Myths of Bankruptcy

Since the implementation of the Bankruptcy Reform Act of 2005, the bankruptcy process has undergone some changes. Unfortunately, these changes have been either misreported or misunderstood, leading many people who might benefit from such a move to reject bankruptcy outright.
All of the following statements are FALSE...

Bankruptcy Relief Is No Longer Available –
FALSE ! – Almost all of the relief available prior to the Reform, survives in today’s code. It is somewhat more involved but it still works.

You Can’t File Bankruptcy If You Have a Job –
FALSE ! – The “means test” was developed to divert some filers who make more than the median income for households of their size in their state of residence to Chapter 13. You MUST have a job to file a plan in Chapter 13.

Medical Bills Can’t Be Discharged in Bankruptcy –
FALSE ! – Almost all unsecured contract debt, like credit cards, personal loans, and medical bills remain dischargeable in bankruptcy. The law as-described-by-bill collectors might imply otherwise.

Chapter 13 Plans Require Repayment In Full of Debt – FALSE ! – Chapter 13 plans range from plans that pay general unsecured creditors nothing to plans that pay 100%, with every variation calculable in between. How much you must pay in 13 is driven by the interplay between your disposable income, the value of your non exempt assets, and the total of priority debts you have.

Bankruptcy Represents Personal or Moral Failure –
FALSE ! – Over 90% of bankruptcies are traceable to job loss, illness, or divorce, factors largely out of anyone’s control. Bankruptcy is a fresh start.

People Who File Bankruptcy Can’t Get Credit For 10 Years – FALSE ! – People in Chapter 13 borrow money during the case. People who file for Chapter 7 obtain credit after discharge. The rates are higher, but credit is available. This myth probably got its start in the fact that the Fair Credit Reporting Act allows the reporting of a bankruptcy for 10 years.

You Lose Everything You Own in Bankruptcy –
FALSE ! – Over 95% of bankruptcy cases filed by individuals are “no asset” cases in which the debtor keeps everything he owns. That’s because exemptions provide for assets that the debtor can keep and some assets, like pensions, are beyond the reach of the court. That exemption may allow you to keep your home and many assets.

Bankruptcy Costs Society Too Much –
FALSE ! – Credit card issuers are wildly profitable despite the small percentage of loans discharged in bankruptcy. Banks, however, have cost society an incredible amount.

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-- Written by Scott Reese

Radars Beware!

It’s a clear sunny day, one that reminds us of why we love living in Southern California. There’s a slight breeze blowing and you’re enjoying the rarely quiet and traffic-free street until you hear the dreaded sound of a police siren behind you. You look up and to your surprise (and mortification), you see the flashing red and blue lights of the California Highway Patrol. You quickly pull over and brace yourself.

The officer walks up to you and tells you that he caught you speeding and that his radar recorded your speed at 43 m.p.h. while you were in a residential zone. Were you really driving that fast on that quiet suburban street? Could it be that you missed a marked black and white CHP vehicle? Where’s that rewind button when you need one?

Don’t worry just yet. There is a way to fight those pesky radar tickets! With a little bit of research and some worthwhile time spent disputing the ticket, you may be able to get the citation dismissed, avoid paying the fines and penalties associated with the ticket, avoid traffic school, and avoid an increase in your insurance premiums. If that sounds attractive to you, read on.

If you got a speeding ticket and there was a radar involved, you most likely got cited for violating Vehicle Code Section 22350. A copy of the California Vehicle Code can be found on the Department of Motor Vehicles website: www.dmv.ca.gov. Vehicle Code Section 22350, also known as the “Basic Speed Law,” states “No person shall drive a vehicle upon a highway at a speed greater than is reasonable or prudent having due regard for weather, visibility, the traffic on, and the surface and width of, the highway, and in no event at a speed which endangers the safety of persons or property.”

To fight this ticket, you should dispute this ticket by filing a Request for Trial by Declaration (Form No. TR-205). This form is available to you either via a request to the Court when you post your bail (necessary to dispute your ticket) or via the following website: www.courtinfo.ca.gov/forms/. It’s a relatively simple form to complete; however, you need to provide a brief statement about the facts surrounding your citation (such as when you were cited, location where you were cited, driving conditions, etc.) and the law(s) supporting your claim that your citation should be dismissed.

There may be several different legal bases to dispute your citation. Keep a lookout for our next newsletter to see if it fits your situation.