San Francisco Bankruptcy Attorney Discusses Second Mortgages and Lien Strips

Buying property has always been a good investment, up until it wasn’t.  Growing up, we always hear that property investment was a more safe and valuable investment than any other kind.  Afterall, why pay the high rents every month to a landlord when you can be paying yourself and owning your own home.  That was the case up until the early 2000’s when the mortgage industry started to take a large downward dip.  All of those bad loans that were so easy to obtain and were making so many people rich were now catching up to the homeowners.  Loans that were given with huge interest rates were coming due and the homeowners were unable to pay.  Home prices started to fall drastically; and the huge cash windfall people thought they were going to have when they sold their homes turned into a giant wind tunnel sucking them down into financial ruin.

Many of these homeowners took out second mortgages and equity lines of credit to help them survive.  What many of these people do not know is that if you are in a similar situation that is described above, you may be able to get rid of your second mortgage completely in a Chapter 13 bankruptcy.  In order to qualify for a Chapter 13 “lien strip” you need to show that your house is underwater as to the first mortgage (meaning: that the first mortgage is more than the value of the house).  Therefore, if you meet the Ch. 13 bankruptcy requirements and your house is underwater, the second mortgage can be stripped from the property completely.  Once you have completed your five year Ch. 13 repayment plan, the whole second mortgage is wiped and you are no longer liable for the debt.  The theory behind this is that in a hypothetical scenario, if the house were to foreclose and go through regular foreclosure proceedings, the first mortgage would take the house as the security leaving the second mortgage unpaid anyways.  The second mortgage then would be considered an unsecured debt that would be dischargeable in bankruptcy.

If you have a second mortgage that you think would qualify for a lien strip please speak with an attorney.  If you have questions about bankruptcy or lien strips please give EH Law Group a call at (415) 230-5388 or visit our website at  Our San Francisco bankruptcy attorneys, San Jose bankruptcy attorneys or San Mateo bankruptcy attorneys will be able to assist you.  We will discuss your situation and assess what the best option is for you.  We look forward to speaking with you soon!

Bankruptcy Lawsuits Wage Garnishment

San Jose Bankruptcy Attorney Discusses Wage Garnishments

You never thought they would take it this far, but they did.  You realize that they can find you anywhere and at anytime and take what you have worked so hard for.  This isn’t the plot of the next Saw movie, this is a creditor who is taking 25% of your wages every pay period who you never thought would be able to find you.  Many debtors are going through this very stressful situation.  What happens is the creditor files a lawsuit against you for the debt owed and they obtain a judgment for the debt.  Once they obtain the judgment, the creditor is able to request a wage garnishment which will most likely be granted by the court.  The wage garnishment is then sent to your Human Resources department where your employer is obligated by law to follow the judgment and withhold up to 25% of your earnings every pay period pre-tax.  For most people, 25% of their earnings is debilitating chunk of money to lose every month, not to mention taxes, healthcare and retirement withholdings as well.  But what most people do not know is that this process is much more stressful than it has to be and can be gone immediately at the filing of a bankruptcy.

A wage garnishment is stopped immediately once you file a bankruptcy.  In fact, any lawsuits that have been filed against you will stop immediately after filing a bankruptcy.  This means that once you file, you have the protection of the “automatic stay” and the creditor can no longer take money from your wages.  Depending on if you file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, the entire debt could be discharged and you will no longer be liable for the debt and no creditors will be able to reach your hard earned money.  If this is happening to you, we would encourage you to call a bankruptcy attorney to discuss your situation and see how to stop it before you see your thousands of dollars disappear every month.

If you have questions about bankruptcy please give EH Law Group a call at (415) 230-5388 or visit our website at  Our San Francisco bankruptcy attorneys, San Jose bankruptcy attorneys or San Mateo bankruptcy attorneys will be able to assist you.  We will discuss your situation and assess what the best option is for you.  We look forward to speaking with you soon!

San Francisco Bankruptcy Attorney Discusses Supreme Court Ruling on DOMA and Effects on Bankruptcy

Today the Supreme Court struck down an important part of the Defense of Marriage Act.  The Defense of Marriage Act by the federal government defines marriage as only between a man and a woman which means that only marriages between men and women get federal government benefits.  Now, those benefits extend to same-sex marriages as well.  One federal benefit that gay married persons can enjoy is filing for bankruptcy together.  Prior to this, all gay married couples who share a household, income, assets and debts would have to file for bankruptcy separately.  This meant two fees, two petitions, two 341 hearings.  The petitions would have to be matched with individual information even though their lives were a couple.  This effected most greatly the types of bankruptcy that gay couples could file.  Since the type of bankruptcy a person can file is based on the household income, a gay couple may have to split their incomes in two when determining bankruptcy.  There are times when one of the higher earning partners was forced into a Chapter 13 bankruptcy when they could file for a Chapter 7 bankruptcy if they could claim their partner who had a lower income.  Because, the couple had to also file their taxes separately there was no way to show that the couple were of the same household to permit them to file for Chapter 7.  There were cases that were the opposite as well, where the couple wanted to file for Chapter 13, but had to file for Chapter 7 based on the individual income.  Hopefully, now that bankruptcy is is a right given to all couples, same-sex married couples will seek out more information about bankruptcy and the financial benefits it can give.

If you have questions about bankruptcy please give EH Law Group a call at (415) 230-5388 or visit our website at  Our San Francisco bankruptcy attorneys, San Jose bankruptcy attorneys or San Mateo bankruptcy attorneys will be able to assist you.  We will discuss your situation and assess what the best option is for you.  We look forward to speaking with you soon!

Bankruptcy Divorce

San Mateo Bankruptcy Attorney Discusses Divorce and Bankruptcy

We’ve all heard the old addage, “when it rains it pours” and it is never more true than when a couple files for divorce and then must also file for bankruptcy.  Divorces can be costly especially if both the parties are not in agreement as to how to divide their assets and liabilities.  Kelly Rutherfor, an actress on the hit show “Gossip Girl” just filed for bankruptcy following an extremely contentious divorce and custody battle.  In her case, she had a son that she shared 50/50 custody with, however, because her husband lives in a foreign country and cannot come back to the States the children live with him and she must go overseas to visit them.  She has been fighting to get physical custody of them to no avail.  Rutherford is filing for Ch. 7 bankruptcy claiming over 2 million dollars in debts and only around $23,000.00 in assets.  One of the biggest debts that she owes is to her divorce/family law attorney.

It is no surprise that many Americans have the same problem.  Either the divorce will set the couple back financially or the couple’s grim finances have caused them to get divorced.  It could be very beneficial for both parties to file bankruptcy before the divorce because there will no longer any debts to divide among the couple; an issue that can be a hot button during settlement negotiations.  In California, all debts acquired during marriage are considered community property to be divided among both parties equally no matter what name the debt is under.  Therefore, if the couple files for bankruptcy before the divorce proceedings, they can alleviate this very contentious issue leaving them to settle the divorce more amicably.

If you have questions about bankruptcy please give EH Law Group a call at (415) 230-5388 or visit our website at  Our San Francisco bankruptcy attorneys, San Jose bankruptcy attorneys or San Mateo bankruptcy attorneys will be able to assist you.  We will discuss your situation and assess what the best option is for you.  We look forward to speaking with you soon!


San Francisco Bankruptcy Attorney Discusses Toni Braxton’s Bankruptcy

Bankruptcy affects millions of people in the U.S. every year and many of those people are familiar faces that we have seen before.  Willie Nelson, Debbie Reynolds, Mark Twain, Rembrandt, and Mike Tyson are just a few of the famous people that have filed for bankruptcy in the past.  Toni Braxton, who has filed for bankruptcy twice in the last 15 years, has made headlines again with her most recent case.

The trustee who is in charge of her 2010 bankruptcy case is accusing her of bankruptcy fraud.  They are saying that Toni illegally transferred funds to her ex-husband in an attempt to avoid paying back creditors.  The total amount transferred was $53,490.  This might not seem like a large amount of money when you are in debt somewhere between $10 to $50 million dollars but to the trustee and your creditors this is money that should have been going directly to them.   The trustee is now suing her ex-husband to collect the money that was transferred to him.  Toni is proclaiming her innocence by saying that she did not know that transferring the money was illegal because it was going to pay for personal and business expenses.   If there is a fraud in the transferring of money then the debt does not get discharged in the bankruptcy.

If you have questions about bankruptcy please give EH Law Group a call at (415) 230-5388 or visit our website at  Our San Francisco bankruptcy lawyers, San Jose bankruptcy lawyers or San Mateo bankruptcy lawyers will be able to assist you.  We will discuss your situation and assess what the best option is for you.  We look forward to speaking with you soon!


San Mateo Bankruptcy Attorney Discusses Stockton Chapter 9 Bankruptcy

In June of this year, Stockton, California became the largest city in the U.S. to file for bankruptcy.  After failing talks with creditors, Stockton became a Chapter 9 debtor.  Bob Dies, the city manager of Stockton, blamed the bankruptcy filing on the 1996 decision to give firefighters full healthcare in retirement.  At the time of this decision they thought that this would be cheaper than a pay raise.  In following years more people demanded the same healthcare and they obliged.  Since then, Stockton has been on a spending spree.  They have raised pensions, put numerous amounts of money into their downtown area, and the housing market saw a huge decline in 2009.  Now, sixteen years later they are finding themselves in the middle of a Chapter 9 bankruptcy with millions of dollars owed in debts.

A Chapter 9 bankruptcy provides municipalities with protection from creditors while it is trying to work out a plan to adjust the debts.  Chapter 9 is different from other types of bankruptcy because it does not allow for liquidation of assets.  Under the protection of a Chapter 9 case, municipalities will be able to extend timelines to repay debts, debt refinancing, and the reduction of interest on existing loans.  A Chapter 9 requires a plan to show how you will re-pay your debts.  Deciding which type of bankruptcy will work best for needs can be extremely time consuming and very difficult.  Having the help of an attorney can make this process seem very easy and stress free.  If you have found yourself in a financial situation that you would like to get out of please contact EH Law Group now at any of our locations in San Mateo, San Francisco or San Jose.

San Jose Bankruptcy Attorney Discusses Creditor Lawsuits

There has been a large wave of debtors who have been sued by the creditors in the last few years.  The situation is one that many are familiar with.  You, the debtor, have surmounting debt from use of credit cards, personal loans, payday loans, or have borrowed money from a friend that you are unable to pay off.  So, you just stop paying and the debt continues to rise and rise until it is impossible to pay back even if you were on a payment plan for the rest of your life.  Then one day, you happen to receive a Summons stating that you are being sued by one, two, three or all of your creditors for the debt owed.  As a bankruptcy attorney in the San Francisco Bay Area, I know that this is a common occurrence.  I also know that this causes a lot of stress on a person to be summoned to court for a lawsuit on a debt that they know they owe.  Whether or not you show up to the hearing or write a response is mostly futile in these situations since the creditor only needs to show that you owe the money–which you do.  The creditor will inevitably obtain a judgment, which is basically just a court order that allows the creditor to collect money from you indefinitely.  Some of the ways that they can obtain this money is by a wage garnishment, levy your bank account, or put liens against your property or social security number so that in the future if you ever own any of these assets, they can attach to them in the future.  It does get to be very unpleasant.

A bankruptcy, however, can get rid of the lawsuit as well as the debt.  Once the bankruptcy has been filed, the creditor is no longer able to continue to pursue you in court and the lawsuit stops.  Then when the bankruptcy is completed the debt is gone and so is the lawsuit.  That is two birds in one fell swoop.  If you have a situation like this please contact The Law Office of Eddy Hsu and we will be able to give you a free consultation to discuss the best options for you.  We have offices in San Jose, San Mateo, and San Francisco.  We look forward to speaking with you soon!


San Jose Bankruptcy Attorney Discusses Another Foreclosure Wave

It has been apparent that foreclosure notices are springing up more frequently in every neighborhood in the Bay Area.  But the worse has yet to come.  Zillow expects the resurgence in foreclosures this year, combined with excess inventory of unsold, bank-owned homes will contribute to a 3.7 percent national decline in prices before the market hits bottom in 2013 and stays there until 2016.

“The hangover from this crisis will far outlast the party of the boom years,” said Zillow chief economist Stan Humphries.

Getting through the remaining foreclosures and dealing with the resulting flood of homes on the market in the wake of the bank settlement is a necessary part of the healing process for the U.S. housing market, he added.

According to leading broker dealer Amherst Securities, some 9.5 million homes are still at risk of default and in February it said it expected to see the uptick in foreclosures start to hit in March and April.

There is other evidence that many of the foreclosures that did not happen in 2011 will happen this year.

A January report by the Neighborhood Economic Development Advocacy Project in New York found that in the first half of 2011 the number of 90-day pre-foreclosure notices in New York City outnumbered court foreclosure actions by a ratio of 14 to one, indicating that while proceedings were initiated against many homeowners, they were left incomplete.

“Now the banks have a settlement, foreclosure numbers for 2012 are going to be high,” said NEDAP co-director Josh Zinner.

So if you have a foreclosure or a notice of trustee sale for the coming year please give The Law Office of Eddy Hsu a call and we will be able to help you to stop the foreclosure sale and keep your house.  We look forward to meeting with you!



Our San Jose Bankruptcy Attorney Discusses Short Sales and Foreclosures

It’s a very difficult decision that many San Jose and Bay Area residents have to make: to have your house go into a short sale or foreclosure.  First, a short sale can prove to be difficult because the lender must agree with the value and then grant the short sale to go through before the debtor can sell their property.  This can be a very timely process and may end with no sale at all.  If the sale does go through, since the house is sold for less than what is owed, the debtor is taxed on the deficiency (the difference between the value sold and the value owed to the lender).  Therefore, after a short sale, many debtors are left with thousands of dollars in taxes that they are unable to pay.

If the debtor decides to let the house foreclose, the first lender will take the house as the security and the debtor is no longer liable for any deficiencies even if the house is sold at auction for less.  If the house is underwater and there is a second mortgage on the property, then the second mortgage becomes an unsecured creditor and collect the full amount in the second mortgage just like a credit card debt.  However, a bankruptcy can discharge the full second mortgage along with any other credit cards debts and unsecured debts that the you may have.  This is an option that many debtors can benefit from since it clears away all debt associated with the foreclosed home as well as the rest of the unsecured debts.

If you have any questions on short sales, foreclosures or bankruptcy, do not hesitate to contact the Law Office of Eddy Hsu and we can schedule and appointment to discuss your situation in more detail.


Our San Jose Bankruptcy Attorney Discusses Bankruptcy and Stopping Foreclosure

One home in every 111 homes in the U.S. is currently facing foreclosure.  About a million home foreclosures have been pushed back from previous years to be foreclosed on permanently in 2012.  This means that the influx of foreclosures will cause the market to push back its recovery for another year.  If you are one of these the millions of homes that are facing foreclosure, there is a way to save the home and give you the time that you need in order to get your affairs together.  The idea of being kicked out of the beloved home that you have lived and loved for many years may be very daunting for most people.  But a bankruptcy can help to stop the foreclosure and also help to get your life back in order.  If you receive a foreclosure notice, a bankruptcy is the best way to stop the foreclosure.  Once you file a bankruptcy, the debtor gets the protection of an “automatic stay”.  This means that the debtor’s estate is stayed and no creditors or lenders can foreclose or collect money from the debtor.  A bankruptcy can also let the debtor catch up on the arrears that they have on the house and even strip the second mortgage off the property.

If you house is in foreclosure, please give The Law Office of Eddy Hsu a call and we will be able to discuss the options that you have to save your house.   If  We look forward to speaking with you soon!