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.
Sunday, November 6, 2011
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:
Raxter Law is a local law firm located in Menifee, California that practices Elder Abuse, Estates, Probate, and other related areas of the law.
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.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.
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
Tuesday, October 25, 2011
Menifee Bankruptcy Lawyer launches new website
We have launched a new website dedicated to Bankruptcy. Check it out at:
www.menifeebankruptcylawyer.com
www.menifeebankruptcylawyer.com
Thursday, October 20, 2011
Why banks would rather foreclose
This article is reprinted/reposted from a recent AOL News article, but I think it is very fitting and on point.
"Why won't the bank just reduce the amount of my loan instead of taking my home and then selling it to someone else for way less than I would have been happy to pay?" It's a question that gets asked repeatedly these days, especially by people who are facing foreclosure or are upside down on their mortgages.
For the answer, we turned to Jack Guttentag, the Mortgage Professor and Inman columnist.
Guttentag believes that lenders have been too stingy when it comes to reducing loan balances. Private lenders have offered loan reductions only sparingly, he says, and Fannie Mae and Freddie Mac not at all.
Here's the professor's take on why homeowners can't catch a break on loan reductions.
1. The buck stops there.
The decisions to reduce principal loan amounts are made by the firms that service mortgages -- the same folks who brought the country the robo-signing scandal. As servicing firms, anything they decide must be in the financial interest of their client -- that's your lender, not you. If they depart from customary practice -- and writing down loan balances is a departure from customary practice -- the buck stops with them, Guttentag says. In other words, who's going to take the risk of reducing Joe Homeowner's loan amount and then have to explain it to the boss? To take Nancy Reagan out of context: They just say no.
2. Banks are in the business of making money.
No lender is going to write down the balance of a loan in default just because you owe more than the home is worth. Truth is, there is no benefit to the lender to helping Joe Homeowner keep his house instead of selling it to the next guy. Plus, to help Joe would eliminate the possibility that the bank could also get a deficiency judgment against him. Banks are in this for the squeeze and think of Joe as just the orange. Nothing personal, of course.
3. In this economy, you will likely default anyway.
Sure, you want to believe that the economy is going to turn around and the value of your home will again rise to what you paid for it. After all, hasn't listening to a fairy tale been a surefire way to fall asleep?
From the lender's standpoint, the only reason to write down a loan balance is that it will reduce the chance that you will default. And evidence has shown that people who are heavily underwater -- that's deep in negative equity territory -- are more likely to default than those who aren't. Truth is, negative equity discourages people from making their mortgage payments. They figure: Why keep throwing good money after bad?
4. Banks are short-staffed and the staff they do have is untrained.
Most interactions between mortgage borrowers and servicers are handled by computers or relatively unskilled employees, says Guttentag. Borrowers in serious trouble are referred to a smaller number of more skilled and specialized employees, but until you enter the red zone, you are likely to encounter frustration.
Guttentag says that at the onset of the mortgage crisis, servicers were caught short-handed and the sheer volume of foreclosures in the pipeline hasn't allowed them to catch their breath.
5. Mortgage insurance works against you.
When mortgages carrying mortgage insurance go to foreclosure, banks are protected up to the maximum coverage of the policy, which generally is enough to cover all or most of the loss. This discourages modifications, says Guttentag. Why would a bank do a modification for $15,000 if the $40,000 foreclosure cost is going to be paid by the mortgage insurer? Even if the insurance coverage falls short of the foreclosure cost, the shortfall has to exceed the modification cost before modification becomes financially more attractive.
So there you have it. A five-point plan for keeping homeowners on the hook for that hefty loan balance.
'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose
For the answer, we turned to Jack Guttentag, the Mortgage Professor and Inman columnist.
Guttentag believes that lenders have been too stingy when it comes to reducing loan balances. Private lenders have offered loan reductions only sparingly, he says, and Fannie Mae and Freddie Mac not at all.
Here's the professor's take on why homeowners can't catch a break on loan reductions.
1. The buck stops there.
The decisions to reduce principal loan amounts are made by the firms that service mortgages -- the same folks who brought the country the robo-signing scandal. As servicing firms, anything they decide must be in the financial interest of their client -- that's your lender, not you. If they depart from customary practice -- and writing down loan balances is a departure from customary practice -- the buck stops with them, Guttentag says. In other words, who's going to take the risk of reducing Joe Homeowner's loan amount and then have to explain it to the boss? To take Nancy Reagan out of context: They just say no.
2. Banks are in the business of making money.
No lender is going to write down the balance of a loan in default just because you owe more than the home is worth. Truth is, there is no benefit to the lender to helping Joe Homeowner keep his house instead of selling it to the next guy. Plus, to help Joe would eliminate the possibility that the bank could also get a deficiency judgment against him. Banks are in this for the squeeze and think of Joe as just the orange. Nothing personal, of course.
3. In this economy, you will likely default anyway.
Sure, you want to believe that the economy is going to turn around and the value of your home will again rise to what you paid for it. After all, hasn't listening to a fairy tale been a surefire way to fall asleep?
From the lender's standpoint, the only reason to write down a loan balance is that it will reduce the chance that you will default. And evidence has shown that people who are heavily underwater -- that's deep in negative equity territory -- are more likely to default than those who aren't. Truth is, negative equity discourages people from making their mortgage payments. They figure: Why keep throwing good money after bad?
4. Banks are short-staffed and the staff they do have is untrained.
Most interactions between mortgage borrowers and servicers are handled by computers or relatively unskilled employees, says Guttentag. Borrowers in serious trouble are referred to a smaller number of more skilled and specialized employees, but until you enter the red zone, you are likely to encounter frustration.
Guttentag says that at the onset of the mortgage crisis, servicers were caught short-handed and the sheer volume of foreclosures in the pipeline hasn't allowed them to catch their breath.
5. Mortgage insurance works against you.
When mortgages carrying mortgage insurance go to foreclosure, banks are protected up to the maximum coverage of the policy, which generally is enough to cover all or most of the loss. This discourages modifications, says Guttentag. Why would a bank do a modification for $15,000 if the $40,000 foreclosure cost is going to be paid by the mortgage insurer? Even if the insurance coverage falls short of the foreclosure cost, the shortfall has to exceed the modification cost before modification becomes financially more attractive.
So there you have it. A five-point plan for keeping homeowners on the hook for that hefty loan balance.
Monday, August 29, 2011
Does your company need employee manuals?
Most companies have employee handbooks, but are they necessary? There are definite advantages to having a handbook, such as promoting equal and standardized treatment of all employees. Once rules and procedures are written down, it makes training new employees a breeze. Below are some suggestions for handbooks that can greatly assist an employer in maintaining a safe, legally compliant and enjoyable business.
In California every business is required to provide their employees with certain written policies, such as an at-will policy, sexual harassment policy, anti-harassment policy, safety policy, paid family leave policy, as well as the required information that must be provided with respect to the Earned Income Tax Credit Information Act, state disability insurance, workers compensation benefits, and unemployment compensation. The "At Will" Policy Despite that California law presumes that all employment is at will, there are exceptions. The employee handbook should address the "implied contract" exception. Under a implied contract theory, if an employee has been with the company for a long time and continues to excel and is promised a future at the company, they could claim, upon termination, that the employer breached an implied contract that the employee would be terminated only for "cause." It basically becomes a "he said/she said" situation. However, if the employee has signed an acknowledgment of the employee handbook that clearly states the employment is at will, the acknowledgment supersedes any argument to the contrary. In the handbooks that are drafted by RAXTER LAW, the "at will" employment clause is placed in numerous places within the manual. Harassment Laws The employee handbook should include a detailed section incorporating the legal definition of harassment, the remedies for the victim and the consequences for the perpetrator. California employers are required to provide this information in writing. Privacy Issues It is crucial to discuss whether the company considers voice mails, emails and other electronic communications (that uses company property/equipment) to be private. By law, employees are entitled to a reasonable expectation of privacy. Safety Laws Many employers have become lax in including the required statements regarding workplace safety. All California employers must have a separate Injury and Illness Prevention Program manual. Leaves of Absences As you know, or will soon find out, the interaction of numerous laws concerning medical and other leaves of absences is daunting. Having these policies written in "plain language" is helpful for everyone. Moreover, California law requires employers to provide information on the relatively new Paid Family Leave Act, and information about pregnancy leave rights.
By having a complete but straightforward employee handbook, an employer can promote fairness and
consistency in the workplace and minimize the risk of the kind of arbitrary conduct that can easily lead to lawsuits.
For more information and a printable flyer you can click below:
http://www.raxterlaw.com/Does%20your%20business%20need%20an%20employee%20handbook.pdfRAXTER LAW 27186 Newport Rd, Suite 2
Menifee, Ca 92584 www.raxterlaw.com/smallbusiness (951) 226-5294
www.raxterlaw.com
In California every business is required to provide their employees with certain written policies, such as an at-will policy, sexual harassment policy, anti-harassment policy, safety policy, paid family leave policy, as well as the required information that must be provided with respect to the Earned Income Tax Credit Information Act, state disability insurance, workers compensation benefits, and unemployment compensation. The "At Will" Policy Despite that California law presumes that all employment is at will, there are exceptions. The employee handbook should address the "implied contract" exception. Under a implied contract theory, if an employee has been with the company for a long time and continues to excel and is promised a future at the company, they could claim, upon termination, that the employer breached an implied contract that the employee would be terminated only for "cause." It basically becomes a "he said/she said" situation. However, if the employee has signed an acknowledgment of the employee handbook that clearly states the employment is at will, the acknowledgment supersedes any argument to the contrary. In the handbooks that are drafted by RAXTER LAW, the "at will" employment clause is placed in numerous places within the manual. Harassment Laws The employee handbook should include a detailed section incorporating the legal definition of harassment, the remedies for the victim and the consequences for the perpetrator. California employers are required to provide this information in writing. Privacy Issues It is crucial to discuss whether the company considers voice mails, emails and other electronic communications (that uses company property/equipment) to be private. By law, employees are entitled to a reasonable expectation of privacy. Safety Laws Many employers have become lax in including the required statements regarding workplace safety. All California employers must have a separate Injury and Illness Prevention Program manual. Leaves of Absences As you know, or will soon find out, the interaction of numerous laws concerning medical and other leaves of absences is daunting. Having these policies written in "plain language" is helpful for everyone. Moreover, California law requires employers to provide information on the relatively new Paid Family Leave Act, and information about pregnancy leave rights.
By having a complete but straightforward employee handbook, an employer can promote fairness and
consistency in the workplace and minimize the risk of the kind of arbitrary conduct that can easily lead to lawsuits.
For more information and a printable flyer you can click below:
http://www.raxterlaw.com/Does%20your%20business%20need%20an%20employee%20handbook.pdfRAXTER LAW 27186 Newport Rd, Suite 2
Menifee, Ca 92584 www.raxterlaw.com/smallbusiness (951) 226-5294
www.raxterlaw.com
Thursday, August 11, 2011
Landlords must install carbon monoxide detectors
Numerous deaths have occurred because of carbon monoxide poisoning. In response, California requires every dwelling unit to have and maintain a carbon monoxide detector. But, what if you are a landlord? California legislators have thought about that (you didn’t think they would forget landlords did you?). California places the responsibility for installing and maintaining a CO2 detector on landlords.
In 2010, the California legislature enacted the Carbon Monoxide Poisoning Prevention Act of 2010 with the intent to prevent death and illness resulting from carbon monoxide poisoning.
In addition to the act, further legislation was added requiring that the owners of all rental units with a fossil fuel burning heater or appliance, a fireplace, or an attached garage, install and maintain carbon monoxide detection devices in the unit. This mandate is effective on July 1, 2011 for existing single-family dwelling units, and on January 1, 2013, for all other existing dwelling units.
The new law further requires that the carbon monoxide detector be operable when the tenant takes possession of the unit. Tenants are responsible for notifying the landlord of any problem with the detector, and the landlord has the responsibility to correct any reported problems.
Landlords may enter the units to install, repair, test, and maintain carbon monoxide detection devices.
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