Debt Advizor

The California bankruptcy exemptions chart, see below, details the property you can exempt or protect from creditors when you file bankruptcy in California. You may exempt any property that falls into one of the exemptions categories below, up to the dollar amount listed. You will be able to kept this exempted property after you file bankruptcy. Please note that there are certain debts which you will not be able to erase in bankruptcy. (see Non-dischargeable Debts)

An exemption limit applies to any equity you have in the property. Equity is the difference between the value of the property and what is owed on the property. For example, a car valued at $5000 with a loan of $4500 has an equity value of only $500.

If the property is secured by a loan, such as a car or home, and you are current on the payments, the equity is covered by your exemptions, and you elect to keep making payments on the loan you generally can keep this property through the bankruptcy. If all the equity is not covered by your exemptions the trustee may elect to liquidate this asset and distribute the assets. Generally, in this case, you would be entitled to the value of your exemption in the asset as a cash payment.

Bankruptcy law allows married couples filing jointly to each claim a full set of exemptions, unless otherwise noted.

To keep non-exempt property, a debtor must generally pay the trustee the value of the non-exempt property.

California has two sets of exemptions. You must choose one or the other.

• System 1
• System 2

When you file bankruptcy in California you may also use certain federal exemptions in addition to your California exemptions.

For more information on filing bankruptcy in California explore California Bankruptcy Law.

To determine or confirm the location of a specific meeting or hearing please contact the court directly.

For more information on filing bankruptcy in California explore California Bankruptcy Law.

Eastern District Court California Eastern Bankruptcy Court Court Locations: Bakersfield, Fresno, Modesto, Sacramento Counties of Jurisdiction: Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Fresno, Glenn, Inyo, Kern, Kings, Lassen, Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Solano, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolomne, Yolo, Yuba
Clerks: Richard G. Heltzel Bankruptcy Clerk U.S. Bankruptcy Court 501 I St.,Ste. 3-200 Sacramento, CA 95814 (916) 930-4400 Cheryl Michaels Deputy in Charge 2656 U.S. Courthouse 1130 O St. Fresno, CA 93721 (559) 498-7217 Sharon Walker Deputy in Charge U.S. Bankruptcy Court 1130 12th St., Ste. C Modesto, CA 95354 (209) 521-5160		Judges: Hon. Jane D. McKeag U.S. Bankruptcy Court 501 I St. Sacramento, CA 95814 (916) 498-5564 Hon. Michael S. McManus U.S. Bankruptcy Court P.O. Box 5276 Modesto, CA 95354 (209) 521-5160 Hon. Christopher M. Klein U.S. Bankruptcy Court 501 I St., Ste. 3-200 Sacramento, CA 95814 (916) 498-5543 Hon. Whitney Rimel 2656 U.S. Courthouse 1130 O St. Fresno, CA 93721 (559) 498-7217 Hon. David E. Russell Chief Judge U.S. Bankruptcy Court 501 I St. Sacremento, CA 95814 (916) 498-5525 Hon. Thomas Homan U.S. Bankruptcy Court P.O. Box 5276 Modesto, CA 95354 (209) 521-5160

Northern District Court California Northern Bankruptcy Court Court Locations: Eureka, Oakland, Salinas, San Francisco, San Jose, Santa Rosa Counties of Jurisdiction: Alameda, Contra Costa, Del Norte, Humboldt, Lake Martin, Mendocino, Monterey, Napa, San Benito, Santa Clara, Santa Cruz, San Francisco, San Mateo, Sonoma, Santa Rosa
Clerks: Keenan G. Casady Bankruptcy Clerk U.S. Bankruptcy Court 235 Pine St., 19th Fl. P.O. Box 7241 San Francisco, CA 94120-7341 (413) 268-2300 Roger White Deputy In Charge U.S. Bankruptcy Court Room 3035 280 South First Street San Jose, CA 95113 (408) 535-5118 Dennis J. Bilecki U.S. Bankruptcy Court 99 South E. St. Santa Rosa, CA 95404 (707) 525-8539 Edward Emmons Deputy In Charge P.O. Box 2070 Oakland, CA 94604 (510) 879-3600		Judges: Hon. James R. Grube 3035 U.S. Courtshouse 280 South First St. San Jose, CA 95113-3099 (408) 535-5122 Hon. Alan Jaroslovsky U.S. Bankruptcy Court 99 South E. St. Santa Rosa, CA 95404 (707) 525-8520 Hon. Edward D. Jellen Chief Judge P.O. Box 2070 Oakland, CA 94604 (510) 273-3525 Hon. Marilyn Morgan U.S. Bankruptcy Court Room 3035 280 South First Street San Jose, CA 95113 (408) 535-5100 Hon. Leslie J. Tchaikovsky P.O. Box 2070 Oakland, CA 94604 (510) 879-3540 Hon. Arthur Weissbrodt 280 South First St. San Jose, CA 95113-3099 (408) 535-5116 Hon. Dennis Montali U.S. Bankruptcy Court P.O. Box 7341 San Francisco, CA 94120 (413) 268-2320 Hon. Randall J. Newsome P.O. Box 2070 Oakland, CA 94604 (510) 879-3530 Hon. Thomas E. Carlson P.O. Box 7341 San Francisco, CA 94120 (415) 268-2360

Southern District Court California Southern Bankruptcy Court Court Locations: San Diego Counties of Jurisdiction: Imperial, San Diego
Clerks: Barry K. Lander Bankruptcy Clerk U.S. Bankruptcy Court 325 West F. St. San Diego, CA 92101-6991 (619) 557-6582		Judges: Hon. Louise D. Adler U.S. Bankruptcy Court 325 West F. St. San Diego, CA 92101-6991 (619) 557-5158 Hon. Peter W. Bowie U.S. Bankruptcy Court 325 West F. St. San Diego, CA 92101-6991 (619) 557-5158 Hon. James W. Meyers U.S. Bankruptcy Court 325 West F. St. San Diego, CA 92101-6991 (619) 557-7642 Hon. John. J. Hargrove U.S. Bankruptcy Court 325 West F. St. San Diego, CA 92101-6991 (619) 557-6580

Central District Court California Central Bankruptcy Court Court Locations: Los Angeles, Riverside, Santa Ana, Santa Barbara, and Woodland Hills Counties of Jurisdiction: Los Angeles, Orange, Riverside, San Luis Obispo, Santa Barbara, San Bernardino, Ventura
Clerks: Jon D. Ceretto Executive Officer/ Clerk of the Court U.S. Bankruptcy Court 255 East Temple St. Los Angeles, CA 90012 (213) 894-6244 Phyllis Presley Deputy-in-Charge U.S. Bankruptcy Court 411 W. Fourth St. Santa Ana, CA 92701 (714) 338-5300 Chris Lippens Deputy-in-Charge U.S. Bankruptcy Court 3420 Twelfth St. Riverside, CA 95201 (909) 774-1000 Kathleen Crosser Deputy-in-Charge U.S. Bankruptcy Court 1415 State Street Santa Barbara, CA 93101 (805) 884-4800 Paula Roe Deputy-in-Charge U.S. Bankruptcy Court 21041 Burbank Blvd. Woodland Hills, CA 91367 (818) 587-2900 Dennis Tibayan Deputy-In-Charge U.S. Bankruptcy Court 255 East Temple St. Los Angeles, CA 90012 (213) 894-3118		Judges: Los Angeles U.S. Bankruptcy Court 255 East Temple St. Edward R. Royal Bldg. Los Angeles, CA 90012 (213) 894-3118 Hon. Alan M. Ahart, (213) 894-3745 Hon. Samuel L. Bufford, (213) 894-0992 Hon. Ellen Carroll, (213) 894-4033 Hon. Thomas B. Donovan, (213) 894-3728 Hon. Kathleen P. March, (213) 894-3582 Hon. Ernest M. Robles, (213) 894-1522 Hon. Barry Russell, (213) 894-6091 Hon. Erithe A. Smith, (213) 894-4080 Hon. Vincent P. Zurzolo, (213) 894-3755 Riverside U.S. Bankruptcy Court 3410 Twelth St. Riverside, CA 95201 Hon. Mitchel R. Goldberg, (909) 774-1026 Hon. Meredith A. Jury, (909) 774-1043 Hon. David N. Naugle, (909) 774-1021 Santa Ana U.S. Bankruptcy Court 411 W. Fourth St. Santa Ana, CA 92701 Hon.Robert W. Alberts, (714) 338-5420 Hon. James N. Barr, (714) 338-5430 Hon. John E. Ryan, (714) 338-5450 Northern Division U.S. Bankruptcy Court 1415 State Street Santa Barbara, CA 93101 Hon. Robin Riblet, (805) 884-4860 San Fernando Valley U.S. Bankruptcy Court 21041 Burbank Blvd. Woodland Hills, CA 91367 Hon. Arthur M. Greenwald, (818) 587-2806 Hon. Kathleen T. Lax, (818) 587-2823 Hon. Geraldine Mund, Chief, (818) 587-2840

For more information on filing bankruptcy in California explore California Bankruptcy Law.

• What is bankruptcy?
• What can bankruptcy do for me?
• How can I get a copy of a bankruptcy filing?
• What doesn’t bankruptcy do?
• How often can I file bankruptcy?
• What different types of bankruptcy should I consider?
• Is California chapter 7 bankruptcy (Straight Bankruptcy) right for me?
• Is California chapter 13 bankruptcy (Reorganization) right for me?
• What does it cost to file for bankruptcy?
• In California what property can I keep?
• What will happen to my home and car if I file Bankruptcy in California?
• Can I own anything after bankruptcy?
• Will bankruptcy wipe out all my debts?
• Will I have to go to court?
• Will bankruptcy affect my credit?
• Can I get a credit card after bankruptcy?
• Are utility services affected?
• Can I be discriminated against for filing bankruptcy?
• Can bankruptcy help Get my California driver’s license back?
• What About co-signers?
• I’m married, can I file by myself?
• Can filing bankruptcy stop bill collectors from calling?
• How long after filing bankruptcy will the creditors stop calling?
• Can I erase my student loans by filing bankruptcy?
• Where do I file if I haven’t lived in the same state or district for the last six months?
• If I am going through a divorce how will my ex-spouse filing bankruptcy affect me?

1. What is Bankruptcy?

Bankruptcy is a legal proceeding in which an individual who cannot pay his or her bills can get a fresh financial start. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. (see California Court Directory) Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.

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2. What Can Bankruptcy Do for Me?

Bankruptcy may make it possible for you to:

• Eliminate the legal obligation to pay most or all of your debts. This is called a "discharge" of debts. It is designed to give you a fresh financial start. (see bankruptcy - California exemptions)
• Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments. (Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment.)
• Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
• Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
• Restore or prevent termination of utility service.
• Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.

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3. How can I get a copy of a bankruptcy filing?

You can order a copy of a bankruptcy filing. A basic summary if $29, if you include the creditor list it is $69, and a full paper report is $125. Get Equifax Score Watch Now!

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4. What Doesn’t Bankruptcy Do?

Bankruptcy cannot, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:

• Eliminate certain rights of "secured" creditors. A "secured" creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if your property is taken. Nevertheless, you generally cannot keep the collateral unless you continue to pay the debt
• Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, some student loans, court restitution orders, criminal fines, and some taxes. (see California Non-Dischargeable Debts)
• Protect cosigners on your debts. When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan.
• Discharge debts that arise after bankruptcy has been filed.

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5. How often can I file bankruptcy?

You can file for Chapter 7 bankruptcy again after six years has passed from the date of your last filing. A Chapter 13 bankruptcy can be filed at any time.

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6. What Different Types of Bankruptcy Should I Consider?

• There are four types of bankruptcy cases provided under the law:
• Chapter 7 is known as "straight" bankruptcy or "liquidation." It requires a debtor to give up property which exceeds certain limits called "exemptions", so the property can be sold to pay creditors.
• Chapter 11, known as "reorganization", is used by businesses and a few individual debtors whose debts are very large
• Chapter 12 is reserved for family farmers.
• Chapter 13 is called "debt adjustment". It requires a debtor to file a plan to pay debts (or parts of debts) from current income.

Most people filing bankruptcy will want to file under either chapter 7 or chapter 13. Either type of case may be filed individually or by a married couple filing jointly. (see California Bankruptcy Law’s Chapter 7 or 13?)

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7. Is California Chapter 7 (Straight Bankruptcy) Bankruptcy Right for Me?

In a bankruptcy case under chapter 7, you file a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for "exempt" property which the law allows you to keep. (see bankruptcy- California exemptions) In most cases, all of your property will be exempt. But property which is not exempt is sold, with the money distributed to creditors.If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, a chapter 7 case probably will not be the right choice for you. That is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt. (see California Chapter 7 Bankruptcy)

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8. Is California Chapter 13 bankruptcy (Reorganization) Right for Me?

In a chapter 13 case you file a "plan" showing how you will pay off some of your past-due and current debts over three to five years. The most important thing about a chapter 13 case is that it will allow you to keep valuable property–especially your home and car which might otherwise be lost, if you can make the payments which the bankruptcy law requires to be made to your creditors. In most cases, these payments will be at least as much as your regular monthly payments on your mortgage or car loan, with some extra payment to get caught up on the amount you have fallen behind. You should consider filing a chapter 13 plan if you:

• (1) own your home and are in danger of losing it because of money problems;
• (2) are behind on debt payments, but can catch up if given some time;
• (3) have valuable property which is not exempt, but you can afford to pay creditors from your income over time.

You will need to have enough income in chapter 13 to pay for your necessities and to keep up with the required payments as they come due. (see California Chapter 13 bankruptcy)

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9. What Does It Cost to File for Bankruptcy?

It now costs $200 to file for bankruptcy under chapter 7 and $185 to file for bankruptcy under chapter 13, whether for one person or a married couple. The court may allow you to pay this filing fee in instalments if you cannot pay all at once. If you hire an attorney you will also have to pay the attorney’s fees you agree to.

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10. In California What Property Can I Keep?

In a chapter 7 case, you can keep all property which the law says is "exempt" from the claims of creditors.  California exemptions provides list of the exemptions available for California. In determining whether property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth now. Especially for furniture and cars, this may be a lot less than what you paid or what it would cost to buy a replacement.You also only need to look at your equity in property. This means that you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $50,000 house with a $40,000 mortgage, you count your exemptions against the $10,000 which is your equity if you sell it. While your exemptions allow you to keep property even in a chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. In a chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law. In most cases you will have to pay the mortgages or liens as you would if you didn’t file bankruptcy. (see California Chapter 7 Bankruptcy or California Chapter 13 Bankruptcy? and California Non-Dischargeable Debts)

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11. What Will Happen to My Home and Car If I File Bankruptcy in California?

In most cases you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. (see California bankruptcy exemptions) Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to creditors in chapter 13. However, some of your creditors may have a "security interest" in your home, automobile or other personal property. This means that you gave that creditor a mortgage on the home or put your other property up as collateral for the debt. Bankruptcy does not make these security interests go away. If you don’t make your payments on that debt, the creditor may be able to take and sell the home or the property, during or after the bankruptcy case. There are several ways that you can keep collateral or mortgaged property after you file bankruptcy. You can agree to keep making your payments on the debt until it is paid in full. Or you can pay the creditor the amount that the property you want to keep is worth. In some cases involving fraud or other improper conduct by the creditor, you may be able to challenge the debt. If you put up your household goods as collateral for a loan (other than a loan to purchase the goods), you can usually keep your property without making any more payments on that debt.

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12. Can I Own Anything After Bankruptcy?

Yes. Many people believe they cannot own anything for a period of time after filing for bankruptcy. This is not true. You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after your bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt. You can also keep any property covered by California bankruptcy exemptions through the bankruptcy.

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13. Will Bankruptcy Wipe Out All My Debts?

Yes, with some exceptions. Bankruptcy will not normally wipe out:

• (1) money owed for child support or alimony, fines, and some taxes;
• (2) debts not listed on your bankruptcy petition;
• (3) loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;
• (4) debts resulting from "willful and malicious" harm;
• (5) student loans owed to a school or government body, except if the court decides that payment would be an undue hardship;
• (6) mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor). (see California Non-Dischargeable Debts)

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14. Will I Have to Go to Court?

In most bankruptcy cases, you only have to go to a proceeding called the "meeting of creditors" to meet with the bankruptcy trustee and any creditor who chooses to come. Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation. Occasionally, if complications arise, or if you choose to dispute a debt, you may have to appear before a judge at a hearing. If you need to go to court, you will receive notice of the court date and time from the court and/or from your attorney. To find the location of the court that serves your area visit the California Federal Bankruptcy Court Directory page.

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15. Will Bankruptcy Affect My Credit?

There is no clear answer to this question. Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things any worse. The fact that you’ve filed a bankruptcy can appear on your credit record for ten years. But since bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit.

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16. Can I Get a Credit Card After Bankruptcy?

Yes, there are several options available. While technically not a credit card you could use a bank or debit card to perform activities for which you normally would use a credit card. You also may be able to keep the credit card you already have if the creditor grants approval. If these options do not work you can get secured credit card which is backed by your own bank account.

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17. Are Utility Services Affected?

Public utilities, such as the electric company, cannot refuse or cut off service because you have filed for bankruptcy. However, the utility can require a deposit for future service and you do have to pay bills which arise after bankruptcy is filed.

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18. Can I Be Discriminated Against For Filing Bankruptcy?

No. 11 U.S.C. sec. 525 prohibits governmental units and private employers from discriminating against you because you filed a bankruptcy petition or because you failed to pay a dischargeable debt.

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19. Can Bankruptcy Help Get My California Driver’s License Back?

If you lost your license solely because you couldn’t pay court-ordered damages caused in an accident, bankruptcy will allow you to get your license back.

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20. What About Co-signers?

If someone has co-signed a loan with you and you file for bankruptcy, the co-signer may have to pay your debt.

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21. I’m Married, Can I File by Myself?

Yes, but your spouse will still be liable for any joint debts. If you file together you will be able to double your exemptions. (see California bankruptcy exemptions) In some cases where only one spouse has debts, or one spouse has debts that are not dischargeable then it might be advisable to have only one spouse file. If the spouses have joint debts, the fact that one spouse discharged the debt may show on the other spouses credit report.

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22. Can filing bankruptcy stop bill collectors from calling?

Yes. The automatic stay prevents bill collectors from taking any action to collect debts.

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23. How long after filing will the creditors stop calling?

Once a creditor or bill collector becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks. Creditors will also stop calling if you inform them that you filed the bankruptcy petition, and supply them with your case number. In some cases, you or your attorney should contact the creditor immediately upon filing the bankruptcy petition, especially if a lawsuit is pending. If a creditor continues to use collection tactics once informed of the bankruptcy they may be liable for court sanctions and attorney fees for this conduct.

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24. Can I erase my student loans by filing bankruptcy?

Generally, student loans are not discharged in bankruptcy. In 11 U.S.C. sec. 523(a)(8) there are two exceptions to this general rule:

1. The student loan may be discharged if it is neither - insured or guaranteed by a governmental unit, nor - made under any program funded in whole or in part by a governmental unit or nonprofit institution.
2. The student loan may be discharged if paying the loan will "impose an undue hardship on the debtor and the debtor’s dependents."

Student loans more than 7 years old used to be dischargeable under certain circumstances, but this provision was removed by an appropriations bill passed in October of 1998.

Whether an exception applies depends on the facts of the particular case and may also depend on local court decisions. Even if a student loan falls into one of the two exceptions, discharge of the loan may not be automatic. You may have to file an adversary proceeding in the bankruptcy court to obtain a court order declaring the debt discharged.

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25. Where do I file if I haven’t lived in the same state or district for the last six months?

Law code 28 USC Section 1408 states that the case should be filed where the debtor has lived "for the one hundred and eighty days immediately preceding such commencement, or for a longer portion of such one-hundred-and-eighty-day period." This means that the case should be filed in the bankruptcy district in which the debtor has lived for the greatest portion of the last six months.

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26. If I am going through a divorce how will my ex-spouse filing bankruptcy affect our divorce settlement?

Alimony, maintenance, and/or support are protected from discharge. Divorce decrees and separation agreements are covered by 11 U.S.C. Section 523(a)(15). This section states that these debts are not dischargeable unless:

• (A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor and, if the debtor is engaged in a business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business; or
• (B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor.

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Throughout the United States as well as on a local level, commercial real estate brokers are describing the “wait and see” attitudes of investors on the sidelines awaiting one thing: the market to bottom out. Their phones are still ringing off the hook, but it’s no longer offers they’re fielding, but investors wanting to be notified when properties ripe for foreclosure go back to lender.

“I get multiple calls every day from investors asking if I can please call them when a property goes back to lender,” said a senior vice president of investment properties. “I’ve got an actual list going here.”

According to the 2009 edition of Emerging Trends in Real Estate released in October by the Urban Land Institute and PricewaterhouseCoopers LLP, commercial real estate values are expected to find a bottom to the real estate bust in 2009.

The report, which surveyed more than 700 commercial real estate experts, stated overall, experts are bracing themselves for commercial real estate values falling by 15 percent to 20 percent from their mid-2007 peaks, with more severe declines for lesser-quality commercial properties in secondary and tertiary markets.

“Vulture” investors, as they are called, have raised billions of dollars in recent months in anticipation of opportunities to scavenge distressed assets and debt at discounted prices. Local real estate professionals say they have been in contact with many of the would-be investors, but no one is ready to buy until they feel the market has bottomed out. Instead, investors have circled and watched as the turmoil in the real estate and credit markets has worsened. But when desirable commercial properties begin to go back to the lender, experts expect the Dallas-Fort Worth market to be in a frenzy. The Texas market has withstood the real estate market fall-out considerably well, outperforming many states such as Florida, California and Arizona in both residential and commercial properties. Investors have their eye on Texas properties because they expect the market to bounce back quicker than most others.

Texas is a great place to be right now. When the recovery starts, there’s a lot of money salivating on the sidelines waiting, but ready to pounce when the time is right. Right now many investors are asking about deals and when I tell them we’re at eight cap rates, then they say to call them when caps reach nine. They want to make sure they are in front of us when deals start coming back from lenders.

Investors may pick up these properties for a fraction of their potential worth. But trying to make toxic loans work is time-consuming and labor-intensive, and carries huge risk of its own. People in repayment plans often default a second time. “Right now real estate is difficult to finance without anything approaching extensive leverage,” said Jim Gaines, research economist at the Texas A&M Real Estate Center. “You can probably get financing if you have about 60 percent of price now.” Gaines said those investors looking to pick up bargains may not see the kind of slashing they expect yet. “I think eventually the deals will be there to be had, but it’s going to be a while,” he said. “We are still a ways away from the point where investors lurking on the sidelines will see the kind of bargains they’re looking for.”

Despite the “vulture” label, brokers suggest there is a white knight aspect to the waiting investors. These bad loans are taken off bank balance sheets, where they can be re-assessed, re-priced and put back on market for going rates. The market is essentially digesting itself of the problem and that’s what needs to happen. There won’t be a full recovery until these properties are fully digested. That capital, which is not being invested at this time, includes money that has been allocated for real estate investment by pension funds and commingled funds and where the money raising has been completed.

Other brokers say that one thing that is drastically different in this real estate cycle than in any other he has witnessed has been the big influx of out-of-state money into North Texas commercial properties. When the nation’s real estate market was on track during the past few years, he said he saw amazing amounts of investment funds crossing state lines into Texas. A lot of investors in California, Florida, where the markets were becoming tapped, were buying outside of their wheelhouse here in Texas. As the nation’s real estate market has slowed to a halt, much of the local investor energy return to the North Texas real estate market. Even over the last 12 to 18 months more energy has come back to local players that for several years were being consistently out-bid by out-of-state investors. They’ve really started to re-engage in the last 12 months or so and, in that regard, it’s only going to get better. Are there going to be cents on the dollar deals out there? I’m sure there will be. The smart investor now is figuring out a way to de-leverage because in the market right now, cash is king. The advice to clients is not to bet on falling prices, but to take good deals when they come up in a market such as this one.

With the current economy crisis more and more Americans are taking out payday loans, the number of loans being taken out has risen by a hefty 40 per cent in just 6 months. Many blame the need for these loans on the prices of food and fuel. A payday loan shop manager who did not wish to be named commented that the majority of payday loan providers offer a maximum term of 30 days and very high interest rates. However My Pay Day Loan offers a $1500 Cash Advance at a great rate.

Sometimes a short term loan is all you need

With the upcoming festive season many people see the need for a payday loan as crucial, due to tight lending criteria’s many can’t borrow from banks, building societies or get a credit card. Those unable to repay the loan after 30 days could face serious financial strain.

All this means a major headache for the Us government as they worry all this borrowing will result in a January debt nightmare. A government spokesman commented we are slowly correcting the economy crisis but at this time of year people feel pressured to spend money on food, drink and presents usually money they simply do not have, this worries the government hugely. We want to strongly encourage people to stick to a budget and not to overspend, however as Christmas approaches that can be difficult and a $1500 Cash Advance can help on a temporary basis.

With rapidly increasing levels of foreclosure across the Sand States a growing number of cities across the country are aggressively forcing owners of foreclosed and abandoned properties to clean them up, Las Vegas is going after them with the help of a three-year-old ordinance that, until recently, wasn’t much needed. Under the law, Las Vegas’ Neighborhood Services Department oversees cleanups of decaying or ignored homes that generate neighborhood complaints. The city may water lawns or clean pools and go after the owners for the cost. If they don’t pay, they are slapped with $500-a-day fines.

Other cities, including Garland, Texas, a Dallas suburb of 223,000, are taking other approaches to the mounting foreclosure crisis. Garland requires owners of abandoned and distressed properties — often lenders that repossessed them — to pay the city $2,500 for upkeep, according to a USA Today report. Chicago has banned the use of plywood to board up homes after six months because of concerns that homes stigmatized by plywood attract squatters and crime. Cities in Nevada could enact such a measure, but the county probably couldn’t do so without the approval of Carson City. But there’s a good chance the county could follow Chicago’s lead and prohibit extended use of plywood on the windows of a home. It could be enforced as a misdemeanor or nuisance. The county, which governs the unincorporated parts of the valley, hopes to use about $17.3 million in federal dollars to buy and rehab foreclosed or abandoned single-family homes and rental units.

Anger over the blight caused by foreclosed and abandoned homes is evident in the number of complaints reported by the Southern Nevada Health District. Through Friday, the health district had received 2,772 complaints this year, compared with 1,624 in 2007. The 2007 figure had been a record, by more than 500. Local politicians suspect that local jurisdictions or the state may have to become more aggressive in their approaches, citing recent foreclosure data. In ZIP code 89074, which makes up much of her district, 965 properties are reported to be foreclosed, according to Bargain.com. But some in the real estate industry favor improved communication between them and local governments, versus fines, to address blight.

Mike Krien, president of the National REO Brokers Association and a Las Vegas Valley resident, thinks some cities are fining landowners as a means to raise revenue at a time when budget deficits are common nationwide. He prefers greater teamwork, noting that banks and lending institutions that repossess homes won’t approve spending money to fix homes unless the blight has been documented. If the cities have this proof, they could help expedite the process. The tag team approach is being pursued, too. Henderson recently held a forum to facilitate that, and Krien is working to schedule a summit with area homeowners associations in December.

In terms of legislation, politicians propose allowing homeowners associations to collect all past dues from the banks and lending institutions, versus just six months’ worth that the law now allows. The current law is problematic, HOA leaders say, because associations bear much of the burden to keep up abandoned homes. Accordingly, a community dotted with foreclosures probably will have depleted coffers to attend to the blight.

What is clear is that the seismic changes in the US economy are creating a real estate boom across the Sand States as foreclosures kick in. Consequently there are many real estate bargains still available. New members can search foreclosures free with a trial membership Click here for Bargain.com.. And if you see something of interest there is a five step process to follow:

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Like so many questions, the answer is: It depends. If you have significant equity in your home, absolutely. If you don’t, it’s getting harder to answer that question, especially when our government keeps giving people who owe more than their homes are worth so many reasons not to pay. Last week, the government announced a program that will substantially lower payments for many homeowners who have little or no equity, but only if they are at least 90 days delinquent. Critics say the plan, which applies to loans owned or guaranteed by government wards Fannie Mae and Freddie Mac among others, could encourage people to suspend payments.

Elected officials have been chipping away at that by blaming the foreclosure crisis largely on predatory lenders. In a campaign fact sheet, President-elect Barack Obama says he “recognizes that the real victims in the subprime mortgage crisis are not the lenders, but the millions of borrowers who followed the rules and whose only crime was taking out mortgages that lenders told them they could afford.” Last year, Congress started removing some financial hazards of default when it passed a bill that temporarily waives the income tax on mortgage debt that is canceled when a homeowner is foreclosed upon, sells a home for less than the remaining debt (a short sale) or gets a loan modification that reduces the principal balance. The tax waiver originally applied only to debt on a primary residence canceled in 2007, 2008 or 2009. Last month, in the bailout bill, Congress extended the waiver until 2013.

The government is making it easier for you to walk away from your mortgage.

There are exceptions: The waiver applies only to debt that was used to buy or improve a primary residence. If you took out a home-equity loan or did a cash-out refinance to buy a car, you’ll still owe tax on that debt if it is canceled. For state income taxes, California has partially conformed to the federal law, but only for debt canceled in 2007 or 2008. The Federal Housing Administration is offering two programs to help homeowners get more-affordable mortgages, FHA Secure and Help for Homeowners. Neither requires borrowers to be current on their payments. The program announced Monday goes a step further by requiring homeowners to be late. The Streamlined Modification Program, sponsored by the government agency that oversees Fannie Mae, Freddie Mac and 27 loan servicers, promises to swiftly reduce payments for certain homeowners who appear to be on the verge of foreclosure.

To qualify, you must be at least 90 days delinquent and live in the home as your primary residence. You must owe at least 90 percent of the home’s value. It’s fine if you owe more than it’s worth. Your mortgage must be owned or guaranteed by Fannie Mae and Freddie Mac or held by one of the participating loan companies. If you meet these requirements and can document your income, your servicer will reduce your monthly mortgage payment - including property taxes, insurance and association dues - to 38 percent of your gross income.

The reduction can be accomplished in one or more ways:

• – Reducing the interest rate, but not below 3 percent. (The new rate, if below market, goes back to a market rate after five years.)
• – Extending the term of the loan up to 40 years.
• – Reducing the principal on which monthly payments are calculated. Unpaid principal is added to the loan balance and due when the homeowner sells or refinances. The reduced interest payments never have to be repaid.

If you owe more than the home is worth, the plan will only reduce principal down to 100 percent of market value, according to an official for the Federal Housing Finance Agency, which supervises Fannie Mae and Freddie Mac. If all three of these maneuvers can’t reduce your payments to 38 percent of income, you won’t get a fast-track modification but could still request a customized deal, says the official, who spoke on the condition of anonymity. The streamlined process looks only at income, not assets. If you refinanced your home to buy a Mercedes or own another home, you won’t be expected to sell them to pay your mortgage.

Peter Schiff, president of Euro Pacific Capital, predicts that many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again. “This is a once-in-a-lifetime opportunity,” Schiff says. “People are going to feel like complete morons if they don’t participate. The people getting punished are the ones who never made an irresponsible decision to buy a house they couldn’t afford.”

The government is offering loan servicers $800 for every homeowner they get into the plan. Schiff predicts that loan agents “will be cold-calling people trying to get them into it. Just like they encouraged people to overstate their income to get a bigger loan in the first place, now they will encourage them to understate their income to qualify for a smaller loan.” To prevent fraud, the government says a borrower “must certify that he or she experienced a hardship or change in financial circumstances, and did not purposely default to obtain a modification.” The housing agency official doubts that people will stop paying just to get a modification because it will hurt their credit record, and that will make it harder to get a loan and possibly a job. “Credit bureau reports are checked by employers. They’re taking a big risk missing three payments just to get a lower rate,” she says. An existing lender who sees your credit score deteriorate could also cut back on your credit and possibly raise your rate.

Risking your credit score for a lower rate “sounds like a game of chicken on the lending highway,” says Craig Watts, a spokesman for Fair Isaac, which markets the FICO credit score. A 90-day delinquency will hurt your score, but not as badly as a foreclosure. How many points it takes off depends on other things in your credit file, such as the number and severity of late payments on other accounts. In the latest version of FICO, which is just being rolled out, “one isolated delinquency will do less damage to your score than it has in the past,” Watts says. Consumers who suffer a severe delinquency can rebuild their scores over time by paying all credit accounts on time and keeping their balances low.

“If it was me and I was certain that I could keep my home even after missing a couple payments by working out a deal with the lender, I’d be for keeping the home,” Watts says. “Your score will bounce back.” Schiff predicts that many homeowners will reach that conclusion and that the new program will cost Fannie and Freddie far more than expected. Although the mortgage giants are under a government conservatorship, the housing agency official says that any losses under the program will not be paid for by taxpayers unless Fannie and Freddie exhaust their reserves.

Even with a full-time job, Raul Garza had piled up a modest mountain of credit card debt. His Target store card was brimming every month. His American Express plastic was loaded up with $8,000 in charges, mostly for gas, groceries and household expenses. He bought a new Kirby vacuum from a door-to-door salesman – and charged it. By last spring, the tally had swelled to an uncomfortable $18,000.

Although the 55-year-old San Antonian says he was paying a little over the minimum payment each month, it was like chipping away with a teaspoon. Worried he’d never dig her way out of debt, Garza turned to one of the hundreds of “debt settlement” companies that promise, for a fee, to eliminate consumers’ unpaid bills by negotiating with their creditors.

In ads that blaze across TV screens, radio airwaves and computer screens, they promise results like “getting out of debt easy … while saving you thousands!” In Garza’s case, that’s not exactly how it turned out. After making $250-a-month payments since June to a San Antonio-area company, Garza says he’s financially worse off than when he started. Not only have his credit card bills not been whittled down but, by following the company’s advice to stop making payments, he says he’s now getting calls from creditors.

“I’m scared. I now owe them even more money because of late fees and interest,” said the state employee, who asked that his real name not be used. He’s one of thousands of consumers nationwide each year who sign up with so-called “debt settlement,” “debt relief” or “debt negotiation” companies. By whatever name, they can be risky. And – in an economy hobbled by layoffs, foreclosures and a credit crunch – they’re attracting more interest from overloaded consumers.

Stephen Cox, spokesman for the national Better Business Bureau, said there’s been a recent “spike” in inquiries from U.S. consumers asking about debt negotiation companies. Based on nearly 100,000 inquiries last year alone, he said, “our complaints will be up in 2008.” Gayle Weller, consumer protection analyst with the state Attorney General’s Office, said her office has seen a similar surge in calls. Some debt companies, she said, “play on people’s ignorance and their desperation.” Plenty of consumer groups warn consumers to be wary.

Folks in financial hot water can find themselves in “water that’s even hotter,” said Barry Goggin, president of the Better Business Bureau of Northeast California, based in West Sacramento. “Sometimes they’re grasping at life preservers without knowing who’s holding the other end.” In California, debt settlement companies are loosely regulated by the state Department of Corporations. Earlier this year, state Assemblyman Ted Lieu, D-Torrance, authored a bill to ramp up regulation of debt settlement companies, which he says have been “operating under a decades-old law not designed for the current environment.” His bill, designed to protect consumers from getting “scammed by a bad company,” would require more stringent licensing, caps on fees and more consumer disclosures. It passed the Assembly this year but died in a Senate banking committee. Lieu plans to revive it in 2009.

There are plenty of reputable companies out there to provide debt counseling and money management. To find the right one requires some homework. If you’re trying to get your debts reduced, try the do-it-yourself approach first, say Weller and other consumer advocates. Call your creditors directly and ask about better repayment terms and lower interest rates. If that’s not successful, look for a company that provides credit counseling. “If you need help managing your money, there are reputable credit counseling organizations that can advise you, help you develop a budget, and offer free educational materials and workshops. They can sit down with you and discuss your entire financial situation … to solve your money problems,” said Federal Trade Commission spokesman Frank Dorman.

A Debt Management Plan or DMP creates a payment plan to assist a client in full repayment of their debt. Therefore, the debts are not charged off, but instead paid in full. There is no negative impact to one’s FICO score because of repayment through a DMP, unless that client misses payments. Missed payments are equally negative whether the individual is on a DMP or repaying on their own. The concept that paying back the credit cards at reduced rates will harm one’s score is completely incorrect. In fact, the client’s score will likely improve due to the reduced debt load. This is a common misconception that prevents potential clients from seeking credit counseling.

Also be careful about jumping too quickly into a “debt management plan,” or DMP, where you pay a monthly fee to a company that pays down your debts, based on lowered rates it negotiates with your creditors. Even if your credit card debts get paid off at reduced rates, those charge-offs can cause long-term damage to your credit rating. As the BBB’s Goggin put it: “Your bad debts will drop your credit score like a ton of bricks.” For more tips on how to choose a debt settlement or credit counseling company, see accompanying box to the right.

Yes if it is a hell of a struggle, you have little or no equity, and you live in California. Lenders and developers have through the years shown a great deal of ability to maneuver unsophisticated buyers into crummy real estate deals. The reason that the one act rule exists is to put the risk of these deals on the lender, not the buyer. The purpose is to discourage bad underwriting, dishonest marketing, and unjustified price inflation by making it very, very hard for a lender to get back the money if they lent more on a mortgage than a house was worth. The system is designed to let people walk away. California has a system that puts a higher premium on keeping people out of debt slavery than avoiding bank losses. I see nothing wrong with that legislative choice.

Except now, homeowners get to have their cake and eat it: rather than walk away from their house, they can stay in it, become delinquent on a mortgage, and then have their lender restructure their loan into something easier to repay. There a few caveats are, of course. For one thing, your loan has to be owned or guaranteed by Fannie Mae or Freddie Mac, and it has to be worth at least 90% of your home’s present value. For another thing, you have to be paying more than 38% of your income in mortgage payments right now. And then of course there’s the ding to your credit, the importance of which is easy to overstate — even the official FICO spokesman says that “one isolated delinquency will do less damage to your score than it has in the past,” and that “if it was me and I was certain that I could keep my home even after missing a couple payments by working out a deal with the lender”, that’s what he’d do.

If the government passed a bill giving $1,000 to anybody who asked, then it would be entirely responsible for every personal finance columnist in the land to give advice on exactly how to get that money. And the situation here is similar: the government is passing a bill which essentially gives money, in the form of greatly reduced liabilities, to people who default on their upside-down mortgages. Incentives matter: if you reward default in this manner, then people will be more likely to default, and quite rightly too.

Many homeowners who have little or no equity will stop paying their mortgage and then reduce their income to get the biggest payment cut possible. They could stop working overtime or, if two spouses work, one could quit. After the modification, they could try to boost their income again. This is a once-in-a-lifetime opportunity. If you can get your principal reduced by hundreds of thousands of dollars just by quitting your job for a few months, that’s a deal which makes a certain amount of sense. It’s a pretty perverse incentive for the government to give you, but that’s the hand that millions of Americans are now being dealt. And it’s entirely the fault of the people who dreamed this scheme up.

Remember that it’s not a crime to default on your mortgage. The banks are perfectly happy scraping around in the fine print of credit-card agreements to screw their customers; the customers should be perfectly happy similarly to optimize their own situation with respect to the banks.

From certain parts of the country we’re getting a lot more questions about real estate. Real estate is fine in some areas, but in places like Michigan and California, in fact from most of the Sand States there are a lot of people fighting foreclosure.

Are you noticing an uptick in calls from people in financial distress?

We hear from people in financial distress when the economy is good and bad. What’s changed is that we’re hearing from a lot of scared people. They are watching the TV news and panicking about the doom and gloom that’s being reported. Turn off the TV and focus on your situation. It’s not as bad as the drama queens on TV are presenting it. But don’t get me wrong; there are some hurting people. But most people will be OK if they live on less than they make, save for emergencies and get rid of their debt.

What leads people to get into a situation where they are crippled by debt?

They don’t bother. They don’t know where their money is going or what they are doing with it. If people would take the time to sit down and do a budget, they would actually have a clue about their money. Instead they wander around like Gomer Pyle on Valium and wake up at retirement and think, “Shazam! Where’s all my money?”

What are the key steps to getting out of debt?

The first thing you have to do is set up a written budget, and you must do this every month. We have more information here. If you don’t have a budget, then you don’t know where your money is going. You don’t build a house without a blueprint, so why spend your money without one? Give every dollar of your income a name before the month begins. Once you are current with all your creditors, you need to save $1,000 for a rainy-day emergency fund. Bad things do happen, so you need to be ready for them. This won’t cover all the big things, but it will cover the little things until you are able to pay off your debt and create a fully funded emergency fund. Remember, though, this is not for vacations or for buying things - this is for emergencies only. Now that you have a budget and you have $1,000 in an emergency fund, you can start your Debt Snowball. The Debt Snowball is simple to understand, but it requires tons of effort.

You’ll need to list all your debts in order of smallest payoff balance to largest. We do not list them in order of interest rate, because it is important to have some quick wins. After you have listed your debts, pay the minimum payment to stay current on all the debts except the smallest. Every dollar you can find from anywhere in your budget goes toward the smallest debt until it is paid off. Once the smallest is paid, the payment from that debt, plus any extra money, goes toward the next smallest debt. You continue this snowball so that by the time you get to the bottom, you have an avalanche.

Does the typical person, with an average of 10-plus credit cards, have a basic lack of financial knowledge? Or are we Americans insufficiently disciplined with our finances? Do we have both problems?

It’s a combination of both. Many people aren’t taught how to handle their finances, and that is sometimes how they get into the situation of having 10-plus credit cards. But because they aren’t disciplined with their income, their spending habits get out of control, and they can’t seem to get rid of those credit cards. People need to learn more about money so they know what to do with their money.

In a weak economy, does fear help serve to correct bad financial behavior?

No. The most disturbing thing in this weak economy is some people’s reactions. Don’t react based on fear or panic.

With 401(k)s shrinking with the stock market, do you have any advice for alternative savings vehicles?

You don’t need an alternative. The key is to think long term. One hundred percent of the 10-year periods in the stock market’s history have made money - including the years after the Great Depression. Keep investing steadily, and think long term.

How much money should the average American try to save per paycheck?

As a rule of thumb, I suggest that people save 15 percent of their before-tax gross income for retirement. But I also suggest that you should pay off all your debt, except for your house, before you start to save or continue to save for retirement. This might be hard for some people, but things will be fine if you don’t focus on retirement for a few months while you get the rest of your financials in order. If you pay off all your debt first, you’ll be able to save more for retirement than you ever thought.

What advice do you give people about spending for the holidays? Are there simple steps to avoid major traps and overspending?

People need to be reasonable and look at the amount of money they have coming in and what they are able to spend on Christmas this year. Make a list of everyone you need to buy a gift for, how much to spend on each person, total it, and this is your Christmas budget. People get into the mall, don’t know what they are looking for or how much they want to spend and then come out spending way more than they wanted to or could afford. If you are in a situation where you are not able to spend as much as you normally do for Christmas, don’t! Of course, it’s hard to tell your kids that Santa may not bring them as many toys as their best friend next door, but don’t go into debt just so you can keep up with the Joneses! If you set a Christmas budget and pay for everything in cash, you won’t spend more than you can afford. And don’t buy yourself anything while you’re shopping! Last year 69 percent of people bought themselves a gift while doing their Christmas shopping. Christmas is a time for giving to others, not yourself!

What should young people know about money, and how do parents make those lessons clear?

Young people need to know everything they can about money. They need to know how to earn money and how to spend, save and give. The best way parents can teach their children this is by doing it themselves. Parents need to remember that their children are watching them, and they need to straighten up and show their children what they are doing and why they are doing it.