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Richard Gaines Heston
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Richard Heston’s Answers

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  • Is the current California bankruptcy car exemption $5100 or $4800?

    The California statute website says it's $4800, but I've also seen $5100 floated around. How come the California statute website seems out of date? How can I find a place that has current authoritative information?

    Richard’s Answer

    Actually, there are two differing amounts, the choice of which depends on whether you will be claiming a homestead exemption to protect equity in your residence. The amount is $5,100 if you do not claim the homestead, or $2,900 if you do claim the homestead. With the homestead in California ranging from a low of $75,000 for single individuals, all the way up to $175,000 for seniors, the disabled, and those persons age 55 or older with low income, clearly it is a potentially valuable exemption, which would take precedent for the homeowner with home equity. If you do not own your home, you would normally want to claim the $5,100 exemption available for a motor vehicle. To see all of the available exemptions, visit the website of the California Courts, at www.courts.ca.gov/documents/ej156.pdf.

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  • I wasmarried in California my husbandand I moved wth our daughter to peruI want to file for divorce, can I filetru the USEmbassy

    my daughter was born in US as well

    Richard’s Answer

    If you have met the requirements to establish legal residency in Peru, you may avail yourself of the laws of Peru to initiate a divorce. If I understand your question, your husband also is living in Peru, providing the courts of Peru with personal jurisdiction over both of you. I would strongly urge you to consult with a Peruvian attorney familiar with family law matters to verify whether you may proceed with a divorce in Peru, where you reside and which I assume would be most convenient and least costly.

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  • How do you calculate value of a home in bankruptcy? Do they include what you have to pay the realtors?

    Trying to determine if we should file bankruptcy

    Richard’s Answer

    The starting point will always be fair market value (FMV), which can be the debtor's own opinion (see California Evidence Code § 813(a)(2), which makes the opinion of the owner of property admissible as evidence), an on-line valuation service of such as Zillow, Redfin, etc., a broker's opinion letter, or a formal appraisal. The FMV should always be disclosed, but when stating the value to the bankruptcy estate, it is entirely appropriate to reflect any costs of liquidation, including broker's commissions, escrow costs, etc., as well as possible tax consequences, i.e., capital gains, and the Chapter 7 trustee's fees to demonstrate the actual equity available for the homestead exemption and any potential non-exempt equity available to the estate for payment of creditor claims.

    However, the purpose of the opinion as to value needs to be taken into account. If liquidation is not a factor, then costs of sale cannot be considered. So, if the valuation is for purposes of determining whether a judgment lien against the property can be avoided due to its interfering with (impairing) the debtor's right to a homestead exemption, hypothetical costs of sale cannot be factored in.

    As with my colleagues, whenever possible in this potentially complex area of the law, seeking the advice of a qualified bankruptcy counsel, preferably one who is certified as a specialist in the field, is always preferable.

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  • Is my worker's compensation benefit protected in chapter 7?

    I put my WC benefit payment in an annuity account. Is it still protected in chapter 7.

    Richard’s Answer

    Payable workers' compensation benefits may be claimed as exempt without dollar limitation under CCP § 703.140(b)(10)(C) or CCP § 704.160. There is no "reasonable necessity" requirement. However, if funds which have been placed in an annuity account are derived from exempt workers' compensation benefits, they may be claimed as exempt if you file a Chapter 7 bankruptcy, but only to the extent those funds can be traced to deposit accounts or they are in the form of cash or its equivalent, e.g., cashier's checks, certified checks, money orders. The right to trace funds back to an exempt source is provided in CCP § 703.080(a), but CCP § 703.080(b) imposes on you the burden of tracing the exempt funds. You should consult an attorney or accountant to make certain you can meet that burden and trace the compensation benefits held in the annuity account.

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  • I just filed chapter 13, and included my car, can the lien holder hold my car until I show proof of insurance ?

    chapter 13 filed. Paying the car loan back in 5 years. No car insurance.

    Richard’s Answer

    The information you provided is somewhat unclear, but it appears that the lender was holding the car at the time you filed Chapter 13 based upon the lender's right to take possession of the collateral securing its loan due to your failure to ensure the collateral.

    The automatic stay bars enforcement of claims against you or property of the estate. Section 101(5) of the Bankruptcy Code defines a claim as being either a right to a payment or a right to a remedy for breach of performance if the breach gives right to a payment. While the car constitutes property of the estate, if it's seizure was not due to your failure to make payments, but rather your failure to provide insurance, or even both, the lender's refusal to return the car for lack of insurance does not appear to be an act taken to enforce a claim.

    The lender has the right to insure the car and add the cost of the policy to the balance owed. Such insurance coverage will only cover the car for comprehensive and collision damage, providing you with no liability coverage. It is not legal to drive a car without liability insurance, and you can probably obtain comprehensive and collision coverage for considerably less. It would appear that the sensible approach would be to obtain insurance, demand the return of the vehicle, and addressed payment of the claim of the lender through the plan.

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  • Can I file an adversary proceeding to get my student loans discharged in bankruptcy, or do I need a lawyer to help me do this?

    I am married, but I want to file individual bankruptcy to get my student loans discharged, due to undue hardship. I don't have much money to pay a lawyer, so I wanted to find out if I could do this on my own. I am a 61 year old woman, and I went...

    Richard’s Answer

    While I concur with the other answers that litigating the dischargeability of a student loan is a daunting task, one requiring the skills of a trained attorney, you may have other options. Given your current employment situation and age, i.e., nearing retirement, the prospects of being able to fulfill the obligations of the loan agreement are questionable. Trust me, I've seen similar situations. Seeking a discharge in bankruptcy is an option, but not necessarily the only way to address the issue.

    You may wish to consider one of the income-based repayment options that allow you to have the payment vary, based upon your income, often with no payment required until your income exceeds a fixed threshold and then graduated as income fluctuates.

    There are basically three types of plans: the Income-Based Repayment Plan (IBR Plan), the Pay As You Earn Repayment Plan, and the Income-Contingent Repayment Plan (ICR Plan), all three of which may help you bring the payment down to within your budget. You can learn more about these various repayment plans by visiting the informational website located at https://studentaid.ed.gov/repay-loans/understand/plans/income-drive

    If, after you investigate your eligibility, you learn that you will not be able to qualify for one of the income-based options, you may actually have a better shot at obtaining a discharge in bankruptcy, as you will shown that you cannot qualify for any repayment plan due to lack of income. This tip is based on an actual case.

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  • What is the best way to demand the promissory note from a federal student loan debt collection agency ?

    Bill received from a federal loan debt collection agency. Loan is in my name, but I did not take out the loan, nor do I believe I cosigned any such loan - based on the time periods the loan was issued. Wish to obtain promissory note(s) before di...

    Richard’s Answer

    Since the loan servicer would be compelled to produce a copy of the note with your signature in the event of a proceeding to enforce it, you should be able to convince the servicer to provide you with a copy, especially if you make them aware that your signature may have been forged or obtained fraudulently. Depending on whether the servicer provides a copy of the note or instead seeks to enforce the obligation in court, either way you have the right to have the signature analyzed. Such expert examiners can usually compare examples of your handwriting from the same time period (our signatures tend to change over time) and confirm whether the signature is authentic or forged. Typically, such experts advertise in legal publications as handwriting experts or questioned document examiners.

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  • My divorce will be final in March of 2014 in CA. In the original Marital Settlement Agreement we called out to alternate

    the exemption of our two kids, odd years for me and even years for my spouse. I found out it is better tax wise to have each of us claim one kid every year instead. Both of us agree to change the terms; can both of us sign a separate written agree...

    Richard’s Answer

    • Selected as best answer

    While a written stipulation between you and your former spouse to modify the agreement to permit you to each claim one child as an exemption each year is highly advisable, a court order is not necessarily required. Instead, you may wish to download from the Internet IRS Form 8332, entitled "Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent", with each of you executing one such form with regard to one of your two children, so you may each claim one child. Except with regard to judgments entered prior to 2008, the use of this form is required by the IRS whenever a parent who might otherwise be entitled to claim a child as an exemption has agreed to instead release that right to the other parent. If you and your former spouse have a written stipulation to each release a claim to one, then the IRS form is required in any event, and may simplify matters and eliminate the time and expense of having to prepare an order for the modification of the original judgment. Assuming you do not have twins, have you agreed to alternate the younger child as an exemption when the older child reaches an age when he or she can no longer be claimed as an exemption? You should address that issue as well in your agreement.

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  • Lobel Financial recently started to garnish my wages for a car they repossessed 19 yrs ago!!! Single mom, only income!!!!!

    Lobel Financial repossessed my car in Oct, 1995. They filed a lawsuit on April 1996. I never was served any notification of a lawsuit against me. They refiled the claim in April 2005. After 9 years later, they are now garnishing my wages. I calle...

    Richard’s Answer

    Because the car was repossessed in 1995, a lawsuit filed in 1996 was timely and within the 4-year statute of limitations. The issue then became whether or not you were properly served. You indicated that the address on file at Lobel Financial has been invalid for 19 years, which would take you back to 1995. If you were not properly served, you may have a basis to move to set aside the judgment so that you can offer a defense to the deficiency claim after the car was repossessed.

    You also mentioned that Lobel Financial refiled the claim in April 2005, suggesting that the judgment obtained was renewed before the 10 year deadline, as it would otherwise have lapsed. You have not indicated how you learned of the renewal, but given the passage of almost 20 years, should you file a motion to vacate the judgment, you would likely be asked why you did not take such a step in 2005 when you learned the judgment had been renewed. If you have known of the existence of the judgment for nine years or longer, the court may deny a request to set aside the judgment based on a doctrine known as "laches", for failure to act more promptly.

    In any event, while you may have a procedural defense that requires the judgment be set aside, do you have a substantive defense to the claim for the deficiency after the sale of the car? In other words, did you pay the deficiency or was it not a valid claim? If not, the court may still entered judgment against you for the unpaid deficiency after a trial. Without knowing if you have other claims, you may wish to consider discharging the debt in bankruptcy.

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  • Psychiatric care and a debtors exam

    A friend of mine is under psychiatric care and taking medicines for severe anxiety. He has received a subpoena for a judgment debtor's exam and I really think he will flip out, plus the pills he has to take make him really drowsy. He can't afford ...

    Richard’s Answer

    The key is that your friend has been "ordered" to appear. As an order is made by a judge, absent cooperation from the judgment creditor's attorney, only a judge can modify or vacate the order to appear. Normally, I would recommend your friend seek a "protective order", limiting or even barring the examination until the psychiatric condition improves. But since your friend lacks the resources and know-how to pursue such a protective order, he would be well advised to appear, bring a letter or affidavit from his psychiatrist, and ask that the court only permit the examination under conditions that will alleviate the stress and anxiety. Even if not compassionate, the attorney for the judgment creditor may well realize that testimony given by someone under psychiatric care may not be reliable or admissible. Perhaps he or she will agree to conduct the examination on a later date, except documents in a lieu of the examination, or at least consider conditions that would be less stressful, i.e., examination conducted with a friend present in the coffee shop of the courthouse, etc.

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