Stephanie Stephanie Dean





New Federal
Bankruptcy Law




Real Estate













Stephanie Stephanie Stephanie


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• If I file a Chapter 7, am I going to lose my house? (Car, Furniture, Jewelry, Cat)


There are exemption laws that protect certain kinds of property when a person files bankruptcy. As long as you don't have more equity (the value of the property after subtracting any loans against it) than what the exemption allows, you will not lose that property in a Chapter 7. If you do own something that can't be protected, there is the option of filing a Chapter 13 instead, protecting your property that way and still saving a lot of money. TOP ^

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• I'm behind in house payments. What can I do?

If you want to keep your house, your best bet is to file a Chapter 13. An experienced bankruptcy attorney can help you put together a plan to pay back your debts over a three to five year period of time. It will include all your back house payments you've missed and your mortgage company cannot foreclose on your property as long as you are complying with the terms of your court-approved plan. If you're buying a car, you will pay for that through the plan as well. Credit card debts and back taxes also go into the plan, and in many cases, are greatly reduced or even eliminated entirely. There is the potential for saving a huge amount of money by filing under Chapter 13. TOP ^

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• Will I ever be able to get credit again? Or buy a house?


Most people are able to get credit cards after going through bankruptcy, whether they want to or not. There are many lenders who are willing to work with you after bankruptcy, although bear in mind the interest rates will be higher, especially during the first two years following your bankruptcy discharge. Yes, you can buy a house. Please see my section on Real Estate Financing for further information. TOP ^

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• I'm married. Does my spouse have to file?

Not necessarily. A lot depends on whether the debt you are trying to discharge is owed by both of you. California is a community property state and things can get a little sticky in this area. If the debt is truly separate debt, it shouldn't be a problem. If it is marital debt and your spouse isn't working and there isn't any community property at risk, then talk to an experienced bankruptcy attorney about the possibility of filing the case without your spouse. TOP ^

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• Can I discharge taxes? Student loans?

Taxes? Sometimes. It depends on the tax year and a myriad of other things. And even if the taxes in question cannot be discharged in a Chapter 7, there are often extremely attractive possibilities available in a Chapter 13 which can save you a lot of money.

Student loans? Not any more, not that it was ever that easy. But if you are at the point where your paycheck is being garnished for student loans and you've found it impossible to work out a deal with them that you can live with, a Chapter 13 might give you some temporary relief. TOP ^

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• How can I get a consultation?

You can either call or e-mail me and we will set it up. I'll do everything I can to make this process as easy on you as possible. I am confident you will feel better after we talk about your situation and look at the available solutions. TOP ^

Estate Planning

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• What happens if I don't have a will when I die?

If you die without a will, you have died intestate. Your assets will go through probate, an expensive, intrusive and public process, so that legal title to your assets can be transferred to your heirs at law. Just who gets what and how much are decisions defined by applicable state statutes. The rules of intestacy are very complicated, and may or may not result in a distribution you might presently have in mind. TOP ^

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• Why would I want a living trust instead of a will?


A will only takes effect upon your death and must go through probate. A living trust allows you to maintain control over your assets during your lifetime and after you die. For instance, if you have a will and you become incapacitated during your lifetime, the will does not provide protection for you. The court can step in and take control of your assets. That can't happen if those same assets had been transferred to a living trust. And when you die, the property bypasses the probate process and instead goes directly to the person or people you have chosen to receive it. Depending on your circumstances, it might also reduce or eliminate estate taxes (a separate issue from probate expenses). Be aware, though, estate taxes do not come into play in 2004 unless the estate is worth more than $1.5 million. TOP ^

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• Why avoid probate?

It's expensive, intrusive and lengthy. There are fees and costs that get paid before assets are fully distributed. Probate is a public process. It determines length, cost and availability of information to the public. Assets cannot be distributed or sold absent approval by the court and/or the executor. If your family needs a living allowance, a request must be made and it might be denied. And there is the possibility of challenges being made to the estate plan by an unhappy person or persons left out of the will. TOP ^

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• What if I put my assets in a living trust and then change my mind?


A living trust is revocable. The assets are still under your complete control. You can do the same things with them that you could before you set up your living trust because it is a revocable trust. TOP ^

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• What's the first step?

If you call me or e-mail me we can set up an appointment to discuss your concerns. I will send you a financial organizer to fill out prior to our meeting. This form will help you to start thinking about what you have and what you want to do. It also helps you to think of questions to ask at our first meeting. TOP ^

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• What is an estate tax?

An estate tax is a federal tax levied on your estate when you die. If there is going to be estate tax owed, the accounting must be completed within six months of death, and any payment due must be made within three months thereafter. The Economic Growth and Tax Relief Reconciliation Act of 2001 purportedly phases out the federal estate tax over the next few years until 2010 when it repeals it entirely, and then reinstates it at 55 percent in 2011. What we will eventually have at that point isn't clear. The following table summarizes the Act from 2001 so you have a basis for comparison:

OF 2001 –

Estate Tax & GSTT Exemption

  Year   Exclusion   Top Rate

   2001      $675K          55%  

   2002      $1.0M          50%  

   2003      $1.0M          49%  

   2004      $1.5M          48%  

   2005      $1.5M          47%  

   2006      $2.0M          46%  

   2007      $2.0M          45%  

   2008      $2.0M          45%  

   2009      $3.5M          45%  

   2010       N/A-Repealed

  2011      Reinstated at 55%


Real Estate Financing

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• Can I really buy a house after bankruptcy?


Yes, depending on what your circumstances look like aside from the bankruptcy. And the sooner you try to buy a house, the higher the interest rate. But take heart. Two years after your bankruptcy discharge, all of that can change. So even if you do decide to purchase soon after the bankruptcy discharge at a higher rate, refinancing two years later is a realistic and responsible plan. TOP ^

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• I have a house but I'm in Chapter 13 already. Can I refinance?

This is a frequent scenario and whether or not it makes good sense depends a lot on what kind of debt you're paying back through your Chapter 13 Plan and how long you've been in your Plan. The quick answer is yes, assuming all else looks good (like loan to value, steady income, etc). But be certain to contact your attorney before starting the process so you can find out how it will affect what you're trying to accomplish in your Chapter 13 Plan, and whether or not you need to get permission from the bankruptcy court. TOP ^

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• I've been turned down by lenders already. How can you help me?


Different lenders want to work with different segments of the home-buying population. Some will only lend to people with stellar credit. Others recognize that there is a large number of people who haven't been as lucky but are still good credit risks, especially when it comes to owning a house! I have an excellent working relationship with a number of lenders who offer loan programs that address bank turn-downs, bankruptcies, foreclosures, self-employment, and stated-income loans. TOP ^

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• What if I'm in foreclosure already? Can I still refinance or sell my house?

Up until the point your house is actually sold at a foreclosure sale, you have options. The best one is going to depend on a lot of things, such as, how soon the foreclosure sale is scheduled, what your loan to value ratio is, what kind of income you have, how determined you are to keep the house or whether you would just as soon sell it. Once these questions are addressed, then we can decide if it's best for you to file a Chapter 13 plan and get current on the back payments that way, or whether we should start the refi or sales process right away in order to get everything wrapped up before the foreclosure sale date. It can be an extremely difficult decision, especially if you have a strong emotional tie to the house. That's a normal reaction, and unfortunately the fear people have of losing something they care about that much is the very thing that can stand in the way of their doing something about it. I try hard to help my clients make practical decisions while at the same time fight to keep what is important to them. TOP ^

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• What do I have to do to get started?

Call my office at 415.495.2224 or 510.893.0700 to do an initial credit application over the telephone. TOP ^

The Law Offices of Morris & Woerner, P.C.
Stephanie Morris and Dean Woerner, Attorneys at Law
1627 Twentieth Street
San Francisco, CA 94107
415.550.8799 (Phone)
415.970.1598 (Fax)
415.948.9039 (Mobile)


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