Are you still banking at Wells Fargo? Why? Let’s sit down and talk about it.

Wells Fargo Has Trouble

Ever since the financial crisis in 2008, banks have come under scrutiny by the government, press, and even their own customers. As one of the largest banks in the country, Wells Fargo has faced its fair share of scrutiny. And yet nothing seems to change.

If you haven’t been reading the news recently, Wells Fargo was forced to pay a $185 million fine for opening over 5 million accounts without customer permission. Why would they do that?

Wells Fargo was opening these unauthorized accounts to inflate their sales numbers. The accounts also incurred fees. These fees added to the bank’s bottom line and helped show investors that the bank was growing.

People Are Starting to Pay Attention

While a $185 million fine is a lot of money, it is nothing compared to Wells Fargo’s annual revenue — nearly $100 billion per year. The $185 million fine amounts to just just pennies on the dollar. Where is the incentive for Wells Fargo not to continue with similar shenanigans in the future?

Several state governments, including California, have announced that they are temporarily severing ties with Wells Fargo. State governments have banking needs too. California announced a one-year ban on dealings with Wells Fargo. The bank responded by stating that government contracts are not a significant source of income. In other words, “yawn.”

There Are Great Alternatives

A large bank with branches nationwide used to be a big convenience. With most banking occurring online, working with a huge bank isn’t the big draw that it used to be.

I personally belong to several credit unions for my personal banking needs. Many credit unions belong to a co-op that allow credit union members access to branches and ATM machines of competing credit unions nationwide. With mobile deposit, direct deposit for wages, and online statements, how often do you really need to visit a physical bank?

Credit unions, as a general rule, are not designed to screw their customers. This is because each credit union member actually owns a part of the credit union. Fees and interest rates are more favorable. And credit union deposits are insured in manner similar to that of the FDIC.

Don’t forget that there are numerous alternatives to huge banks. Ask around and you will find that there are far better places to store your money and the typical large banks you see on television. 

Sacramento Bankruptcy Lawyer Rick MorinDebt collection lawsuits in Sacramento are common. These lawsuits can be very unsettling. The consequences of a debt collection lawsuit can be enormous. Don’t worry, there are options.

Don’t Ignore a Debt Collection Lawsuit

The first mistake people make when they discover a debt collection lawsuit is to panic. Worse yet, many folks decide to ignore the lawsuit. This is the worst thing that you can do. The lawsuit is not going to go away on its own.

Collection Lawsuits Have Consequences

Debts taken to court are a very serious matter. The creditor is asking the court to issue a “judgement.” A judgement is a legal declaration that you actually owe the debt. With a judgement, a creditor can really make a mess of your finances.

Judgement creditors can garnish wages, levy bank accounts, and put liens on property. Many people mistakenly believe that a judgement creditor must first warn them before garnishing wages. This is not true! The legal judgement takes the borrower out of the equation. A creditor can take collection activity on their own (as long as they follow the law).

The bottom line is this: judgements are not good. You should avoid judgements at all costs.

You Have Options

As a bankruptcy attorney, I can tell you that you have several options if you are being sued by a creditor. One option is bankruptcy. Bankruptcy will stop your collection lawsuit and get rid of other debts. Bankruptcy can be the easiest and most cost-effective method of stopping creditor lawsuits. There are other options too.

Depending on the nature of the lawsuit, some people decide to defend the lawsuit. The debt may be too old to legally collect. The account may have been transferred among several creditors without the right documentation. Or maybe the creditor is not calculating fees and interest the right way.

I offer my litigation services to folks facing collection lawsuits. However, it typically only makes sense to hire an attorney if the amount of the debt is substantial, or if there are obvious legal deficiencies in the lawsuit.

If you are facing a debt collection lawsuit in Sacramento, please call my law firm at (916) 333-2222. We can help you discuss your options during a comprehensive legal consultation. 

Sacramento Bankruptcy Lawyer Rick MorinI am often asked for advice on how to rebuild credit after bankruptcy. There are no real secrets or shortcuts involved. But I can tell you one thing will make the biggest impact on your credit score after bankruptcy.

Paying on Time is the Key

Of all the factors that go into a credit score, timely payments will give you the largest boost. Potential creditors want to know that you can handle the debt that you already have before granting you new credit. If you can’t pay your existing accounts on time, why would you treat the new creditor any differently?

Even One Late-Pay Can Hurt

Credit scores are cumulative. What this means is that they are not just a snapshot in time. Rather, credit scores are computed by looking at many years worth of information. The better you do over time, the better your credit score will be over time.

Nonetheless, even one late payment can really impact your credit score. Late payments can mean that the borrower is careless, or worse yet, in financial distress. Because a potential lender doesn’t know where on that continuum you land, they will likely assume the worst and think that you are financial distress if they see late payments. And nobody wants to lend money to someone that is in financial distress.

On-Time Minimum Payments are Better Than no Payments

If you cannot afford to pay off your account in full each month, making even the minimum payment is better than no payments at all. On time minimum payments each month will actually boost your credit score. Whatever you do, pay at least the minimum payment on time each month. Your credit score will start going up in no time!

Slow and Steady Wins the Race

The more effort you put into maintaining good credit practices, the better your credit score will be in the end. Don’t be fooled into thinking that there are shortcuts or secrets involved. Every part of a credit score is public knowledge and easily found on the internet. Put in good effort, and your credit score will reflect your suitability to borrow money.

I provide advice to my bankrutpcy clients regarding rebuilding their credit after bankruptcy. If you are thinking about filing for Chapter 7 or Chapter 13 bankruptcy, please contact me at (916) 333-2222.

Sacramento Bankruptcy Lawyer Rick MorinYou may have heard that Donald Trump is running for President. You may have heard that he has filed a few bankruptcies in the past. What does any of this have to with my bankruptcy law practice in Sacramento? Let me tell you.

Donald Trump Isn’t Afraid of his Bankruptcies

I will withhold my general thoughts on Trump here, but I will tell you that the man owns his prior bankruptcies. When questioned on the campaign trail, Trump bluntly tells reporters that his bankruptcy filings were decisions made with the best interests of his businesses in mind.

You see, trump doesn’t just acknowledge his prior bankruptcy filings. Rather, he celebrates them. Trump claims that the bankruptcy code allowed his various business interests to cut deals and emerge even stronger. This kind of bravado isn’t typically associated with the bankruptcy process.

Regular Folks Shouldn’t be Afraid of Bankruptcy Either

If Trump can file multiple bankruptcies in order to protect his business interests, why do regular people have such a hard time accepting bankruptcy? There obviously is a disconnect there.

Bankruptcy is an important tool that allows people to get a fresh start with their finances. It is by no means an easy decision to make. I try to advise my clients to take the emotion and fear out of the decision process. Instead, focus on objective things such as debt/income ratio, whether there is a realistic way out of debt, and the benefits of a fresh start.

These laws are in place to help innocent, but unfortunate people get a handle on their financial issues. If bankruptcy were so bad, Congress would outlaw it.

If you have thought about bankruptcy before, don’t delay any longer. Contact my office at (916) 333-2222 to discuss what bankruptcy can do for you. 

Sacramento Bankruptcy Lawyer Rick MorinMany of my bankruptcy clients were at some point sued by a credit card company. These lawsuits often go unanswered and result in large judgements. Judgements then turn into wage garnishments. Here are a few interesting facts about Credit Card Lawsuits in Sacramento.

1. You Don’t Need to be Personally Served

People tend to move around. Credit card companies know this. When they go to serve you with a collection lawsuit, they aren’t required to go to the ends of the earth to find you.

Generally, you must be personally served with a lawsuit. However, there are certain rules that allow a lawsuit to move forward despite non-service of the plaintiff. This is why “ducking” service is not always effective.

If you later discover that you were sued and never received a copy of the summons and complaint, there still might be time to unwind the judgement. This process is not easy and it can be expensive. Given the amount of the judgement against you, it may make sense to try to set aside the default. Definitely talk to a lawyer.

2. Judgements are Negotiable!

I like to say that everything in life is negotiable. This is even true of a judgement. Credit card companies and their collection agents will try to tell you that they will not negotiate on a judgement. This is absolutely not true.

If bankruptcy is not a good option for you, try to negotiate the judgement down. Creditors are receptive to offfers, especially if you can make a lump-sum offer to pay off the account.

If you do reach an agreement with a creditor, ensure that you get it in writing. Some unscrupulous collectors will bait you into paying less than full value, and then turn around and ask for more. If you need help making sure your offer is binding, contact an attorney.

2. Judgements Last Forever

A money judgement in California is good for ten years. Judgements also accrue interest at the statutory rate of 10% per year. At the end of ten years, a judgement creditor can apply to the court to renew the judgement. The renewed judgement will be good for ten years, and so on.

As you can see, judgements just don’t go away on their own. They can literally last forever as long as the creditor takes appropriate action. Don’t just ignore a judgement. Tackle the issue now before it gets worse down the road.

I help people in the Sacramento area resolve judgements and other debt issues. Bankruptcy may be an option for you. Please call my office at (916) 333-2222 to discuss bankruptcy and non-bankruptcy options to resolve your judgements. 

Sacramento Bankruptcy Lawyer Rick MorinWhether to keep or not keep car payments is something that I typically have to address with my bankruptcy clients. There are several options available to bankruptcy filers. This blog post will focus on situations where the debtor wishes to retain the car and payments.

Be Careful After Filing Your Bankruptcy

Certain bankruptcy laws make it illegal for a creditor to attempt to collect a debt against a person in a bankruptcy case. This applies to mortgage companies and car lenders too. This means that a car lender will stop sending you paper statements after you file your bankruptcy case. After all, they aren’t allowed to ask you for money while you are in bankruptcy. If you have automatic payment arrangements made through your lender, they will stop deducting your car payment each month too.

Some bankruptcy filers mistakenly believe that they don’t need to keep making their car payments because they stopped receiving statements. This is not true, especially if you intend to keep the car after bankruptcy.

Keep Your Car, Keep The Payments

If you have decided to keep a car with loan payments after bankruptcy, it is your job to keep making the payments. As I stated above, you won’t receive paper statements while you are in bankruptcy. It is still your responsibility to mail in your payments on time.

If your car lender doesn’t see you making your regular monthly payments, they might assume that you no longer want to keep the car. The lender can go into the bankruptcy court and file a request to repossess the vehicle from you.

As an example, if you don’t make three months of car payments, the lender will get nervous and ask for relief from the court. You will then have to bring your car loan current in order to avoid the court granting the lender the right to repossess your car. If you haven’t saved the car payments, you might find it difficult to bring the account current.

There are many pitfalls for the unwary in bankruptcy proceedings. Please call my office at (916) 333-2222 to discuss how my law firm makes bankruptcy in Sacramento easy.

Sacramento Bankruptcy Lawyer Rick MorinA top question I am asked by clients is how to reestablish credit after bankruptcy. This is a very important topic. Here are my recommendations.

Bankruptcy will stay on your credit report for seven to ten years after filing. This is a long time, but it does not mean that you can’t rebuild your credit during that time. In fact, I advise most people that the most difficult period of time is during the first two years after filing.

Even with bankruptcy on your credit report, you can reestablish a good credit history. I strongly recommend that people begin this process as soon as their bankruptcy case is over. Waiting does not do you any good.

Get A Credit Card

Most of my clients report receiving unsolicited credit card and loan offers in the mail once their bankruptcy cases are discharged. Be wary of these offers. Most will have very high interest and fees.

Part of reestablishing your credit is making good credit decisions. Don’t just take any offer that is thrown your way. Being a savvy consumer will help you stay out of financial trouble in the future.

Secured Credit Cards Are A Great Start

The best way to avoid predatory lenders is go to your current financial institution. Most have products to reestablish or rebuild credit. Be honest with the banker and they will likely have something for you.

In general, a secured credit card through your current bank will probably be the easiest product to get. Because the card is secured by a cash deposit, the fees and interest will likely be reasonable too.

Once You Have A Credit Card, Use It Responsibly

One of the largest factors that go into a credit score is your history of payments. Make sure that you pay your new credit accounts on time each and every month. Even one late-pay can severely impact months and months of good credit history. If you do nothing else, just make sure that you pay your bills on time each month.

You will be surprised how easy it is to increase your credit score after bankruptcy. Make sure to accept only good credit terms, and pay your bills on time.

Please call my office at (916) 333-2222 to discuss how bankruptcy can help you reorganize your finances and get you a fresh start in Sacramento. 

Rebuild Credit After Bankruptcy

It is absolutely possible to rebuild credit after bankruptcy. There are many myths out there about re-establishing your credit score after a bankruptcy. Here are some tips and tricks to get you back on track after bankruptcy.

1. Bankruptcy Doesn’t Mean No Credit

Yes, it is true — bankruptcy will remain on your credit report for 7 to 10 years after your bankruptcy filing. However, this does not mean that you won’t have access to credit for 7 to 10 years. This is the biggest myth that I hear.

Most of my clients report receiving credit card solicitations within months after their bankruptcy case closes. Current federal mortgage guidelines allow bankruptcy filers to obtain FHA-backed mortgages just two years after bankruptcy.

I strongly recommend that my clients take immediate action after their bankruptcy cases are closed to start re-establishing their credit.

2. A Secured Credit Card is a Great Way to Start

Those initial credit card solicitations you receive in the mail after bankruptcy won’t be very good. They often times will have very high interest or outlandish fees. Read the fine print carefully before you take the plunge

A better bet is to contact the financial institution where you already bank. See if they offer a “secured credit card.” Most banks do these days. Capitol One and US Bank also have great secured card products.

3. Re-Affirm your Mortgage or Car Loan 

Here’s a credit product that you might already have: a car loan or mortgage loan. Make sure that you talk to your attorney about re-affirming these loans during your bankruptcy. If you re-affirm a secured loan, your lender will keep reporting your payment history to the credit bureaus even after bankruptcy. If you keep up with these payments, you’ll have a credit account reporting good things to the bureaus on day one after your bankruptcy is over.

4. Pay Your New Accounts on Time

Whatever you do with your new credit products, make sure that you pay them on time! Even a single late pay can wipe out months of hard work. Even if you have to make the minimum payment, just pay it! More than any other factor, late payments tell the world that you aren’t able to manage your obligations responsibly. As you start racking up more and more on-time pays on your credit report, your score will keep going up. I really can’t stress the importance of on-time payments enough!

Ultimately, there’s no secret recipe involved with increasing your credit score after bankruptcy. Responsibly manage your credit accounts and your lenders will see that you are serious about your new financial direction in life — even with a bankruptcy on your record.

Contact my office at (916) 333-2222 to discuss how bankruptcy can get your finances back on track and get you a fresh start in Sacramento!

Sacramento Bankruptcy Lawyer Rick MorinI have been seeing more and more clients with large debts from online loan companies. These loans are proving to be toxic and a fast track to the bankruptcy court.

In a financial jam, a quick infusion of cash might seem like just what the doctor ordered. And in some cases, this is absolutely true. But before accepting a loan, you must first determine whether the terms of the loan are going to cause more pain than they are worth.

Spurred by incessant advertising on TV and the internet, many of bankruptcy clients have at least one unsecured loan through a payday loan company or online lender. These loans carry interest rates in excess of 100% per year. At such a high interest rate, it is nearly impossible for these clients to ever actually repay the loan. I am quite frankly surprised that these abusive loans are even legal — but they are.

The terms of these loans are not the end of the problems either. Most of the loans require the debtor to authorize the lender to automatically withdraw loan payments directly from the debtor’s checking account. In some cases, these payments are scheduled once a week. And because the interest rates on these loans are so high, these payments don’t actually make much of a dent in the principal balance owed to the lender.

Taking out these high-interest loans is typically a desperate move to stay afloat. But no one should have to borrow money on such outrageous terms. Once the online lender starts deducting money each week from a person’s checking account (often putting them negative), the next step is usually a call to my office for bankruptcy.

Bankruptcy can get you a fresh start with your finances. I can get you out of the never-ending cycle of predatory payday and online loans. If you find yourself depending on these toxic financial products to get by, you probably already know that bankruptcy is the real solution to your debt issues.

Please call my office at (916) 333-2222 to discuss what bankruptcy can do for you. You will be surprised by how quickly and easily my office can help rein in your financial issues.

California State Capitol in Sacramento

I have been watching Senate Bill 308 quite closely. The bill would have modernized California’s bankruptcy exemptions to allow debtors additional tools to protect their assets from the reach of creditors. Unfortunately, SB 308 failed to pass this year.

The first half of the 2015-16 California legislative session came to a conclusion on Friday, September 11. All bills headed to the Governor for his signature or veto must have been approved by both the Senate and Assembly by this deadline.

SB 308 started off as a strong effort to modernize California’s bankruptcy exemptions. The bill passed numerous tests, including several committee and floor votes. Along the way, the bill was amended several times to reduce and revise the proposed changes to California exception laws. While SB 308 was not as strong as it was when it began its life in the Senate, the bill still had plenty to offer California bankruptcy filers.

The bill ultimately stalled on the Assembly floor. The bill was generally opposed by Republican legislators and supported by Democrats. Republicans hold such a minority position in the Legislature that their support for the bill wasn’t ultimately needed. So it was a handful of democrats that kept the bill from passing. These democrat legislators didn’t outright vote “NO” on the bill. They instead “took a walk” and did not vote either way. In fact, over 20 legislatures failed to cast a vote on SB 308’s final floor vote in the Assembly.

The bill was strongly opposed by the California Bankers Association and the California Association of Collector. Both groups represent the interests of huge banks and debt collection firms. It is no surprise that they would oppose SB 308.

SB 308 isn’t totally dead. Senator Wieckowski can revive the bill in the second half of the legislative session in 2016. Or he could start fresh with a new proposal altogether. But for now, California exemption laws will remain the same.

If you have questions about Chapter 7 or Chapter 13 bankruptcy, please call my office at (916) 333-2222.