LOS ANGELES BANKRUPTCY BLOG
Another Chapter 7 Success Story
Oct 18, 2010
In May, 2009, Mrs. S had a rental property foreclosed by the first trust deed lender when her tenants stopped paying rent and she was no longer able to pay the mortgage payments. A year later, the holder of the second trust deed on the property started making demand on her to pay the $49,000 balance on the second trust deed loan which was now an unsecured debt, and threatened to sue her for this debt. (See "Truths About Foreclosure: http://www.labankruptcyblog.com/tp-100928123529/post-100928123820.shtml) Mrs. S also had about $79,000 in credit card debt on which she was falling behind in payments, because the property management business owned by Mr. and Mrs. S was struggling in the tough Southern California real estate economy.
Mrs. S consulted with Weintraub & Selth, APC about bankruptcy options. She wanted to file under Chapter 7 to get the "fresh start" which a Chapter 7 discharge provides, but assumed she would have to file under Chapter 13 and repay her creditors over five years because the annual household income for Mr. and Mrs. S was over $168,000, and the median income for a family of four in California is $79,194. Mr. and Mrs. S were also worried that they would lose their home and cars if they filed Chapter 7. Weintraub & Selth worked with Mr. and Mrs. S for many months to ensure that all allowable expenses were accounted for in the Chapter 7 "means test" so that Mrs. S would be eligible to file Chapter 7. Weintraub & Selth also planned Mrs. S's exemptions so that no assets were at risk in the Chapter 7 case, including the family home, the family business, and all vehicles, jewelry and household possessions.
Because Mrs. S just barely met the eligibility standards for Chapter 7, the Office of the United States Trustee asked for copies of checks and invoices proving the family's monthly expenses for utilities, childrens' activity expenses and home maintenance costs. Weintraub & Selth met with Mr. and Mrs. S at no extra cost to help them compile the documents, and prepared a cover letter and personally delivered the letter and documents to the U.S Trustee. The U.S Trustee was satisfied with the documents provided, and took no action in the case. Mrs. S received her Discharge four months after her case was filed, and she and her family are happily moving forward with their lives with no more creditor calls, letters or threats of lawsuits. Mr. and Mrs. S are very glad they decided to retain Weintraub & Selth to handle their bankruptcy case.
