed the required Statement of Intention with respect to the exemption, retention, or surrender of that secured property? Please provide a copy of the statement to the trustee. Have you performed that intention?
18. Have you been engaged in any business during the last six years?
    1. If yes: Where and when? What happened to the assets of the business?

Meeting Of Creditors Questions If You Own A Business Or Are Self-Employed

1. Who was responsible for maintaining financial records?
2. Which of the following records were maintained?
   1. Cash receipts journal
   2. Cash disbursements journal
   3. General journal
   4. Accounts receivable ledger
   5. Accounts payable ledger
   6. Payroll ledger
   7. Fixed asset ledger
   8. Inventory ledger
   9. General ledger
   10. Balance sheet, income statement, and cash flow statements
3. Where are each of the foregoing records now located?
4. Who was responsible for preparing financial statements?
5. How often were financial statements prepared?
6. For what periods are financial statements available?
7. Where are such financial statements now located?
8. Was the business on a calendar year or a fiscal year?
9. Were federal income tax returns filed on a timely basis?
   1. When was the last return filed?
10. Do you have copies of the federal income tax returns? Who does have the copies?
11. What outside accountants were employed within the last three years?
12. Do you have copies of the reports of such accountants? Who does have copies?
13. What bank accounts were maintained within the last three years?
14. Where are the bank statements and cancelled checks now located?
15. What insurance policies were in effect within the last year? What kind, and why?
16. From whom can copies of such insurance policies be obtained?
17. If the business is incorporated, where are the corporate minutes?
18. Is the debtor owed any outstanding accounts receivable? From whom? Are they collectible?
19. Is there any inventory, property, or equipment remaining?

This List Is Not Exhaustive
During the meeting of creditors, the trustee can ask you any question he or she sees fit with respect to your assets, debts, and financial history.
Nothing is off-limits during the bankruptcy creditors meeting, particularly if there’s something unique or interesting about your situation. Any bedroom secrets that the trustee learns about may yield additional questions.
That’s why during a consultation, I’m going to ask the same questions in a bunch of different ways. I need to make sure there’s nothing going on that might make a trustee ask unexpected questions.
My clients, after all, expect to be prepared well for their bankruptcy creditors meeting. By knowing the full story, I can anticipate all potential questions and prepare you more fully for your meeting of creditors.
In the end, it all comes down to proper communication.
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Bankruptcy Creditors Meeting Questions was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.

Deciding to file for bankruptcy is a significant step toward improving your finances.  Whether you have decided to file Chapter 7 or Chapter 13 bankruptcy, one of the most important steps you should take includes getting to know the process and what to expect.  In this sense, it helps to make the filing process easier [...]