Sonoma County Lawyer Blog

Whether a residential tenant should be able to stop an unlawful detainer proceeding by filing a bankruptcy petition is an open question. The tactic has been used successfully in thousands of cases [see, e.g., In re Smith (Bankr CD Cal 1989) 105 BR 50, 51 n2 (estimating more than 30,000 such cases annually in Central District of California)]; and it succeeds because of the Bankruptcy Code's all-encompassing automatic-stay provision.
Although the automatic-stay provision does, by its terms, apply to a residential unlawful detainer proceeding, bankruptcy judges have expressed doubt as to whether the result is consistent with the stay's purpose in the Bankruptcy Code [see In re Smith (Bankr CD Cal 1989) 105 BR 50, 55.

Continue reading "Using Bankruptcy to Prevent A Sonoma County Eviction Could Be Dangerous" »

Chapter 7 is the most frequently chosen bankruptcy option by individual debtors. For most debtors it offers a quick and moderately economical fresh financial start. A chapter 7 case is commenced by a petition. The petition must be accompanied by the filing fee of $299 or an application to pay the fee in installments or, waive it all together.

In addition to the chapter 7 bankruptcy petition, the debtor must file a list of creditors, codebtors and parties to executory contracts and unexpired leases, a statement of the debtor's social security number, schedules, a statement of financial affairs, a statement of current monthly income with pertinent means test calculations, a certificate regarding notice, records of payment from employment, a statement of monthly income, a statement of anticipated increase in income or expenditures, a statement of intention, and a credit counseling certificate.

An individual debtor on a chapter 7 bankruptcy petition is allowed to claim certain property as exempt. California law makes available two alternative sets of exemptions in bankruptcy cases. These two alternatives are mutually exclusive and may not be combined on a petition.

Continue reading "What Happens In A Sonoma County Chapter 7 Bankruptcy Filing? " »

Yes! I wrote a recent post regarding the potential legal affects of cohabitation. However, let's ask a different question. Can a good faith belief in a valid marriage be enough to give rise to marital protections? Yes. A putative spouse is a person who believes in good faith that he or she is a party to a valid marriage, although the marriage is invalid, In re Marriage of Vryonis, 202 Cal. App. 3d 712 Cal. App. 2d Dist. 1988.

Determination of a person's status as a putative spouse may affect various legal rights, including the following:

1) The right to share in property accumulated in the name of the other party during the putative marriage on termination of the relationship;

2) The right to share in property accumulated during the putative marriage on the death of the other party;

3) The right to payment of support by the other party on termination of the relationship;

4) Standing to sue for the wrongful death of the other party to the relationship; and

5) The right to recover state workers' compensation benefits when the other party dies.

Cohabitation is different. A putative marriage does not exist if unmarried persons live together knowing that they are not validly married. When both parties lack a good-faith belief in the validity of their marriage, the relationship does not qualify as a putative marriage even though they may hold themselves out as husband and wife and conduct themselves as a family unit. The rights and liabilities of persons living together without a good-faith belief that they are married were discussed in a previous blog post.

An experienced Santa Rosa, Ukiah, or Lakeport family law attorney will be able to offer you guidance on what protections, if any, you may have based on the facts of your specific relationship with a third party.

No family law issue is more frequently litigated in bankruptcy cases than the dischargeability of marital obligations. Although there is frequently no way to guarantee that a divorce decree debt will be exempt from discharge in a bankruptcy case, there are steps that can be taken in drafting a marital settlement agreement or judgment for dissolution which will help significantly in achieving that goal.

The Bankruptcy Code contains several types of debts that are excepted from discharge in cases filed by individuals (see 11 USCS § 523). One classification of debts that are nondischargeable as set forth in section 523(a)(5), includes all domestic support obligations. The definition of "domestic support obligation" specifically includes obligations owed to or recoverable by not only a spouse, former spouse or child of debtor, or child's parent, legal guardian or responsible relative, but also recoverable by a governmental unit. The heart of the definition remains debts that are in the nature of alimony, maintenance or support.

11 U.S.C. § 101(14A), requires that to be a nondischargeable domestic support obligation the obligation must be established or subject to establishment "on, or after the date of the order for relief in a case under this title, by reason of applicable provisions of--(i) a separation agreement, divorce decree, or property settlement agreement; (ii) an order of a court of record; or (iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit..."

However, if contractual arrangements between two spouses providing for support outside the context of a separation agreement, property settlement agreement or divorce decree exist, the obligations arising thereunder are dischargeable because they would not fall within the exception. Thus, for example, obligations under a prenuptial agreement are ordinarily dischargeable. This exception to discharge also does not apply to obligations arising from divorce proceedings in which there is never a separation agreement, property settlement agreement, divorce decree or other court order or governmental determination.

While not all marital obligations are nondischargeable, obligations that are primarily concerning alimony, maintenance or support are nondischargeable under bankruptcy law. A qualified Sonoma County, Mendocino County, or Lake County family law and bankruptcy law attorney will be able to guide you through this convoluted and complicated area of cross over law between family law and bankruptcy law.

The Law Offices of James V. Sansone spends a great deal of time helping clients to resolve family law and bankruptcy issues. James Sansone is a family law and bankruptcy legal professional who will take the time to explain all of your options, working to find the best debt relief solution to fit your needs. JVS Law is committed to helping you get the fresh start you need in order to move on with your life and get back on the right financial path after a marital dissolution.

Quick simple answer is YES. However, many people I talk to think they can keep their car and not pay their car loan. This is untrue. You can keep the car, but you have to pay.

If you plan on keeping your car there are two ways to go about it. You can either reaffirmation the debt and keep paying on the loan or you can keep paying on the loan, but NOT reaffirm.

The automobile loan company will require you to sign a reaffirmation agreement if you inform them you plan on keeping the car. A reaffirmation agreement is one made by the debtor and a creditor whose prepetition debt is otherwise dischargeable. Pursuant to the agreement, the debtor agrees to pay the debt in whole or in part notwithstanding the discharge. Reaffirmations are usually an issue only with a chapter 7 debtor since debts that would be reaffirmed would normally be dealt with by plans confirmed in other chapters. Along with other required schedules, the debtor files a statement of intention with respect to secured property within 30 days of filing the petition or by the section 341 meeting, whichever is earlier [11 U.S.C. § 521(a)(2); Fed. R. Bankr. P. 1007(b)].

A reaffirmation agreement must be voluntary, and it is doubtful that a court would compel a debtor to reaffirm, even if the debtor's statement indicated an intention to do so.

The effect of a reaffirmation agreement is like any other obligation incurred after the bankruptcy petition. A subsequent default can result in any collection procedures available to a postpetition creditor. Therefore, if a debtor reaffirms a car loan and the car is later a total loss in an accident, the debtor will continue to be liable on the reaffirmed debt.

Another option is for the debtor simply to continue paying on the loan but not sign a reaffirmation agreement. The benefit of this approach is that if you ever stop paying on the car loan, the lending institution can, of course, take the car, but they can't come after you personally since the debt was discharged in bankruptcy. However, debtors must remain cautious if filing for bankruptcy in the 9th circuit.

There is case law, in the 9th circuit, which enables an automobile finance company to repossess the vehicle, even if your payments are up to date, if a reaffirmation agreement is not signed after you file bankruptcy. Now, to many of my clients, that sounds scary, but the reality is, your loan company generally does not want the car back. Why would they? The fair market value of most cars is usually less than the outstanding loan balance. Thus, I advise my clients, while I can't guarantee their car will not be repossessed if a reaffirmation agreement is not signed, chances are it won't be. However, the only way to be 100% certain the car won't be repossessed is to sign the reaffirmation agreement.

So, the choice is yours. To sign or not to sign. However, you need to think long and hard if you want to reaffirm the debt because as soon as you reaffirm, you are once again "on the hook" for the debt.

Above I mentioned that debtors have two choices. Debtors actually have three choices if they want to keep their car. The third choice is called redemption. I will cover redemption in another post.

At the Santa Rosa Law Offices of James V. Sansone, our attorney has devoted this practice to providing understanding and detailed bankruptcy assistance to individuals and families throughout the Northern California area. With your best interests in mind, our staff will carefully examine your financial situation and provide the informative advice you need to weigh the benefits of each bankruptcy process and make the strongest decisions for your unique circumstances.

I often get asked, "Can I stop paying child support if I just lost my job?" There are not many straight forward answers in the law, but here there is one, NO!

This begs the question, what can be done when a child support obligation can't be met? A motion for a modification of child support must be filed with the court. Remember, this modification can decrease or increase the amount of child support, depending on the specific facts of the case.

What does a party need to establish in order to be successful in modifying child support? Well, the court will only modify a child support order if there has been a "change of circumstances" since the last prior order. Some courts state that there must be a "material" change in circumstance to justify a modification.

Moreover, if the original order has been previously modified, the evidence must show a material change of circumstances after the last prior order in order to justify further modification. Showing a material change in circumstances requires comparing financial information on which the original support order was based with the most recent financial information relevant to a new order.

Common examples of a change in circumstances include, but are not limited to, the following:

1. Loss of Job


2. Obtaining new employment with higher wages


3. Change in custodial time


4. Illness


5. Receipt of inheritance

The most important fact to remember is this, don't simply stop paying! If you stop paying you may be subject to a motion for contempt or other enforcement proceedings initiated by the other party or local child support agency.

If your circumstances change and you can't afford to pay or you believe the other party's circumstances have changed so that they can afford to pay more money, file a motion to modify child support.

An experienced Sonoma County, Mendocino County, or Lake County family law attorney can assist you with this process and answer all your questions.

For more information on child support in California you can visit the California Department of Child Support Services website.

Continue reading "What can Sonoma County Parents Do When They Can't Afford To Pay Their Current Child Support Obligation?" »

I speak to many individuals who tell me that they will not get married because they don't want to lose their "stuff" if the relationship goes bad. I unfortunately must inform them that they are not as protected as they might think. The California Supreme Court has taken judicial notice of an increase in the number of couples living together without marriage (Marvin v. Marvin (1976) 18 Cal. 3d 660, 665).

The Supreme Court has noted the following examples of persons who may choose to live together without marriage:

1. Persons who make a deliberate decision to avoid the community property system by not getting married;
2. Persons who fear the loss of pension, welfare, or tax benefits that may be occasioned by marriage;
3. Couples who would like to try living together on an experimental basis;
4. Persons who cannot spare the time or money required to dissolve a former marriage;
5. Persons who incorrectly believe that California recognizes common-law marriages.

While the Court did not note this, persons who are unable to get married, including couples of the same sex, should also be added to the above list. In addition, on and after January 1, 2000, unmarried couples of the same sex, or of the opposite sex who are over age 62 and eligible for Social Security benefits, who agree to be responsible for one another's basic living expenses, share a common residence, and meet other requirements, may register with the State of California as "domestic partners" (Fam. Code § 297 et seq).

Although cohabitation by unmarried persons does not give rise to the same legal effects as marriage, unmarried cohabitants may incur certain rights and responsibilities to each other and to third parties because of their relationship and living arrangement based upon tort and contract legal theories.

Persons who want to avoid the community property laws or who just simply don't want to marry must protect themselves by creating a Prenuptial or Cohabitation Agreement. Failing to do this may give raise to liability each party never contemplated or considered.

At the Law Offices of James V. Sansone, of Santa Rosa, California, we understand that family law matters have a long-term impact on not only your life but also your family's life. That is why we take a strategic and compassionate approach focused on long-term solutions that protect your rights and the best interests of your family including marital dissolutions, domestic partner dissolutions, drafting and enforcement of Prenuptial and Cohabitation Agreements.

The commencement of a chapter 13 case creates an estate. The property of the estate created includes all interests of the debtor at the date of commencement of the case and property and earnings of the debtor, including income tax refunds, acquired during the pendency of the chapter 13 case. If you think about it, this makes sense since postpetition earnings of the debtor constitute the principal means of funding the chapter 13 plan.

This allows upward or downward adjustment of plan payments in response to changes in the debtor's circumstances that substantially affect the ability to make future payments.

Ok, so what does this mean in English? Simply put, your future wages belong to the bankruptcy estate. Each year you must submit your income tax returns to the Chapter 13 trustee. If your income increases you may be required to make higher plan payments since there would be more "disposable income" for creditors. The opposite is also true, if there is a decline in your income, you may be able to lower your chapter 13 plan payments also.

The Law Offices of James V. Sansone has devoted its practice to providing understanding and detailed bankruptcy assistance to individuals and families throughout the Northern California area.

I meet with many clients who all ask the same question about a Chapter 13 or Chapter 7 bankruptcy filing, will all my debts be discharged. The answer, like most answers to legal questions, is it depends.

Not all debts are dischargeable in bankruptcy. Common examples of debts that are not dischargeable include, but may not be limited to the following:

• Child Support
• Domestic Support Obligations
• Student Loans (unless an undue hardship can be established)
• Most, not all, tax debt
• Debts obtained by fraud
• Criminal fines and penalties

Only an experienced bankruptcy attorney will be able to properly assist you in determining which of your debts are dischargeable and which debts are not. The Law Offices of James V. Sansone has devoted its practice to providing understanding and detailed bankruptcy assistance to individuals and families throughout the Northern California area.

I get several telephone calls each month from Sonoma County tenants asking if it's illegal for their landlord to collect rent while the subject property is in foreclosure.  What answer do I give them?  The same answer I give most potential clients when dealing with their legal questions.  It depends. 

California Civil Code 890(a)(1) states that “rent skimming" is when a person receives money from the rental of a piece of property, "any time during the first year after the property was purchased", without first applying that money to payments due on any mortgages encumbering that property.

What does this mean?  Well, if the landlord has acquired the property over one year from the collection of the subject rent, it’s not illegal if the landlord chooses to keep the money instead of paying the mortgage. 

“Rent skimming” is also unlawful under federal law.  Federal law does not limit rent skimming to the first year after acquiring the property, but under federal law, it is unlawful for any person to apply the rental income derived for real property to their own use without paying the mortgage, if a person is "engaged in a practice of purchasing residential property subject to a federally insured loans and collecting rents without paying the mortgage." 

While there is no defined time period as provided by California Law, to be unlawful under federal law, a landlord must be engaged in a "practice of purchasing residential property subject to a federally insured loans."  Attempting to prove a person is engaged in a practice of purchasing homes subjected to a federal loan can be difficult to prove. 

The bottom line is this.  Collecting rent when a property is in foreclosure is not per se illegal.  Its legality depends on many specific facts and is determined on a case by case basis.

Simply put, YES!

The Bankruptcy Code requires the court to revoke a discharge on the request of the trustee or a creditor if the discharge was obtained through the fraud of the debtor, and the requesting party did not know of the fraud until after the granting of such discharge; or the debtor acquired property that is property of the estate, or became entitled to acquire property that would be property of the estate, and knowingly and fraudulently failed to report the acquisition of or entitlement to the property, or to deliver or surrender the property to the trustee.

What does this mean? In plain English, committing bankruptcy fraud is a serious offense. Sometimes the bankruptcy court doesn't differentiate between whether you accidentally committed fraud because you weren't aware of bankruptcy laws or whether you maliciously committed the fraud. Bankruptcy fraud is a felony. It carries a sentence of up to five years in prison and/or a fine of up to $250,000.

The best way to prevent fraud is to be 100% honest and know the bankruptcy law; but, of course, not everybody is a bankruptcy lawyer. Your local Sonoma County, Mendocino County, or Lake County bankruptcy attorney can take care of the legalities for you.

I recently worked on a case were a debtor came to me after he received his discharge because a creditor filed a complaint to revoke his discharge. This debtor received property that belonged to the bankruptcy estate after he filed his petition, but did not inform the trustee assigned to his case until almost 10 months after he received it, subsequent to the creditor’s complaint to revoke the discharge. Long story short, we went to trial and the debtor attempted to explain his delay in turning over the property. The court was unimpressed with his reasons, and revoked his discharge.

The moral of this story is simply. Be honest and don’t delay performance of your legal duties as a bankruptcy petitioner, because you can’t close the barn door once the horses escape.

Chapter 13 bankruptcy is classified as a reorganization bankruptcy.  Unlike a chapter 7, during a Chapter 13 bankruptcy, you will not have to turnover any real or personal property. In its place, you will be required to make a structured repayment plan that shows how you will use your income to pay off your debts over time, typically three to five years. 

If your income is too low, or if it is not regular, then you may not be able to make payments according to the schedule and you will not be eligible for Chapter 13 bankruptcy. Also, there are certain debt limits that could prevent you from filing for Chapter 13 bankruptcy.  As of January, 2010, if you have secured debts that exceed $1,010,650 or unsecured debts of more than $336,900, you are not eligible to file for Chapter 13 bankruptcy. 

How much you will be required to pay into your chapter 13 plan is not always a simple question.  Generally speaking, your payment is determined by applying the Means Test. 

The Means Test is a formula applied to determine whether or not the consumer should have enough money available to make some minimal payment to creditors in a Chapter 13 bankruptcy plan.  Simply put, the Means Test calculates your monthly disposable income.  Certain allowable expenses, as determined by IRS guidelines, are subtracted from your income to find your "disposable income."  The law requires that an above median income potential Chapter 13 debtor pay into their Chapter 13 bankruptcy plan 100% of their disposable income as determined by the Means Test.  However, regardless of what your disposable income turns out to be, the debtor must also pass the Chapter 7 Liquidation Analysis Test. 

This analysis looks at what would happen if, instead of a Chapter 13, you filed a Chapter 7 and all of your assets were liquidated, or sold. (It doesn’t mean that this would happen; only that numbers are computed as if it did.) From this amount, you subtract any balance on secured debt, and any exemptions that you claim. Your unsecured creditors must be treated at least as well in your Chapter 13 case as they would be in this imaginary Chapter 7. 

Your Chapter 13 plan will last for either three or five years.  As a general rule, if your average monthly income for the six months prior to your bankruptcy filing was more than the median income for your state for a family of your size, you will have to propose a repayment plan that is five years long.  However, if your average income for the same time period is less than the median income for the state, then you will be able to propose a three year repayment plan. 

If you can’t make your required plan payments, depending on the reasons for the inability to pay, (i.e. job loss), you may be able to modify your plan by filing a motion with the bankruptcy court.  In addition, if making the plan payments would pose an undue hardship, for example, if you were hospitalized for a long period of time, the bankruptcy judge may decide to discharge your debts and end your plan early. 

If you successfully complete your plan, at the end of your repayment plan, all of your remaining debts that are eligible to be discharged will be wiped out by the bankruptcy court.