There are quite a few courthouses in Sacramento. But where is the Bankruptcy Court Sacramento? Read on to find out more.

Bankruptcy is Federal Law

Most people do not realize that bankruptcy is a federal legal proceeding. In fact, this means that federal law governs all bankruptcy cases. This is the reason that you will not find any bankruptcy courtrooms in a state courthouse.

This is not to say that state law does not come into play in a bankruptcy case. State laws come up all of the time in bankruptcies. However, at the end of the day, federal law prevails.

The bankruptcy code authorizes only federal judges to hear bankruptcy matters. Because of this, the judge assigned to each bankruptcy case is a federal, not state, judge.

Bankruptcy Court Sacramento

The Eastern District of California is the federal judicial district that covers the Sacramento area. In fact, Sacramento, Redding, Modesto, and Fresno all house bankruptcy courthouses.

The address for the Sacramento Bankruptcy Court is 501 I Street, Sacramento, CA 95814. The building is called the Robert T. Matsui United States Courthouse. Congress named the building after Robert T. Matsui, a Congressman that represented the Sacramento area in Congress for many years.

Parts of the Bankruptcy Court

The bankruptcy court has spread its functions throughout several floors of the Matsui building. For this reason, you will want to take time to learn where to go in the courthouse.

Bankruptcy Courtrooms. There are five bankruptcy courtrooms at the Sacramento bankruptcy court. You can find the courtrooms on the sixth and seventh floors.

Hearing Rooms for Meetings of Creditors. You can find the hearing rooms for Meetings of Creditors on the seventh floor. This is where most people interact with a bankruptcy trustee in a typical case.

Clerk’s Office. The third floor is the home of the clerk’s office. Here, you can pay your filing fee or obtain copies of documents.

Pro Se Help Desk. The pro se help desk is located on the third floor, adjacent to the clerk’s office.

What happens when a mortgage lender violates the Automatic Stay in the Eastern District of California? Just ask Bank of America. In a recent ruling, Judge Christopher Klein awarded over $46 million in damages against the bank.

The Automatic Stay

The automatic stay is one of the cornerstones of bankruptcy law. The automatic stay protects bankruptcy filers from collection activity during the pendency of their bankruptcy.

The purpose of the automatic stay is to allow bankruptcy filers some breathing room to sort through their financial issues. The stay also prevents creditors from rushing to collect the last vestiges of the debtor’s assets.

Violating the automatic stay can result in a finding of contempt of court. Courts have the power to award damages against the stay violator.

Sundquist v. Bank of America

Judge Klein’s ruling is 107 pages long. The brief summary is this: Bank of America foreclosed on the Sundquist’s home despite having actual knowledge of their bankruptcy filing. This unlawful act triggered years of consequences for the Sundquists.

There was already bad blood between the Sundquists and Bank of America. As a couple caught up in the Great Recession, the debtors had to fight with Bank of America for years to try to obtain a mortgage modification. Uniquely in this case, Mrs. Sundquist kept a contemporaneous journal of her struggle. This evidence would prove to be very powerful at trial.

In his ruling, Judge Klein eviscerates Bank of America for their treatment of the debtors. In fact, it was very clear that the bank had ample notice of the automatic stay, and repeatedly acted to violate the stay.

Over $46 Million in Damages

Judge Klein awarded over $46 million in damages to the debtors. Judge Kelin intends that the eye-popping fine sends a message to Bank of America. In fact, Judge Klein wrote that the large amount would not “be laughed off in the boardroom as petty cash or ‘chump change’.”

California’s public law schools and consumer advocacy groups will benefit from $40 million of the punitive damages.

The Sundquists, for their trouble, are set to receive over $1 million in actual damages and $5 million in punitive damages.

Violations of the Automatic Stay in Bankruptcy are very serious. If you believe that a creditor has violated the stay in your bankruptcy, please call my office at (916) 333-2222.

Did you know that there is a special place in Sacramento where you can get free bankruptcy assistance?  The Bankruptcy Help Desk is available to unrepresented debtors and creditors with bankruptcy questions.

Where is the Bankruptcy Help Desk?

You can find the bankruptcy help desk at the United States Bankruptcy Court in Sacramento. The address of the court is 501 I Street. To find the help desk, go up to the third floor. The help desk is right next to the clerk’s office.

When is the Bankruptcy Help Desk open?

The program runs from 9 am to 12 pm each and every Friday (with the exception of holidays).

Some days are busy, and some days are not busy. It is best to arrive early to ensure that someone can see you.

Who runs the Bankruptcy Help Desk?

The United States Trustee’s Office in conjunction with the Bankruptcy Court’s clerk’s office created the bankruptcy help desk.

Volunteer attorneys and laws students from McGeorge (a law school in Sacramento) volunteer their time to answer questions at the help desk. The attorneys that volunteer at the help desk all have significant experience with bankruptcy matters. Student volunteers are all taking bankruptcy coursework.

Who can use the Bankruptcy Help Desk?

Anyone! In fact, people that go to the help desk most often have filed their own bankruptcy without the assistance of an attorney.

Unrepresented creditors in bankruptcy cases can also come to the help desk.

Occasionally a person comes to the help desk that completed a bankruptcy many years ago. These people might be asking questions regarding how their bankruptcy affected a certain debt, or simply need some paperwork to be located.

What type of help is available at the Bankruptcy Help Desk?

Volunteers at the help desk are available to answer general questions about bankruptcy forms, procedures, and provide general advice. However, attorneys aren’t allowed to provide specific legal advice. This is because the attorneys do not formally represent help desk customers.

Volunteer attorneys review filings, including a bankruptcy petition, before the debtor files the paperwork at the clerk’s office. However, volunteer attorneys cannot complete the bankruptcy petition for you.

When serious issues arise, the volunteer attorneys will generally recommend that the patron obtain the services of an attorney.

Thinking about filing bankruptcy? Please call my office at (916) 333-2222 to schedule a bankruptcy consultation at my office in Sacramento.

Sacramento Bankruptcy Lawyer Rick MorinBankruptcy courts are somewhat unique. The bankruptcy courts utilize the same set of identical forms nationwide. These forms are called the “bankruptcy petition and schedules.” The forms are very user-friendly. Bankruptcy motions are a complete separate story. Read on to learn more about motion practice in the bankruptcy courts.

What is a Bankruptcy Motion?

A “motion” is the legal term for a request. If a debtor, creditor, or other party wants the bankruptcy court to take specific action, a motion needs to be filed.

A motion lays out the specific facts and legal arguments that support the request being made by the “moving party.” Bankruptcy motions can be simple and brief, or they can be unusual and lengthy.

The bedrock foundation of our judicial system is that the a court cannot take action without notice and an opportunity to be heard. Motion paperwork takes care of both aspects by providing notice to all parties about the legal request and information about the hearing itself.

Bankruptcy courts have enormous power to order relief. Because of this power, the courts require parties filing motions to strenuously follow procedural and legal rules. Failing to file to right paperwork will result in the denial of a motion.

Typical Bankruptcy Motions

Common motions filed in bankruptcy cases include:

  1. Motion for Relief from Automatic Stay
  2. Motion to Compel Abandonment of Property
  3. Motion to Confirm Chapter 13 Plan
  4. Motion to Confirm Amended Chapter 13 Plan
  5. Motion for Sanctions for Violation of the Automatic Stay
  6. Motion for Sanctions for Violation of the Discharge Injunction
  7. Motion to Convert to Chapter 7
  8. Motion to Convert to Chapter 13
  9. Motion to Value Collateral
  10. Motion for Substitution of Attorney

Bankruptcy Motion Forms

Great. You have to file a motion in a bankruptcy case. Why can’t you find the forms on the bankruptcy court’s website?

Here is the bad news: at least here in the Eastern District of California, there are no standardized “form” motions. As such, if you need to file a motion in the bankruptcy court, you are on your own.

Each legal request is unique. This is why the bankruptcy court does not publish standardized form motions. It would be very difficult to craft forms that would provide adequate legal and factual support for every possible situation. To give you an idea of the complexity involved in drafting a motion, a typical motion consists of:

  1. Notice of Court Hearing
  2. Motion
  3. Declaration(s)
  4. Exhibit(s)
  5. Proof of Service

Each one of these documents has specific requirements. Failing to prepare each document correctly can be fatal to the motion. Careful planning, research, timing, and drafting is required to succeed in the bankruptcy court.

Bankruptcy litigation is very complex. I strongly recommend that you retain an attorney if you need to file a motion in bankruptcy. Please call my office at (916) 333-2222 to schedule a consultation. 

Sacramento Bankruptcy Lawyer Rick MorinNot everybody knows that a significant amount of litigation occurs in the bankruptcy courts in Sacramento. I represent both debtors and creditors in these “adversary proceedings.” Have you been sued by Sheri Carello? Below is some important information for you to consider.

Why am I Being Sued by Sheri Carello?

Sheri Carello is a Chapter 7 bankruptcy trustee in Sacramento. The bankruptcy court assigns her to oversee Chapter 7 cases on a random basis.

Ms. Carello represents the interests of the creditors in bankruptcy cases. She can take legal action against individuals and entities when she believes that she can recover money or property for the benefit of creditors in a bankruptcy.

While it might appear that Ms. Carello is suing you under her own name, she actually is suing on behalf of the bankruptcy estate to which she has been assigned. If you are sued by Ms. Carello, it is important to note that it is not personal. She is just doing her job and following the bankruptcy rules and laws to maximize the recovery for the creditors.

You Have Limited Time to Respond to the Complaint

An adversary proceeding in the bankruptcy court is started by the filing of a formal complaint. The complaint will be assigned its own independent case number. But the case will be attached to the underlying bankruptcy proceeding.

In the Eastern District of California, a defendant in an adversary complaint has just 30 days from the date the summons is issued to respond to the complaint. This is different than most other court procedures. Usually the defendant has a certain amount of time to respond after the complaint is served. In the bankruptcy court, the clock starts ticking once the summons is issued by the court itself.

Bankruptcy procedures are usually more streamlined than procedures in other courts. This is why there is a tighter deadline for a defendant to respond. In any event, don’t miss your 30 day window. Failing to respond to the complaint will mean that the defendant automatically loses the adversary.

Bankruptcy Litigation is Very Similar to District Court Litigation

Some people incorrectly assume that an adversary proceeding in the bankruptcy court isn’t very important. This could not be further from the truth. Both the federal rules of evidence and federal rules of civil procedure apply. In some cases, these rules are modified by the bankruptcy rules. For the most part, any federal litigator will feel right at home in the bankruptcy court.

In most cases, the bankruptcy courts can try matters to a final resolution, issue judgements, and can even sanction parties.

Have you been sued in a Bankruptcy Court adversary proceeding? Call my office at (916) 333-2222 to discuss your legal options. Don’t delay. 

Sacramento Bankruptcy Lawyer Rick MorinA Bankruptcy Trustee is appointed in each Chapter 7 and Chapter 13 bankruptcy case here in Sacramento. Read on for more information about who these people are and the job they do.

Sacramento Chapter 7 Bankruptcy Trustees

At the start of a Chapter 7 bankruptcy in Sacramento, the court automatically assigns a Trustee. The Trustee is picked from a list that the United States Trustee maintains. Each assignment is random. You never know which Trustee will be picked for a case.

Chapter 7 Trustees are there to administer the bankruptcy case. This means that they review the court paperwork, conduct a Meeting of Creditors, and collect property (if appropriate) from the debtor.

Your creditors can object to the appointment of the Chapter 7 Trustee. Your creditors can also elect their own trustee. However, this is very rare in a typical consumer bankruptcy in Sacramento.

Most consumer bankruptcy cases do not require the Trustee to collect assets. In these no-asset cases, the Trustee completes their administration of the bankruptcy case within a few months. Most Chapter 7 cases last between 90 and 120 days.

Sacramento Chapter 13 Bankruptcy Trustees

The job of Chapter 13 Trustees in Sacramento is much different. And there are only two Chapter 13 Trustees in Sacramento at this time.

Chapter 13 Trustees oversee your entire Chapter 13 case from start to finish. Most Chapter 13 cases last anywhere from three to five years. This means that a Chapter 13 Trustee is doing a lot more work than a Chapter 7 Trustee.

Chapter 13 Trustees collect your monthly Chapter 13 payment. They are required to distribute your money to your creditors in accordance with your Chapter 13 plan.

If you fall behind on your Chapter 13 payments, the Trustee will notify the bankruptcy court. The Trustee can ask the court to dismiss your bankruptcy case if you do not keep up with your payments.

My law firm helps people in the Sacramento area get help with their finances. We handle both Chapter 7 and Chapter 13 cases. Please call us at (916) 333-2222 to discuss whether bankruptcy is right for you. 

Uber Bankruptcy Sacramento

The number of people driving for Uber and Lyft these days is increasing rapidly. I have noticed many bankruptcy filers in my office reporting that they are working, at least part time, for Uber and Lyft. What does this have to do with bankruptcy? Let me tell you!

You Must Disclose All Income in a Chapter 7 Bankruptcy

Failing to disclose a source of income to the bankruptcy court can create some issues. Not everyone considers driving for Uber or Lyft to be a source of income, especially if they are just driving sporadically. However, all sources of income, even minor ones, must be disclosed.

Because there are income limits to Chapter 7 bankruptcy, extra income from Uber or Lyft can create issues. If you’re already close to the Chapter 7 Means Test limits, extra income can push you over the edge and into a Chapter 13 bankruptcy. There are some strategies to deal with this issue, but it is important to disclose all of your income sources to your attorney when you first meet.

Driving for Uber during the middle of your Chapter 7 case can also create some issues. In some cases, the bankruptcy trustee assigned to your case won’t want you running a business during your bankruptcy. This is because the bankruptcy trustee owns your liability during the pendency of your case. If you drive for Uber and file Chapter 7 bankruptcy, your attorney needs to check with your assigned Trustee to determine whether that will be a problem for them.

Extra Income in a Chapter 13 Can Increase Your Monthly Repayment

The goal of a Chapter 13 is to repay at least a portion of your debts over time under the supervision of the bankruptcy court. The court averages your monthly income over the preceding six months to determine what they think you should be able to afford to repay to your creditors.

If you are reporting extra income from Uber or Lyft during this six month look back period, your Chapter 13 payment might have to increase. But not everyone drives for Uber on a regular schedule. If you have sporadic side income from a Uber or Lyft, you should make sure that your attorney understands how often (or not) that you are out there driving.

Details really matter in a Chapter 13 bankruptcy case. You don’t want to be stuck in a Chapter 13 plan that you cannot afford. Make sure you discuss any extra income or side jobs with your attorney before you file your bankruptcy case.

I help consumers and business owners deal with debt and their finances in Sacramento. Please call me at (916) 333-2222 to discuss your bankruptcy options today. 

Sacramento Bankruptcy Lawyer Rick MorinI have received word of a new devious new bankruptcy scam going around. I want to alert all of my clients so that they can avoid being scammed.

One thing that you need to realize is that your bankruptcy petition is 99.99% public record. The only item of information that is not accessible to the general public is your complete social security number. Your name, address, previous addresses, employer and pay history, etc are all viewable by any person with a PACER account. This is giving scammers a lot information they need to try to get money out of you.

The scam goes like this. The scammer “spoofs” your caller ID so that it appears that your attorney’s office is calling you. They typically call after hours and pretend to be staff person in the law firm. I have heard a couple versions of the story, but they are all share one thing in common: the person demands that you immediately go to a Walmart or Western Union and transfer a few hundred dollars.

The scammer’s familiarity with your bankruptcy petition gives them a lot of information to sound credible.

Rest assured, my office would never ask you to run to Walmart in the middle of night to transfer money to a creditor. However, enough people across the country are being scammed this way that it is a hot topic on the bankruptcy attorney forums. I haven’t heard from any of my clients about this scam, but at least one Sacramento attorney reports it happening a client.

My best piece of advice is to remain vigilant during and after your bankruptcy. The unfortunate reality is that there is no shortage of shady criminals out there trying to take money from innocent people.

If you receive a phone call like the one I described above, call my office to confirm. If you’re my client you know me and you know Hilary. If someone else is pretending to call from my office or the court, you should be suspicious! 

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.

Sacramento Bankruptcy Lawyer Rick MorinChapter 13 bankruptcy is a reorganization bankruptcy where the court lets you repay some of your debts over time. Chapter 13 bankruptcy is great for people that do not qualify for Chapter 7 bankruptcy or just need some breathing room to figure out their finances.

Every Chapter 13 case involves a monthly payment by the debtor to the bankruptcy trustee. The trustee then distributes your plan payment to your various creditors in accordance with the instructions provided to the court in your Chapter 13 plan.

A debtor’s first Chapter 13 payment is due on the 25th day of the month following the month in which the bankruptcy was filed. For instance, if you file your Chapter 13 case August 12, your first payment will be due September 25.

Subsequent payments are due on the 25th day of each subsequent month. There is no grace period. The 25th means the 25th. A single missed Chapter 13 payment can put your entire bankruptcy in jeopardy. I always encourage my clients to pay their 13 payments early so there is no chance of a late payment.

The old fashioned way of paying involves sending a cashier’s check or money order each month in the mail. However, the trustees are now set up to accept electronic payments directly from your checking account via a service called TFS.

I like the TFS service because it establishes an audit trail. You don’t get that same level of assurance when you place your certified funds in the mail. Trust me, I have had my fair share of clients call my office in a panic because of a lost or mishandled Chapter 13 payment.

TFS does charge a small fee, but it is often less than the fee associated with obtaining a cashier’s check or money order from your bank. So TFS can help you save money too!

Please remember that the information listed above only applies to Chapter 13 cases assigned to trustees David Cusick and Jan Johnson in Sacramento. You should always check with your attorney and/or trustee to ensure that your Chapter 13 payments are being made on the appropriate schedule.

If you have questions about Chapter 13 bankruptcy in Sacramento, please call me at (916) 333-2222.