By using a Chapter 13 bankruptcy, Steven was able to strip a large part of a million-dollar mortgage package from a farm in Santa Paula. When the bank refused to work with Steven to reduce the payments, he warned the bank that he would be "lien stripping." He then proceeded to lien strip over one-third of the mortgages, and since then has built a successful track record in Chapter 13 with lien stripping.
Schedule an appointment with Steven Trolard in Thousand Oaks, California, or Oxnard, California, so that you know your rights when
prepared by Attorney, Steven Trolard, of Steven Trolard & Associates, plc.
Our main office is located in Thousand Oaks, California and we have a branch office in Oxnard, California. We have been helping people solve their money problems for over 20 years.
Our History with Bankruptcies
We saw the financial crisis coming in 2008 because many lenders had given out mortgages (called liar loans) when the person really could not afford to buy real estate. Usually our clients had adjustable mortgages and in 2008 the mortgages adjusted upward, and our clients could no longer make the higher payments. The lenders had also let people buy several houses based on loan applications where the real estate loan broker had falsified income information in order to get a loan approved and earn a real estate commission. The client, and his family, lived in one home, and also had several other houses as rentals.
When the mortgages adjusted the monthly payment increased. When the clients told their tenants to pay more in rent, the tenants simply stopped making the rent payments and the owners did not have the cash income to keep making the mortgage payments each month. By the time the owners went to court and got the tenants removed, the owners were so far in debt that they could not financially keep paying on everything, and they went into default on all of the assets that they owned.
Between 2008 and 2015 we were able to help a lot of people solve their financial crisis. We used Chapter 13 to help people stay in their homes and keep their equity and pay the arrearages over time. We also filed a lot of Chapter 7 cases to stop lawsuits by credit card companies and stop wage garnishments.
Now our economy and our people are in trouble again because of the covid-19, with people losing their businesses and their jobs, and losing their income caused by the Coronavirus. Credit card debt is high, and people are strapped for cash.
Business owners have been forced to shut down and lay off their employees. It is almost impossible to just shut down your business and then start back up later. Restaurants have had their supplies spoil, or they gave away their food to keep it from going into the garbage.
The purpose of this Guide is to give you some information about the basics of a bankruptcy. We see people now who have a lot of credit card debt and one or more credit card companies have filed a lawsuit in court; or the credit card company has already been to court and has a judgment against you (the debtor) and is garnishing wages, or taking money out of their bank account.
The most important factor is whether you own a home, and the amount of your mortgage and if you have any equity in the home. Equity is the money you have left after your home is sold, and your mortgage is paid off, and your real estate agent is paid. The remaining money is called your equity.
We also have to look carefully at your income and the income of your spouse if you have one, and the amount of your monthly bills that you pay regularly.
Types of Bankruptcy Cases
There are four (4) kinds of bankruptcies, called Chapters, and the chapter that you use depends of your personal financial situation.
Overview of Chapter 7:
Most bankruptcy cases are filed under Chapter 7. The purpose of a Chapter 7 bankruptcy is to eliminate your unsecured debts and get a “fresh start.” We can stop creditor harassment and continuous pressure. If you own a home and have some equity, the equity may be protected and exempted so that you can keep your home, continue with your payments, and get your other unsecured debts eliminated. The same with your vehicle; you can keep your vehicle and continue making the payments and eliminate the other debts. There are certain types of debts that can be and cannot be discharged, and we explain this so there are no unpleasant surprises.
Most corporations and partnerships file under Chapter 11.
Overview of Chapter 12:
We have filed Chapter 12 bankruptcies for farmers who are having financial problems, want to stay in business and continue farming. A client had several mortgages against his farmland and the bank was foreclosing on one of the mortgages. We used a Chapter 12 to stop the foreclosure and created a plan for repayment as the income from the farming comes in.
Overview of Chapter 11:
Under Chapter 11bankruptcy a Plan must be developed and approved by the Trustee and the Judge and allows a debtor to continue running a business while “reorganizing” its finances. This allows a business to continue operating and keep their employees. This is the most common type of bankruptcy where the business does not generate enough profits to pay its current debts, but it may be able to pay the debts over a period of time.
A person, even if they don’t have a business, a partnership or a corporation can file a Chapter 11 bankruptcy case. Like a Chapter 13 bankruptcy case, a Plan is required to be confirmed by the Judge. These are more complicated that a Chapter 7 or 13 case.
Overview of Chapter 13:
A Chapter 13 allows individuals and small business owners the same ability to resolve their financial problems that large businesses have under a Chapter 11 bankruptcy cases. We are able to restructure the debts and present terms allowing you to pay off debts over time. If you are behind on mortgage payments and want to keep your home, you can pay the amount you are behind over a period of time, and the same applies to vehicles too.
We use a Chapter 13 so you can keep your home and cars even if your home has equity. To use this chapter you, or a spouse, must have a regular income.
We must prepare a “Plan” that is approved by the court appointed Trustee and approved by the Judge. The Plan shows exactly how your income will be used and how your debts will be handled over the length of the Plan.
People have spent their money and lives building their business and buying their homes and vehicles and establishing themselves financially. Now all of it is at risk and everyone on the planet is experiencing the risk of losing it all. People without jobs, people being laid off, businesses closed, illness, which is upsetting the feeling of balance that people had, and we don’t know what is going to happen next. Bankruptcy can help put a handle on it.
facing bankruptcy or foreclosure, wage garnishment or a lawsuit.