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Thursday, December 22, 2011

New laws that every employer or business should know

New laws that take effect in 2012 that every employer or business should know. 

Several new employment laws will impact California employers’ day-to-day operations and policies in 2012. Unless specified, all new legislation goes into effect on Jan. 1, 2012.

* Credit Check
AB 22 prohibits employers and prospective employers, not including certain financial institutions, from obtaining and using consumer credit reports (credit information) about applicants or employees.
The prohibition does not apply to “managerial positions,” defined as those who qualify for the executive exemption from overtime. This exception reinforces the need to make the correct exempt/nonexempt classification at the time you decide to recruit for an open position.
The prohibition against obtaining and using credit reports also does not apply to the following:
- Law enforcement positions and positions for which the information is required by law
- Positions that involve regular access (other than in connection with routine solicitation and processing of credit card applications in a retail establishment) to bank or credit card information, Social Security numbers, and date of birth
- Positions in which the person is, or would be, a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on behalf of the employer
- Positions that involve access to confidential or proprietary information, as defined . Positions that involve regular access to cash totaling $10,000 or more of the employer, a customer, or client during the workday

* Pregnancy Disability Leave
SB 299 requires all employers with five or more employees to continue to maintain and pay for health coverage under a group health plan for an eligible female employee who takes Pregnancy Disability Leave (PDL) up to a maximum of four months in a 12-month period. The benefits are at the same level and under the same conditions as if the employee had continued working during the leave period.
Under current law, employers were only required to provide benefits for pregnancy leave to the same extent and for the same length of time as they would for other temporary disability leaves. If the employer was covered by the federal Family and Medical Leave Act, it had to provide continuing coverage during the twelve weeks of FMLA leave.
The new law requires group health insurance continuation coverage for all employers with five or more employees regardless of how they treat other temporary disability leaves and regardless of FMLA coverage. Employers should review their policies to ensure compliance with this new law.

* Willful Misclassification of Independent Contractors
SB 459 provides new penalties of between $5,000 to $25,000 for the “willful misclassification” of independent contractors. Willful misclassification is defined as: “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”
The law also imposes joint liability on non-attorney outside consultants who knowingly advise an employer to treat an individual as an independent contractor to avoid employee status.

* Written Commission Agreement
AB 1396 requires employers who have commission pay arrangements to put those agreements into a signed written contract. The written contract must set forth the method by which the commissions will be computed and paid. If the contract expires but the parties keep working under the expired contract, the contract terms are presumed to remain in effect unless superseded by a new contract or the employment relationship is terminated. The bill is effective January 1, 2013. Employers have the entirety of 2012 to bring their commission agreements into compliance.

* Notice of Pay Details
AB 469 requires employers to provide nonexempt employees, at the time of hire, a notice that specifies:
- The rate of pay and the basis, whether hourly, salary, piece commission or otherwise, including any overtime rate
- Allowances, if any, claimed as part of the minimum wage, including meal and lodging allowances
- The regular pay day designated by the employer as required under the Labor Code
- The name of the employer, including any “doing business as” names
- The physical address of the employer’s main office or principal place of business and any mailing address, if different
- The telephone of the employer
- The name, address and telephone number of the employer’s workers’ compensation carrier
The law also requires notice of any other information the Labor Commissioner deems material and necessary. The Labor Commissioner is to provide a template. The new law only applies to nonexempt employees, which again highlights the need for properly classifying employees at the time of hire.
If there is any change to the information in the notice, the employer must notify each employee, in writing, within seven calendar days of the changes, unless such changes are elsewhere reflected on a timely wage statement or other writing required by law.
This legislation also increases penalties for wage violations and makes further changes regarding collection of such penalties, including an increase in the statute of limitations.

* Organ and Bone Marrow Donor Leave
SB 272 clarifies the implementation of California’s organ and bone marrow donor leave law (Labor Code sections 1508-1512). Existing law provides up to 30 days of leave in a one-year period for organ donation and up to five days of leave in a one-year period for bone marrow donation. The new legislation clarifies that the days of leave are business days, not calendar days, and that the one-year period is measured from the date the employee’s leave begins. Existing law stated that employers’ could require use of sick and vacation leave, but did not mention paid time off (PTO). The new legislation clarifies that employers can require the use of a specified number of earned but unused days for PTO.

* Genetic Information
SB 559 amends the Fair Employment and Housing Act (FEHA) to state that employers are prohibited from discriminating against employees on the basis of genetic information. The legislature noted that the range of protection provided by the federal Genetic Information Nondiscrimination Act (GINA) is not complete for California. Also, FEHA applies to employers with five or more employees while the federal law applies to employers with 15 or more employees.
Genetic information is defined as information about any of the following:
- The individual’s genetic tests
- The genetic tests of family members of the individual
- The manifestation of a disease or disorder in family members of the individual.
Genetic information includes: any request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by an individual or any family member of the individual. Genetic information does not include information about the sex or age of any individual.
This prohibition against discrimination on the basis of genetic information is in addition to the existing state law prohibition against discrimination based on a medical condition, including genetic characteristic.

* Gender Expression
AB 887 amends the Fair Employment and Housing Act to further define “gender” to include both gender identity and “gender expression” and to make clear that discrimination on either basis is prohibited. Current law only uses the term gender identity. AB 887 also amends Government Code section 12949 relating to dress codes to include that an employee must be allowed to dress consistently with both the employee’s gender identity and gender expression.
“Gender expression” is defined as “a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.” This definition is not a change from existing law relating to gender identity.

* E-Verify
AB 1236 relates to the E-Verify program; a federally created program that allows employers to use an Internet-based system to electronically verify the employment eligibility of newly hired employees.
E-Verify compares Form I-9 documentation against federal government databases to verify employees’ employment eligibility.
AB 1236 allows employers to continue to choose to use E-Verify, but prohibits California state agencies and local governments from passing mandates that require employers to use E-Verify.
Several cities in California passed local ordinances requiring the use of E-Verify in certain circumstances. For example, a Mission Viejo city ordinance requires the city and certain employers with city contracts to verify the eligibility of new employees through E-Verify. This new law prohibits such state or local mandates, unless required by federal law or as a condition of receiving federal funds.

* Interference With Rights Under Leave Laws
AB 592 adds language to the California Family Rights Act (CFRA) and the Pregnancy Disability Leave law (PDL) that makes it unlawful to interfere with or in any way restrain the exercise of rights under these laws. This added language should not be a change to existing employer obligations since this is already a requirement under the federal Family and Medical Leave Act (FMLA).

* Administrative Penalties
AB 240 allows an employee that alleges a minimum wage violation to recover liquidated damages pursuant to any complaint brought before the Division of Labor Standards Enforcement. Existing law allows such damages in any complaint before a civil court, but not in an administrative proceeding before the Labor Commissioner. This new law would allow the Labor Commissioner to also award such damages. Under the new liquidated damages provision, the employee would be entitled to recover an amount equal to the wages unlawfully unpaid, plus interest.

* Wage Penalties
AB 551 increases the maximum penalty from $50 to $200 per calendar day for each worker paid less than the determined prevailing wage and increases the minimum penalty from $10 to $40 per day for violations of prevailing wage obligations. These obligations apply to certain state or federal contracts and generally require a set wage that is significantly higher than minimum wage.
It also increases the penalty from $25 to $100 per calendar day, per worker, against contractors and subcontractors that fail to respond to a written request for payroll records within 10 days.

* Farm Labor Contractors – Wage Notices
AB 243 amends Labor Code section 226 to expand the information that must be included on pay statements, but only for farm labor contractors. Employers that are farm labor contractors must now disclose on the itemized payroll statement furnished to their employees, the name and address of all legal entities (for example other growers or other farm labor contractors) that secured the employer’s services. The bill provides that this listing would not create any legal liability on the part of the legal entity.

* Agricultural Labor Relations
SB 126 affects certification of bargaining representatives for agricultural employees. Existing California law prohibits agricultural employers from engaging in unfair labor practices with regard to agricultural employees electing their labor representatives. Under current law, the Agricultural Labor Relations Board (ALRB) can refuse to certify an election if it determines that employer misconduct affected the election result.
The new law, SB 126, provides that if the ALRB finds employer misconduct that “in addition to affecting the outcome of the election, would render slight the chances of a new election reflecting the free and fair choice of employees,” then the ALRB can certify the labor union as the exclusive bargaining agent for employees.

* Insurance Non-Discrimination Act
Existing California law requires health care service plans and health insurance policies to provide group coverage to the registered domestic partner of the employee or insured equal to the coverage provided to the spouses of employees. SB 757 closes an existing loophole and prevents employers that operate in multiple states from discriminating against same-sex couples by not providing the same insurance coverage for domestic partners as they do for spouses.
The new law provides that every group health care service plan contract and every group health insurance policy that is marketed, issued, or delivered to a California resident is subject to the requirement to provide equal coverage to domestic partners as is provided to spouses, notwithstanding any other provision of law. Under the new law, even if the employer’s principal place of business and majority of employees are located outside of California, no policy or certificate of health insurance marketed, issued or delivered to a California resident shall discriminate between spouses or domestic partners of a different sex and spouses or domestic partners of a same sex.
A willful violation of this provision by a health care service plan is a crime.

* State Contracts – Gender or Sexual Orientation Discrimination
SB 117 outlaws the state of California from entering into contracts of more than $100,000 with companies that discriminate against the employees on the basis of gender or sexual orientation with regard to benefits. Existing law prohibits discrimination between employees with spouses and employees with domestic partners. The new law makes it clear that companies doing business with the state of California cannot deny equal benefits to same-sex spouses.

* Apprentice Programs
SB 56 changes the audit requirements for apprenticeship programs. Currently, the Division of Apprenticeship Standards within the Department of Industrial Relations is required to randomly audit all apprenticeship programs during each five-year period to ensure compliance with specified requirements, including industry-specific training criteria. This new law eliminates the mandate of random audits during five-year increments, and instead directs the Division to conduct audits of apprenticeship programs generally. It also creates requirements for applications for building and construction trades programs for approval of a new or expanded apprenticeship program.

* Safe Lifting – Hospitals
AB 1136 provides that general acute care hospitals must maintain a safe patient handling policy for patient care units, including trained lift teams or training in safe lifting techniques for staff. The safe patient handling policy must be kept in accordance with the California Occupational Safety and Health Act and should be part of the Injury Illness and Prevention Program (IIPP) of these specific employers.

* Workers’ Compensation Legislation
The governor signed these five workers’ compensation bills that were all supported by CalChamber.
- AB 335 – Requires the workers’ compensation administrative director (AD) to work with the Commission on Health and Safety and Workers’ Compensation (CHSWC) to develop regulations regarding notices to injured workers; requires AD and CHSWC to develop and make accessible a booklet written in plain language about the workers’ comp claims process; streamlines and simplifies other notices to employees.
The new law also states that workers’ compensation notices posted by employers must now include the website address and contact information that employees may use to obtain further information about the workers’ compensation claims process and an injured employee’s rights and obligations, including the location and telephone number of the nearest information and assistance officer. The administrative director is required to make available on the department’s website informational material regarding the workers’ compensation claims process, written in plain English.
- AB 378 – Lowers workers’ compensation costs by establishing guidelines for dispensing compound drugs, the circumstances under which those drugs would be covered and the reimbursement amount, and removes the incentives for physicians to refer patients to pharmacies in which the physician or physician’s family has a financial interest.
- AB 397 – Seeks to address the underground economy problem by singling out contractors that do not have workers’ compensation coverage but requiring contractors that are exempt from having coverage at the time they are licensed to certify they are still exempt or have gotten coverage at the time of their license renewal.
- AB 1168 – Lowers costs for employers and insurers by establishing a fee schedule for vocational experts’ services.
- AB 1426 – Streamlines the workers’ comp process and eliminates duplicative bureaucracy and inconsistency by eliminating the court administrator position.
The governor also signed a Workers’ Compensation related bill that CalChamber took no position on:
- AB 228 – Amends California Insurance Code section 11780.5 to authorize the State Compensation Insurance Fund (SCIF) to provide workers’ compensation coverage to a California employer whose California employees temporarily work outside the state and whose injuries while performing out-of-state work might lead to workers’ compensation liability in some other state.
Under existing law, SCIF could rightfully deny coverage for out-of-state workers’ compensation claims, creating the risk of personal injury lawsuits by employees as a result of their employer not having workers’ compensation insurance coverage in place for such injury claims. The new law expands coverage through partnerships between SCIF and other qualifying carriers, who insure workers’ compensation risks in California, and the other states where the California employees are temporarily working.

* DFEH Procedural Regulations
Effective October 7, 2011, the Department of Fair Employment and Housing (DFEH) has instituted new regulations relating to procedures for filing, investigating and processing discrimination and harassment claims. DFEH is the state agency charged with enforcing the state Fair Employment and Housing Act and handling complaints of discrimination and harassment. Overall, the regulations make it easier for claimants to file their complaints and initiate a DFEH investigation.
For example:
- The statute, as written, requires that a complaint filed with the DFEH be “verified.” The new regulations do not require the claimant to sign the complaint. Instead, the complaint can be signed by the claimant’s attorney or other designated representative.
- The DFEH will accept an unsigned complaint if neither the claimant nor an authorized representative can sign it before the statute of limitations expires. The Fair Employment and Housing Commission, which hears cases brought before it by the DFEH, objected to this regulation on the ground that it contradicts the statutory requirement, but the DFEH disagreed and issued the regulation.
- The new procedural regulations allow for liberal construction of complaints.
– For example, if a claimant brings a complaint alleging only discrimination, but the DFEH believes the facts could support retaliation, the DFEH will construe the complaint to allege both discrimination and retaliation even though the claimant did not bring any such claim. As a result, it will be harder for employers to dismiss claims on the ground that the employee never raised the claim before the DFEH.
- The new procedural regulations allow the DFEH to accept complaints that appear untimely on their face and investigate whether the complaint actually was brought within the statute of limitations. This makes it easier for claimants and less likely that employers can have the claim dismissed at an early stage.
For more information on the DFEH regulations, visit www.dfeh.ca.gov.

For all your legal business needs contact RAXTER LAW. Raxter Law provides legal services to businesses in a cost-effective manner. Call today (951) 226-5294

Tuesday, December 20, 2011

What are Special Needs Trusts? How can a Special Needs Trust help?

What are Special Needs Trusts? How can a Special Needs Trust help?

If you want to leave money or property to a loved one with a disability, you must plan carefully. Otherwise, you could jeopardize your loved ones ability to receive Supplemental Security Income (SSI) and Medicaid benefits. By setting up a "special needs trust", you can avoid some of these problems.

Owning a house, a car, furnishings, and normal personal effects does not affect eligibility for SSI or Medicaid. But other assets, including cash in the bank, will disqualify your loved one from benefits. For example, if you leave your loved one $10,000 in cash, that gift would disqualify your loved one from receiving SSI or Medicaid.

A Special Needs Trust can help protect your loved ones

A way around losing eligibility for SSI or Medicaid is to create whats called a "special needs trust." Then, instead of leaving property directly to your loved one, you leave it to the special needs trust.
You also choose someone to serve as trustee, who will have complete discretion over the trust property and will be in charge of spending money on your loved ones behalf. Because your loved one will have no control over the money, SSI and Medicaid administrators will ignore the trust property for program eligibility purposes. The trust ends when its no longer needed -- commonly, at the beneficiarys death or when the trust funds have all been spent.

Trust Funds will be used for the "benefit" of your loved one

The trustee cant give money directly to your loved one -- that could interfere with eligibility for SSI and Medicaid. But the trustee can spend trust assets to buy a wide variety of goods and services for your loved one. Special needs trust funds are commonly used to pay for personal care attendants, vacations, home furnishings, out-of-pocket medical and dental expenses, education, recreation, vehicles, and physical rehabilitation.

For More Information

Contact Raxter Law to scheduale a free consultation to discuss your estate planning needs. Raxter Law provides estate planning services to the areas of Menifee, Sun City, Murrieta, Temecula, Hemet, and surrounding areas.

Monday, December 12, 2011

Judgment Collection "How do I collect a judgment?"

Once a judgment is obtained (either in California, or domesticated from another state or country to California) the judgment-creditor must then take steps to enforce the judgment. A judgment is itself is nothing but a piece of paper. You as the creditor must actively "enforce" the judgment.

The most common remedies and enforcement procedures include:
(1)placing liens on real property owned by the debtor;
(2)levying upon income the debtor may currently have
(3)levying bank accounts.

The attorney at RAXTER LAW can also use different strategies to locate such assets depending on the individual debtor, including judgment debtors’ examination. This is the process where a "debtor" is brought into a court to give sworn testimony relating to thier assets.

In the end, the goal is to collect the judgment you worked so hard to obtain. As you can see this can be obtained in many different way. We prefer to enter into voluntary payment agreements with the debtor, thus reserving the "legal enfrocement" as the last resort. However, you as the judgment creditor are entitled to collect the judgment and our office will work to see that happens.

Raxter Law / Menifee Lawyer enforces judgments for its clients in a low to no cost manner.

If you have a judgment that you would like to have collected, please contact us today.
(951) 226-5294  www.menifeelawyer.com

Wednesday, November 30, 2011

Thinking of adding “Inc.” to your business name? Want to incorporate your business?

Thinking of INCing your business?
Thinking of adding “Inc.” to your business name? Want to incorporate your business?
In general incorporating your business can provide the business owner the following advantages:


Sole proprietorship and partnerships are subject to unlimited personal liability from a judgment arising out of a business debt. Which means, creditors can and will hold the business owner personally liable for debt. If the creditor is successful in obtaining a judgment that can enforce the judgment by seizing or garnishing your personal property such as a home, savings, or other personal assets. The most common way to protect your personal assets from business-related lawsuits is by incorporating your business. No matter the size of your business, it’s worth investing in your business to protect your personal assets. Please take note that incorporation by itself is not sufficient to protect or isolate your personal assets, there are other formalities that must be followed to secure the protection that is offered by incorporating your business.

It is advisable that you contact your local small business attorney before deciding if incorporation is right for your business.

Did you know that a judgment that is awarded against you in favor of a creditor can devastate your personal credit score? Even a small judgment can have major impacts on your credit score. This is another important reason to incorporate your business.

Incorporation can offer some tax advantages. The advantages depend on many factors such as whether the corporation elects to be taxed under subchapter "S" or "C" of the Internal Revenue Code.

Another huge advantage to incorporation is that a corporation “lives forever.” Meaning if a sole proprietor dies the business generally “dies” or ends with the death of the proprietor.

Generally, as a business entity corporations are easier to market and sell to an investor and usually more attractive to buyers than a sole proprietorship.

Incorporation may enhance the “image” of your business by increasing your credibility and prestige in its dealings.

A corporation can offer anonymity. For example, if a business owner wants to have a small business without causing their identify to be public knowledge, the best choice is to incorporate.
Raxter Law is a law office concentrating on the needs of Small Business. If you have any questions contact Raxter Law at (951) 226-5294.

Tootsie Roll Sues Footzyroll, Claims Likelihood of Confusion Between Candy Bar and Soft Shoe Brand

Tootsie Roll sues Footzroll, claiming brand confusion.

Tuesday, November 29, 2011

Mobile Billboard advertising displays can now be regulated by the local government

Mobile Billboard Advertising Displays (AB 2756)

This bill created Section 395.5 of the Vehicle Code, which defines “mobile billboard advertising display” as an advertising display that is attached to a wheeled, mobile, non-motorized vehicle that carries, pulls or transports a sign or billboard and is for the primary purpose of advertising. This bill also amended Section 21100 of the Vehicle Code to give local authorities the ability to adopt rules/regulations by ordinance/resolution to regulate mobile billboard advertising; this includes establishing penalties that could authorize removal of the mobile billboard advertising display. In addition, VC Section 22651 was amended to say that the mobile billboard advertising display may be towed when left parked or standing in violation of a local ordinance. Warning citations advising of the consequences, including towing of the mobile billboard display, are sufficient enough warning to the public.

Raxter Law represents local businesses. If you are a business owner or starting a business feel free to contact the attorney at Raxter Law to discuss your legal needs.

Monday, November 28, 2011

How to collect a debt - How to get someone to pay the debt they owe you or your business


How to collect a debt
When a customer or a party refuses to pay on a debt that they owe…what do you do? Below, are a few things to consider when collecting an outstanding debt:

First, you should take a minute or two to find out why the customer hasn’t paid. It could be that they are refusing to pay because that customer is unsatisfied with your product your service. In this case, good customer service skills will quickly resolve the problem.

Second, you may consider some type of mediation. Generally, mediation is only effective for large debtors or when the debt itself is in dispute. Nowadays mediation can be expensive (comparable to filing a lawsuit) but if the debt is in question mediation may be a quick way to validate the debt or its amount. Of course, the debtor must be willing to participate in mediation – which is another issue all together.

Thirdly, the dreaded “Lawyer Letter” can and should be sent. The power the “lawyer letter” wields is amazing. Generally, if a customer is just delaying payment for one reason or another a letter from a lawyer is effective. Also, the “lawyer letter” is an effective tool to determine the resolve of the debtor. If the debtor ignores the letter, you can get an insight into the uphill battle it will take to obtain payment.

Fourth, if you have any collateral – take it! You or your business will have to follow the proper steps to foreclose on a security interests you may have, but that is what collateral is for. If your business sold product to a customer you may have a security interest in the product sold. Anytime you decide to foreclose or take collateral time is of the essence. You and your lawyer must work quickly before the debtor transfers the property of encumbers is any further. This is a time that having a lawyer on speed dial is very handy.

Lastly, (or if you don’t have any collateral/security interests) you will direct your lawyer to file suit against the debtor. If the amount owed to you is under $7,500.00 (or $5,000 for a entity) you can file suit in small claims court. This is the preferred method since the process is simplified, quick, and inexpensive.

If the amount owed to you or your business is over $7,500.00 you will need to file suit in Superior Court. It is recommended that you retain the services of an attorney (if you are a corporation – you must be represented by an attorney) in order to properly file suit in Superior Court. The fees paid to your attorney may be recoverable and added to any judgment against the debtor.

Jeremiah Raxter of Raxter Law concentrates the practice on business and corporate law, civil litigation, including breach of contract, and enforcement of debts and judgments. Raxter Law represents several local businesses as in-house counsel.

Saturday, November 19, 2011

BEWARE OF LOW COST or CUT RATE BANKRUPTCY PROVIDERS

Below is a reprint of an article that appeared on MSN Money.

Here are a few things that should rasie the red flag when you interview bankruptcy lawyers:
1. Did you meet with the lawyer? (if not, find a law firm that will allow you to meet with the lawyer and not an assistant)
2. Did the lawyer advise you the advantages or disadvantages of filling for bnakruptcy? Every case has its pros and cons
3. Is the lawyer you met (if you even got to meet the lawyer) the same lawyer that will attend the 341(a) meeting with you?
4. Will the lawyer accept calls from your creditors?
5. Is the lawyer open to receiving calls from you?
6. Is the lawyer charging you for a credit report? Why?
Raxter Law / Menifee Bankruptcy lawyer works differently than most bankruptcy law firms:
- You meet with the lawyer who will prepare your case - FREE CONSULATIONS
- The initial consultation is schedualed for an hour - plenty of time to discuss your situation in detail
- The lawyer you meet will be with follow you through the whole process
- You NEVER have to ask your legal question to a paralegal/assistant on the phone (no gatekeepers here)
- No charge for credit reports
- Low cost credit counseling (required to file)
- Low flat fee
Read the article below and do your research and then give us a call:
(951) 226-5294

Beware cut-rate bankruptcy advice


Bankruptcy has become little more than a few months in purgatory rather than the 7-year ache -- and lifelong disgrace -- it once was.
Deborah and Victor Valle fell behind on their mortgage payments last year after Victor, a 43-year-old union truck driver, was idled by the Southern California grocery workers strike.
When their lender started foreclosure proceedings, the Valles hired a lawyer, David Baran, to file a Chapter 13 bankruptcy so they could keep their home and have time to make up the late payments.
Baran filed the bankruptcy papers on Oct. 3, 2003. Within a few weeks, Victor was back at work and the couple had enough cash to bring their mortgage current.
But the attorney failed to file the necessary paperwork to stop the foreclosure and didn't show up for a key hearing -- all the while, the Valles said, assuring them that everything was fine.
On Dec. 5, 2003, the couple learned that their home had been sold.

2 types of bankruptcy mills

"Somebody comes to your door and says you have four days to move out," said Deborah, 39, the mother of four. "That was a shock."
The Valles now live in a budget Orange County motel. The real estate company that bought their four-bedroom house in La Mirada, Calif., quickly sold it to another family. Deborah sadly watched the new owners move in recently as she was driving by her former home.
As bankruptcy filings have soared to new records, many consumers are turning to high-volume bankruptcy law practices and bankruptcy-petition preparers for help in reorganizing their finances, staving off foreclosure or wiping out debt. Dubbed "bankruptcy mills" by their critics, many advertise heavily on radio and television, while others deluge homeowners in foreclosure by direct mail -- which is how the Valles found their attorney.
Bankruptcy mills can come in two flavors:
  • High-volume practices run by attorneys, who may or may not ever meet their clients before appearing in court.
  • Storefront bankruptcy-petition preparers who advertise cut-rate services, usually without a lawyer's help.
Either way, critics say, the results can be disastrous. Some mills employ bait-and-switch tactics, advertising a low-cost bankruptcy and then jacking up the fees. Others insist they can help debtors avoid insolvency for a fat up-front charge, only to push clients into filing -- or filing the bankruptcy paperwork without the clients' knowledge.

Bad advice costs the consumer

Critics say the mills often give poor advice, causing their clients' cases to be dismissed, leaving them saddled with debts that could have been erased or encouraging them to file when they shouldn't.
Dawn Carr of Phoenix used a paralegal to file Chapter 7 liquidation to wipe out her student loan debt. It wasn't until two years later, when a collection agency started calling, that she learned student loans only rarely can be erased in bankruptcy. Hers wasn't.
"So now I have a bankruptcy on my credit report that is essentially an empty one," Carr fumed. "What makes me more upset about the whole thing is that they should have known and didn't say a word, but they sure didn't have a problem taking my money for all the fees."
Debtors also can lose property that should have been protected. Miguel Vasquez of Lancaster, Calif., lost his home because of a bankruptcy preparer's incompetence, according to his attorney, Oscar Parra.
The preparer talked Vasquez into using his girlfriend's Los Angeles address as his own because the preparer didn't want to drive to Lancaster, more than an hour away, to attend the bankruptcy hearing, Parra said. Vasquez, who speaks little English, didn't understand the repercussions of the decision -- and apparently, neither did the preparer.
Because the Lancaster property wasn't listed as his primary residence, the bankruptcy trustee could -- and did -- seize the home to pay Vasquez' creditors. Had the preparer listed the property correctly, Vasquez' equity in the property would have been protected under state law, Parra said.

An increasing problem

The U.S. Trustee Program, which supervises bankruptcy case administration, says bankruptcy mills are an increasing problem. The program filed 243 actions in fiscal year 2002 for attorney misconduct, up 62% from the year before. Actions against bankruptcy petition preparers rose 43%, to 1,150.
Among the cases:
  • A bankruptcy-petition preparer in Woodland Hills, Calif., advertised $99 bankruptcies, only to use high-pressure sales tactics on low-income elderly and disabled clients to boost the fee to $650.
  • A bankruptcy-petition preparer in Alexandria, Va., called himself a "foreclosure specialist" and charged up to $3,500 for his services, which included trying to buy clients' homes at below-market prices and then renting the properties back to them.
  • An Oklahoma City attorney repeatedly failed to show up for bankruptcy hearings, in one case forcing a disabled client to make a 280-mile journey to attend a rescheduled meeting.
  • A Denver attorney in at least five cases redeemed his clients' property from foreclosure proceedings, reselling each time for profits of up to $50,000.
  • In Los Angeles, the U.S. Trustee last year forced attorney Claudia Phillips to sell her practice as part of a settlement agreement after she repeatedly failed to meet with clients or represent them adequately in court. Court papers said Phillips allowed others to forge her signature and those of her clients on documents, adding that Phillips' husband, Kenneth, who was not a lawyer, actually ran the practice and offered legal advice.
Another problem, bankruptcy attorneys say, is lawyers who push clients with few assets into Chapter 13 repayment plans rather than the Chapter 7 liquidation plans that make more sense. The reason? Chapter 13's increased complexity means higher fees -- and the repayment plan puts the attorney first among all the creditors who get repaid.

DIY bankruptcy on the rise

The problem of bad or incompetent advisers has grown so acute in recent years that two years ago the then-U.S. Trustee for the Southern California bankruptcy court, one of the busiest in the nation, took the extraordinary step of warning consumers about the perils of discount advice.
The trustee, Maureen Tighe, now a bankruptcy court judge, said debtors were "routinely" losing property in bankruptcy that should have been protected or were winding up stuck with debts that should have been erased.
The report, co-authored with the Los Angeles County Bar, focused on the rise of bankruptcy-petition preparers in the area. Nearly one in three bankruptcy filings in Southern California is "pro se" ("for self"), which means the filer has no attorney and has typically used a bankruptcy-petition preparer. The rate is nearly one in two in Santa Barbara, home of the largest bankruptcy-petition preparer chain, We the People.

Some firms cry 'foul'

Some of those dismissed as bankruptcy mills, however, say they're getting a bum rap.
"We do thousands and thousands of bankruptcy filings a year, and the vast, vast, vast majority have gone through just fine," said Jason Searns, general counsel for We the People, which has 150 offices in 28 states. "We are serving a huge, underserved market that can't afford lawyers."
We the People is the nation's largest legal self-help chain, advertising $199 bankruptcies, $349 divorces and low-priced business incorporation services. The company does not provide legal advice, Searns said, but helps consumers fill out the appropriate forms to represent themselves in court.
"Is it perfect for everyone? No. There are some people who really should go to lawyers," Searns said. "But people have the right to do it themselves if they want to, just as people have the right to go to Home Depot and do their own bathroom."
Petition preparers and discount attorneys say they're being lumped in with incompetents and scam artists as part of a legal turf war by higher-priced attorneys trying to protect their fees. The high-volume operators say they offer consumers a low-cost alternative to regular bankruptcy attorneys, who typically charge $800 to $2,500 for a bankruptcy filing.

Advice that's simply wrong

But critics say too many consumers are being scammed, ending up with botched cases or filing for bankruptcy when they really shouldn't.
"'Bankruptcy-petition preparer' is a nice term for something that's evil," pronounces Leon Bayer, a Los Angeles bankruptcy attorney with 25 years' experience who now represents the Valles. "It's a street-corner paralegal who thinks that 'whatever a lawyer can do, I can do,' and their clients pay the price."
Then again, bankruptcy-mill attorneys may not be much better. In addition to representing clients whose attorneys have served them poorly, Bayer has collected some of the direct-mail appeals his clients receive when their lenders start foreclosure proceedings, a public process that tips off bankruptcy mills that someone might need their services. Some of the most deceptive letters were sent by attorneys soliciting business, Bayer said.
"Chapter 13 is NOT BANKRUPTCY," one attorney-sent letter proclaims, "but rather the 'Wage Earner Plan' designed to allow financially troubled persons to pay their bills, not wipe them out."
Of course, Chapter 13 is a bankruptcy filing. In return for paying some of their debts over three to five years, consumers can have the rest of their debts erased. In Chapter 7, most unsecured debts (other than student loans and recent taxes) are wiped out without a repayment plan.
Both types of filings put an automatic stop to any foreclosure or eviction proceedings, but Chapter 13s typically make it easier to protect the equity in a home. In a Chapter 7, the home's equity may be used to pay creditors.

For the Valles, justice is more bitter than sweet

Unlike some bankruptcy-mill victims, the Valles actually knew they were filing for Chapter 13. But the Valles say their attorney failed to act when their lender gave notice that it wanted to reinstitute foreclosure proceedings, a routine procedure known as "a motion for relief from the automatic stay."
After receiving a letter from the court about the motion, the Valles said they phoned their attorney and visited his office and were reassured the matter would be taken care of. A month after the lender filed its motion, the Valles got notice that the court had granted the lender's request. Court records show no opposition to the motion that was filed, and the Valles said the attorney failed to attend the hearing. Less than 10 days later, the home was sold. The Valles have received some justice. Bankruptcy court Judge Thomas Brown recommended that Baran be disbarred from bankruptcy practice, ruling that his "failure to perform services competently . . . directly caused the debtor, Victor R. Valle, to lose his home in a foreclosure sale."
The Valles are pursuing a malpractice case against Baran as well. But the most they can hope for is a return of the home equity they lost when their house was sold. They won't be able to get their house back or receive any compensation for the trauma they experienced.
"There's no such thing as 'pain and suffering'" in such cases, Deborah Valle said. "We lost our house, and that's it."
Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.

Thursday, November 10, 2011

Secretary of State now sends welcome letters

Beginning on September 26, 2011, the Business Programs Division of the California Secretary of State ceased sending a blank Statement of Information (SOI) to newly formed corporations and limited liability companies. Instead, the CA SOS began sending out welcome letters congratulating newly formed entities and providing helpful information regarding SOI due dates and additional business information and resources.

If you are a business owner who requires legal assistance, Raxter Law is a law office concentrating on Small Businesses.

Sunday, November 6, 2011

What is a Conservatorship?

WHAT IS A CONSERVATORSHIP?
Conservatorships are judicial processes by which a probate court judge appoints a responsible person to serve as the conservator of anther adult. It is also known as a living probate. Just about anyone, including the proposed conservatee, can file a petition for conservatorship. Conservators are appointed according to priority as follows: 1.) spouse; 2.) adult child, 3.) parent, 4.) sibling, 5.) any other interested person, and 6.) the public guardian. If the person with highest priority declines to act, he or she can nominate another. If all qualified family members and friends refuse to serve, the court will likely appoint a private professional fiduciary. All conservators are entitled to reasonable fees for their services and are paid from the conservator’s estate. Fees are paid, however, only after fee statements have been reviewed and approved by the probate court judge.

The scope of a conservator's power is separated into two parts, the "person" and the "estate." Power over the "person" includes authority to make decisions regarding day to day activities, such as where a conservatee lives, what they do, how they do it and who they visit. Power over the "estate" includes authority to make decisions about the conservatee's assets, such as managing rental property, collecting income, paying bills and investing. The scope of a conservator’s powers may include both the "person" and "estate" or they may be limited to one or the other.
Being involved in a conservatorship action can be very emotionally draining. If you are faced with the prospect of a conservatorship, contact Raxter Law for a free consultation, so we can dicusss all of your options.  Call (951) 226-5294.  

Why people choose to file Bankruptcy

When people are facing long-term financial challenges and are in need of a solution that will enable them to have a fresh start, they may consider filing for Chapter 7 bankruptcy in the state of California.

Below, your local bankruptcy lawyer has compiled a list of common reasons why people choose to file for Chapter 7:

1. To stop wage garnishment. When people are having their wages garnished, they may choose to file for Chapter 7 to put an end to the garnishments. However, it is important to note that wages that are garnished for litigation or child support payments will not be impacted by Chapter 7 – meaning people will still be responsible for paying such expenses.

2. To address large amounts of unsecured debt. People who have accumulated a great deal of unsecured debt (i.e. credit card debt) may file for Chapter 7 to have their debt discharged. Remember, people who have high balances on their credit cards and fall behind on their payments often incur interest and late fess which make it harder to pay off amounts that are owed.

3. To put a stop to foreclosure temporarily. Many people choose to file for Chapter 7 when they learn that their home is being subjected to foreclosure. While Chapter 7 may not prevent foreclosure in all cases, it can put a temporary halt to proceedings.

These are just some of the many reasons people file for Chapter 7. If you are thinking about filing for this type of bankruptcy, take the time to contact Raxter Law your local bankruptcy lawyer to set up a FREE consultation, so we can discuss all of your options.

Raxter Law is your local Bankrutpcy Lawyer serving Wildomar, Menifee, Canyon Lake, Perris, Murrieta, Temecula, and Hemet.

Monday, October 31, 2011

Mikey Rooney speaks out against Elder Abuse

“Elderly abuse has to be stopped, and it’s going to be a law and a crime,” said ninety year old Mickey Rooney after a fundraiser at the San Diego Air and Space Museum. In March, Mickey Rooney testified in front of the Senate Special Committee on Aging after he was allegedly the victim of elder abuse himself. From my experience, his testimony sums up elder abuse succinctly:
Elder abuse comes in many different forms – physical abuse, emotional abuse, or financial abuse. Each one is devastating in its own right. Many times, sadly, as with my situation, the elder abuse involves a family member. When that happens, you feel scared, disappointed, angry, and you can’t believe this is happening to you. You feel overwhelmed. The strength you need to fight it is complicated. You’re afraid, but you’re also thinking about your other family members. You’re thinking about the potential criticism of your family and friends. They may not want to accept the dysfunction that you need to share. Because you love your family and for other reasons, you might feel hesitant to come forward. You might not be able to make rational decisions. What other people see as generosity may, in reality, be the exploitation, manipulation,and sadly, emotional blackmail of older, more vulnerable members of the American public.
Often times, the abuser is not a stranger but is rather someone known to the victim, usually by blood. In Mr. Rooney’s case, the alleged perpetrator was Mr. Rooney’s own stepson. Mr. Rooney eventually took out a restraining order against him after verbal and physical abuse, which included taking his identification cards and denying him food and medicine. Only one in seven elders abuse cases are reported, although the numbers of the abused are likely to grow as the population ages.

Raxter Law is a local law firm located in Menifee, California that practices Elder Abuse, Estates, Probate, and other related areas of the law.

Thursday, October 27, 2011

BASIC ADVANTAGES AND DISADVANTAGES OF BUSINESS ENTITIES

1. Sole Proprietorship

a. Advantages:

(1) No organizational formalities.

(2) Decision making is informal and owner has sole authority, subject to any delegation to agents.

(3) No qualification requirements for doing business in other states.

(4) Minimal reporting to governmental entities.

(5) Business profits are subject to only one tax, at the individual level, and are not subject to double tax as would be the case if the profits were realized by a C corporation.

(6) Losses are available on the owner’s personal income tax return and can offset other income (subject to the passive loss rules).

b. Disadvantages:

(1) Owner has unlimited liability for obligations and liabilities of the business.

(2) Death or disability of owner terminates business.

(3) Sale or other transfer of business requires transfer of individual assets.

(4) No opportunity to utilize equity capital contributed by persons other than the owner.

(5) Business profits are taxed as income to the owner and, as a result, are subject to self-employment tax as well as income tax.

2. General Partnership

a. Advantages:

(1) Multiple owners can provide a combination of individual resources and talents.

(2) Minimal formalities are required for organization.

(3) Decision-making may be informal, although partnership agreement is generally used to establish procedures for making decisions.

(4) No qualification requirements for doing business in other states.

(5) Minimal reporting to governmental entities.

(6) Business profits are subject to only one tax, at the individual partner level, and are not subject to double tax as would be the case if the profits were realized by a C corporation.

(7) Losses are available on the partners’ personal income tax returns and can offset other income (subject to the passive loss rules).

(8) Special allocations may be made for income tax purposes.

(9) Disproportionate distributions may be made to partners.

b. Disadvantages:

(1) Partners have unlimited liability for obligations and liabilities of the business.

(2) Death, disability, or withdrawal of a partner may terminate partnership, although this can usually be handled by appropriate provisions in partnership agreement.

(3) All partners have the right to participate in management.

(4) All partners have broad authority to act on behalf of, and incur debts and liabilities for, the partnership.

(5) Business profits are taxed as income to the individual partners and, as a result, may be subject to self-employment tax as well as income tax.

3. Limited Partnership

a. Advantages:

(1) Limited partners enjoy limited liability.

(2) Only general partners participate in management so that limited partners can be equity owners without the general partners giving up control.

(3) There are no limitations on the number or types of partners.

(4) Existence is unaffected by the death or transfer of interest by a limited partner.

(5) Business profits are subject to only one tax, at the individual partner level, and are not subject to double tax as would be the case if the profits were realized by a C corporation.

(6) Losses are available on the partners’ personal income tax returns and can offset other income (subject to the “at risk” and passive loss rules).

(7) Special allocations may be made for income tax purposes.

(8) Disproportionate distributions may be made to partners.

b. Disadvantages:

(1) Formalities are required for organization.

(2) Qualification is required for doing business in other states.

(3) Regular reporting to governmental entities is required.

(4) General partners have unlimited liability for obligations and liabilities of the business.

(5) Death, disability, or withdrawal of a general partner may terminate partnership.

(6) Limited partners have limited ability to participate in management or decision making.

(7) Business profits are taxed as income to the individual partners and, as a result, may be subject to self-employment tax as well as income tax to the extent they are allocated to general partners.

(8) Transfer of interests may be subject to securities law regulation.

4. Limited Liability Company

a. Advantages:

(1) All members enjoy limited liability.

(2) No limitation on the number or types of members.

(3) Centralized management is available if an LLC is manager managed.

(4) Assuming LLC is taxed as a partnership (see above), business profits are subject to only one tax, at the individual member level, and are not subject to double tax as would be the case if the profits were realized by a C corporation.

(5) Losses are available on the members’ personal income tax returns and can offset other income (subject to the “at risk” and passive loss rules).

(6) Special allocations may be made for income tax purposes.

(7) Disproportionate distributions may be made to members.

b. Disadvantages:

(1) Formalities are required for organization and operation.

(2) Qualification is required for doing business in other states.

(3) Regular reporting to governmental entities is required.

(4) Termination results from the death, disability, or withdrawal of a member under the laws of some states.

(5) Interests are not freely transferable.

(6) Business profits are taxed as income to the individual members and, as a result, may be subject to self-employment tax as well as income tax.

(7) Transfer of interests may be subject to securities law regulation.

5. C Corporation

a. Advantages:

(1) All shareholders enjoy limited liability.

(2) Ownership interests are freely transferable.

(3) Perpetual existence unaffected by the death of shareholders or transfer of shares.

(4) Centralized management.

(5) No limitation on the number or types of shareholders.

(6) Flexibility of financing is available through the sale of various types of securities to many investors.

(7) Tax-favored fringe benefits are available to employee-shareholders.

(8) Income is taxable at corporate rates, which are for the most part for the most part lower than individual rates.

b. Disadvantages:

(1) Formalities are required for organization and operation.

(2) Qualification is required for doing business in other states.

(3) Regular reporting to governmental entities is required.

(4) Income is subject to double taxation.

(5) Losses of business may not be deducted by individual shareholders.

(6) The distribution of property by a C corporation to its shareholders is generally a taxable event for income tax purposes as to both the corporation and the shareholders. Thus, withdrawing property from a corporation can be extremely expensive from a tax standpoint.

6. S Corporation

a. Advantages:

(1) All shareholders enjoy limited liability.

(2) Ownership interests are freely transferable (subject to restrictions imposed by contract to preserve S corporation status).

(3) Perpetual existence unaffected by the death of shareholders or transfer of shares.

(4) Centralized management.

(5) Business profits are subject to only one tax, at the individual shareholder level, and are not subject to double tax as would be the case if the profits were realized by a C corporation.

(6) Losses are available on the shareholders’ personal income tax returns and can offset other income (subject to the “at risk” and passive loss rules).

b. Disadvantages:

(1) Formalities are required for organization and operation.

(2) Qualification is required for doing business in other states.

(3) Regular reporting to governmental entities is required.

(4) Strict qualification rules must be met on a continuing basis, which among other things limit the number and types of shareholders.

(5) The distribution of property by an S corporation to its shareholders is generally a taxable event for income tax purposes.

FOR MORE INFORMATION OR TO CONTACT A SMALL BUSINESS LAWYER CALL RAXTER LAW
 at (951) 226-5294
Local Small Business Lawyer