New California Laws for 2008

During the 2007 legislative year, 964 bills were passed by the California legislature and 750 were signed into law. There are 167 changes just to the California Vehicle Code. Except as otherwise noted below, the following list is a sample of just a few of the laws that go into effect in California tomorrow:

• Beginning July 1, 2008, California will prohibit drivers from using wireless telephones without a hands-free device while driving. A separate will law prohibits all drivers under the age of 18 from using a cell phone even with a hands free device. Both laws have exceptions for emergencies.
• Bicycle riders must have some sort of illumination devices while riding on a highway, street or sidewalk at night. The law is not clear if riders will be required to have headlights or if reflectors will be enough. Failure to have to have illumination devices could result in a ticket that requires the rider to attend a bicycle safety class.
• Smoking will not be allowed in any vehicle if minor children are inside. The prohibition applies regardless of whether the vehicle is in traffic or parked. Police will not be able to stop a car just to check for smoking, but then can cite the driver if they pull them over for another reason. Drivers could face fines of up to $100.
• The California minimum wage will increase by 50 cents to $8 per hour. California workers will have one of the highest minimum wages in the country.
• A new law will allow consumers to redeem gifts cards with balances of less than $10 for cash.
• Cities and counties will now be required to designate areas where homeless shelters can be constructed without the requirement to obtain a conditional use permit. The law is designed to remove zoning ordinances that block construction of homeless shelters.
• Courts will now be able to require parents or guardians of gang members to attend parenting classes. The classes are designed to prevent first-time offenders from committing additional crimes.
• Cities and counties will not longer be allowed to require landlords to verify the citizenship of their tenants. This law was a direct result of an attempt by a city in Southern California to require landlord to screen the citizenship status of potential tenants.
  

The information provided in this article is general information only and is not intended as legal advice. DO NOT use this information as a substitute for obtaining qualified legal advice or other professional help.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Do I Really Have to Pay Calfornia's Minimum Corporate Tax?

Question: Suppose I live in California, and I want an LLC in Nevada or Colorado. Is there a way to set it up so that I don't have to pay the idiotic $800 California fee?

Answer: I often hear radio commercials advertising the purported benefits of incorporating in states like Nevada. Before do that, you should consult with legal counsel and a qualified tax advisor before making any decisions. You mentioned forming and LLC, but many small business owners find that forming an S corporation is better for income tax purposes.

Whether you have to pay the minimum California franchise tax depends upon whether you are doing business in California. Even if you form an LLC or corporation in another state, you still have to register and pay the taxes on your California income if are regularly doing business in California. If you have an address, employee, inventory, bank account or significant business contacts in California, you are probably doing business here as defined in the law.

One advantage to forming a new California is that the corporation does not pay the $800 minimum for its first tax year. While it is called a "minimum franchise tax", it is really a minimum income tax payable in the first quarter of each taxable year (except for the first taxable year. By the time your corporation is in it's second taxable year, you will hopefully be making enough money so that you tax bill is higher than just the $800 minimum anyway. New California LLCs do not receive this benefit.

If you are going to incorporate in California and do business primarily in California anyway, there are few reasons not to form a California corporation.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

The Lender Foreclosed, Now What?

Question: My landlord's bank foreclosed on the house I am renting and he didn't tell me. What happens next?

Answer: According to RealtyTrac, a company that tracks foreclosures across the country, nearly 1.8 million foreclosures have been filed nationwide so far this year. Foreclosures in October 2007 were up 94% over the same period last year. Though no firm statistics are available, renters are increasingly left without a place to live through no fault of their own. In many cases, a financially troubled landlord will pocket the rent and stop making the payments while the bank takes back the property.

Once a foreclosure sale takes places, the tenant has no guarantee of a place to live. You should contact the lender or new owner right away to discuss a possible rental agreement. The new owner might want to begin collecting rent right away, but bank-owned properties often are easier to sell when vacant. If you cannot reach an agreement with the bank, begin looking for a new place to live immediately.

If you do not leave voluntarily, California law allows the bank or new owner can serve you with a 30-day Notice to Quit. If you do not leave voluntarily, the bank can file an eviction lawsuit against you. You have no legal right to remain in the property and even the mere filing of an eviction lawsuit against you can damage your credit rating, so moving out voluntarily is your best option.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Fires and Politics

Whenever you have a tragedy like the current fire situation, you have multiple opportunities for politicians to get in front of a microphone or a TV camera to blather on about what is being done by the people who are actually working to save homes and protect lives. I really don’t mind, because they can actually get things done. This blog entry is really a report card on some of our local representatives:

BACKGROUND

After the 2003 Cedar Fire was finally put out, a great deal of criticism was raised about the response to the fires. Most of the criticism focused on lack of preparation, lack of coordination and lack of resources. A report by a blue ribbon commission contained many recommendations that were eventually adopted. Overall, the general consensus seems to be that response to the fires this year has been vastly superior to the response in 2003.

One of the biggest criticisms raised was the fact that a vast array of military fire fighting resources were available, but not put to use. Both the U.S. Navy and the U.S. Marines have large installations and aviation assets like the CH-46 Sea Knight and CH-53 Sea Stallion helicopters which can carry water-dropping buckets. At the time of the 2003 fires, military radios were not compatible with the frequencies used by state and local fire agencies. Military polices at the time also prohibited use of their resources until use of civilian resources had been maximized. That has since changed.

FAST FORWARD TO THE PRESENT

On Monday morning, I got a little irritated when I started hearing media reports about the early lack of use of military aircraft to fight the fires. So I decided to call some of my local representatives about this issue. My plea was for them to pull whatever strings they could to get the necessary approvals from President Bush of whoever needed to sign off on the use of military aircraft to fight theses fires. Here are the responses I got:

Duncan Hunter: Duncan Hunter represents my district in Congress. When I called his local district office, his staff told me the he was “already on it” and rattling of a list of things that he had already done. Now I will admit to being a little biased because he is a fellow Republican and my leading choice for President, but that was exactly the response I was looking for. Mr. Hunter gets an “A” for being proactive

Barbara Boxer: Barbara Boxer is the junior Senator from California. The staff member I spoke with there wasn’t even aware that local military aircraft available to fight fires. They noted my ZIP code and promised to “pass the message along”. Ms. Boxer finally made an appearance in San Diego 3 days after the fires started. Ms. Boxer gets a “D” for being uninformed and slow to respond.

Diane Feinstein: Diane Feinstein is the senior Senator from California. Ms. Feinstein’s staff was waiting for a formal request from Governor Schwarzenegger for activation of military units. Say what? You’re going to stand on protocol when lives and property are on the line? Governor Schwarzenegger had already made a formal request and had activated National Guard troops to help. Ms. Feinstein gets an “F” for not only being uninformed, but for waiting to be for a formal request for help before acting. That sounds like what FEMA did when talking to the state governments after Katrina.

I expect my elected officials to be informed and proactive…to anticipate problems and try to deal with them before they grow out of hand. In this case, two of our leaders failed and one came through. Fortunately, I do not believe we can blame any exacerbation of fire damages on the lackluster senators from California.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Leaving After a Foreclosure

Question: I am losing my house in foreclsoure. After the foreclosure the sale, will I get some kind of notice to vacate or is the sale date the date to be out by?

Answer: After the foreclosure say, the new owner will serve you with a Notice to Quit if you are still in the property. It is a 3-day notice if you are the former owner(s) and a 30-day notice if you are a tenant of the former owner(s).

If you still have not left after the expiration of the notice period, the new owner can file an eviction lawsuit against you to get and order for the Sheriff to remove you. Eviction lawsuits can take a couple of weeks or longer depending on the particular aspect of the case.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Chapter 7 and Keeping Property After Bankruptcy

Question: If I file a Chapter 7 bankruptcy, will i lose my home or car?

Answer: A person who files for bankruptcy may exempt certain items from the bankruptcy. In most cases, this lets you keep your home, your car, your furniture, your household items, your retirement and most, if not all, of what you have. Different states have different allowances for exemptions. You also can keep assets that have no equity, such as a car that's worth less than is owed on it, or a house where the mortgage is higher than the property value. Even if there is a small amount of equity, you can normally keep the asset.

While bankruptcy is a federal law, it is generally left for each state to decide what property that a debtor can keep after filing a Chapter 7 bankruptcy. California homeowners filing for Chapter 7 bankruptcy can protect (or exempt) anywhere from $50,000 to $150,000 of their equity depending on a number of factors that include age, marital status and the length of time they have owned the home. If the equity in the debtor's home is less than the allowed exemption amount, the debtor can keep the house simply by continuing to make the mortgage payments.

If the debtor's equity in the particular asset exceeds the allowed exemption, the property is called "nonexempt" and subject to possible liquidation (sale) by the appointed Chapter 7 trustee. Whether the trustee actually sells the asset depends on how much money the sale might generate. If the asset will not generate sufficient net proceeds to justify the sale, the trustee will often "abandon" the asset and ownership will revert back to the debtor. In other cases, the debtor can negotiate with the trustee to buy the asset back by paying the trustee the an amount equal to the nonexempt equity in the property.

Exemption planning and determining what assets you can keep after a bankruptcy are among the primary jobs of a bankruptcy attorney. You should consult a local bankruptcy attorney for further assistance.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Deck Repairs in a Condominium

Question: Are owners responsible for dry rot on decks (Common Area), or responsible for replacing the handrail? CCRs state that Owners have exclusive easement to use decks and must paint, maintain, repair the interiors (not defined). Decks are open to the air and are attachd to front of building.

Answer: As a general rule, state law provides that the Association maintains the true common areas while the homeowners maintain the separate interests and the exclusive use common areas. Civil Code §1364(a), states:

“Unless otherwise provided in the declaration of a common interest development, the association is responsible for repairing, replacing, or maintaining the common areas, other than exclusive use common areas, and the owner of each separate interest is responsible for maintaining that separate interest and any exclusive use common areas appurtenant to that separate interest.”

In a condominium development, which party is responsible for repair of which part of the property often hinges on how the maintenance responsibilities are assigned under the CC&Rs. In condominium developments, the Association is responsible for most exterior surfaces, other than items such as doors and windows, because the exterior is generally common areas.

In most condominiums, patios and decks are exclusive use common areas. The owners are responsible for maintaining the surface areas in much the same way they must maintain the interior surfaces of their units. The Association would usually be responsible for fixing structural problems (i.e. dry rot, termite infestation, etc.). However, it is impossible to tell in your particular situation without completely reviewing the CC&Rs and the condominium plan.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Bankruptcy and the California Homestead Exemption

Question: Can I file for Chapter 7 and still keep my primary residence?

Answer: You need to provide your attorney with more information, namely whether you're behind on your mortgage payments and the amount of equity in your home. There are applicable exemptions for equity up to a certain point. You may be able to keep your primary residence in a Chapter 7, but it depends on many factors that you need to discuss with your bankruptcy attorney.

California's homestead exemption law dictates the amount of equity in your home that you can protect from creditors in a bankruptcy. The exemption amount depends on the several factors, including your age and marital status. If the equity in your home is equal to or less than the allowable homestead exemption and you keep up your mortgage payments, you should be able to keep your home.

The equity in your home is determined by subtracting the value of any liens from the fair market value of the home. Fair market value can be assessed online at websites such as Zillow.com and Yahoo! Real Estate.

Under California law, the default homestead exemption amount is $50,000. The exemption amount increases to $75,000 for a married couple. The exemption amount is $150,000 for people who met any of the following criteria: (1) aged 65 or older; (2) unable to engage in meaningful employment due to physical or mental incapacity; or (3) are 55 or older and meet certain low income requirements.

If you have a large amount of equity in your home, you might lose your home in a Chapter 7 if the trustee decides to sell it. In that case, a Chapter 13 repayment plan might be better for you.

You need to see a local bankruptcy attorney because it is impossible to give you more specific advice without more information about your particular situation.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Home Foreclosures Rise 36 Percent In August

Month's Total More Than Doubles From Year Before

LOS ANGELES -- Signaling deepening trouble for homeowners, the number of foreclosure filings reported in the U.S. last month more than doubled from the year before and jumped 36 percent from July.

Experts said the trend suggests many homeowners are increasingly unable to make timely payments on their mortgages or sell their homes amid a national housing slump and credit crunch.

The California-based company, RealtyTrac, said August's total represents the highest number of foreclosure filings reported in a single month since the company began tracking monthly filings two years ago.

Consumer Internet Alert: vtexperts.com

The Department of Corporations has been notified that Vehicle Trade Experts (www.vtexperts.com) is offering escrow services over the internet and is falsely advertising at its website that it holds California Department of Corporations license 9521467. This is not a valid license number. vtexperts.com, which states its head office is at 1440 Skymark Ave, Toronto, ON, is not licensed by the California Department of Corporations.

Disposition of Excess Foreclosure Proceeds

Question: I lost my home to foreclosure and they sold my house for more than I owe. Do I get any of the excess money? The bank sold my house for $50k more than I owed, even with the finance charges.

Answer: The bank is only entitled to retain the amount owed on the loans plus any legally authorized costs of the foreclosure sale. Any exceed proceeds could go to you or to creditors that have priority over you.

Suppose you had a second mortgage for $75,000. California Civil Code § 2924k(a)(3) requires that surplus funds be paid to "to satisfy the outstanding balance of obligations secured by any junior liens or encumbrances in the order of their priority." The second mortgage holder would make a claim to the $50,000 above what was necessary to satisfy your obligation under the first mortgage. You might also have judgment creditors who have put a lien on your home that would have priority over you.

If there are no other creditors with a legal entitlement to the money, you can retrieve the excess proceeds from the foreclosure trustee. Feel free to contact us if you need further assistance.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Deadline to Sue on a Personal Loan

Question: I made a personal loan to a friend of $3000 to help save their business. In the loan agreement, it stated that the money (plus interest) was to be repaid in six months. The due date has passed by eleven months, and I have not received one cent towards repayment. How much time do I have before I loss my right to sue for the money?

Answer: It sounds like you had a written promissory note. If the loan was made under a written agreement, you must sue within 4 years of the date that your friend breached the agreement. Your friend breached the agreement when the loan became due.

If the loan was a verbal agreement, then you have two years from the due date to file a lawsuit.

For $3000, you should sue in small claims court rather than hire an attorney.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Business Travelers Beware: Free Wi-Fi Scam Strikes at Airports

This Better Business Bureau consumer bulletin is sponsored by San Diego Gas & Electric, a Sempra Energy utility.

In order to keep up in today’s world, a business needs to make sure its employees stay connected, even on the road. Many airports and other public spaces offer free wireless, or Wi-Fi, connections for the public to log onto the Internet from their laptop computers. The Better Business Bureau (BBB) warns that hackers are now taking advantage of this convenience and setting up fake Wi-Fi connections designed to steal your personal information and files without you even knowing.

How it works:

Although hackers can and have set up fake Wi-Fi connections in a number of venues, usually they will target consumers at airports. When searching for connections, consumers may see a network connection available that could be simply named “Free Wi-Fi.” Thinking it’s the free connection offered by the establishment, they’ll log on. Unfortunately, the network may actually be an “ad-hoc” network, or a peer-to-peer connection. The user will be able to surf the Internet, but they’re doing it through the hacker’s computer. And the whole time, the hacker is stealing information like passwords, credit card and bank account numbers, and social security numbers. Beyond simply stealing keystroke information as the user enters various types of data, if the PC is set to share files, the hacker could even steal whole documents from the computer.

Airports across the nation continue to report on Wi-Fi security issues. Officials in Atlanta, New York LaGuardia and Los Angeles airports have all reported the existence of ad-hoc networks advertised as free Wi-Fi connections. An investigation revealed that Chicago O’Hare had 20 ad-hoc networks present that were potentially designed with the intent of hacking into unsuspecting user’s computers and networks.

The BBB offers the following advice on how to keep yourself safe when you go wireless:

• Never connect to an unfamiliar ad-hoc network, even if the name sounds genuine. A hacker can change the name of his network to anything he wants, including the name of the legitimate Internet connection offered by the airport. Just because it has the same name as the Wi-Fi advertised in the airport, don’t believe it. For more information on how to distinguish between an ad-hoc network and a normal Wi-Fi network with Windows Vista or XP visit http://support.microsoft.com/.
• Make sure that your computer is not set up to automatically connect to non-preferred networks. Otherwise your computer could automatically connect to the hacker’s network without your knowledge.
• Turn off file sharing when you’re on the road to prevent hackers from stealing entire documents, files and unencrypted e-mail from your computer.
• Create a Virtual Private Network (VPN) for your business. A VPN establishes a private network across the public network by creating a tunnel between the two endpoints so that nobody in between can intercept the data. Many companies allow remote users to connect to corporate networks as long as they use VPN. This keeps the users' communications just as secure as if they were sitting at a desk in the building.

The BBB is here to help with advice you can trust. For more information on identity theft, fraud prevention, and keeping your company secure online, visit http://www.sd.bbb.org/.

Credit Counseling Versus Bankruptcy

Not all credit counseling agencies and debt reduction companies are created equal as described in a recent article I read called Risks of Using Non-profit Credit Counseling Agencies. Managing to qualify as a non-profit organization does not necessarily mean that the organization is free from corruption or greed. In a recent article, I wrote about a trend that I have recently observed where real estate agents tend to oversell the benefits of a short sale. I am seeing similar overselling of the benefits of credit counseling.

Every bank is required to notify the IRS when it forgives over $600 of your credit card debt. This forgiveness of debt may result in you owing thousands of dollars in back taxes, interest and penalties. If you need debt reduction, you can obtain the same result tax free in a Chapter 13 wage earner's reorganization. The big advantage that a Chapter 13 bankruptcy has over credit counseling and debt reduction companies is that the repayment plan is a binding court order and can deal with all of your creditors. Private debt repayment plans only bind the creditors that are willing to negotiate with you.

Some attorneys will go so far as to say that should not even consider hiring a debt reduction company until you get a guarantee in writing that the debt reduction will not result in back taxes owed to the IRS together with penalties and interest. Keep in mind that not all forgiveness of debt is taxable income. However, it is taxable to the extent the taxpayer is solvent or is rendered solvent by the forgiveness.

Like short sales, credit counseling and debt reduction companies are not a magic pill to save your credit rating and make your debt problems disappear. Credit counseling is an important service to help you regain control of your spending habits. However, the best what determine what is the most beneficial solution for your situation is to seek the advice of a competent attorney and a tax professional.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Will Having a Line of Credit Harm My Credit Score?

Question: I am refinancing my house and the broker said I could get a home equity line of credit. Does this hurt me if I never use it or if I use it for an emergency?

Answer: Having too much credit can impact your credit score, but it all depends on your circumstances. How much credit you have is just one of many factors that impact you credit such as how much debt you have, your payment history and your employment history.

When you apply for credit, your ability to pay is one of the primary factors a lender will use in making a decision on whether to extend you credit. In terms of the worst case scenario, creditors will consider what might happen if you maxed out all of your available credit. I have seen creditors turn people with nearly perfect credit histories and no debt simply because they had far to much available credit.

If you have sufficiently available credit to get yourself in trouble, it might have an impact on your ability to get new credit for things like a new car or a new credit card. Before applying for credit, you speak with the lender about their underwriting standards to see if your line of credit might impact your ability to get a new loan.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Is a Short Sale Better Than Filing Bankruptcy?

Question: The payments on my adjustable rate mortgage are going through the roof. I owe more than my property is worth, so I cannot refinance to a fixed rate mortgage and I just can't afford my payments any more. My real estate agent tells me that a short sale is better than letting the property go in a foreclosure or a bankruptcy. What should I do?

Answer: I've seen real estate agents try to push short sales as a cure all to avoid bankruptcy. Quite frankly, the answer just isn't that simple. A short sale should only be considered after weighing all of your options, including bankruptcy and foreclosure.

A short sale is where the the lender takes less money than is actually owed because it may be a better alternative for the lender than a foreclosure sale in a down market. Before allowing a short sale a lender will want to see how such a deal can be structured. Perhaps the borrower has other assets, or perhaps the short-fall can be made up with a note to the lender.

If the lender forgives a portion of the debt, debt forgiveness over $600 must be reported to the IRS as income to the borrower -- money not actually received by the borrower, but money that is taxable. On the other hand, debt forgiveness received in bankruptcy is not taxable.

A successful short sale gives the homeowner some control over their destiny. The homeowner may be able to avoid bankruptcy and a foreclosure on their credit rating with a successful sale. However, short sales are often time consuming and difficult to negotiate.

One factor that real estate agents often do not consider is the total debt picture of the homeowner. While a short sale may resolve the issue of escalating mortgage payments, the homeowner may have other debts that need to be dealt with in a bankruptcy. Preventing a short sale won't do much good to protect a consumer's credit rating if a bankruptcy becomes necessary at a later date.

Every situation is different, but I see many clients who who cannot afford their mortgage payments and they usually have other debt problems. Sometimes paralyzed with fear, the do not know which way to turn. In many cases, their best option is to file for Chapter 7 to get out from under all of their debt problems and avoid the potential tax problems with a short sale and letting the bank take the property back in a foreclosure.

The only way to determine what is best for your situation is to seek the advice of a competent attorney and a tax professional. Short sales are not a magic solution that some proponents make them out to be and you must look at your global decision before deciding which course of action to take.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Credit Card Statements and Preparing for Bankruptcy

Question: Why do you request 3 months worth of credit card statements prior to filing my bankruptcy case?

Answer: We have two primary reasons for requesting this many credit card statements. Both have legal and practical implications.

First, your credit card statement is the best evidence of the proper address to notify creditors when you file bankruptcy. The bankruptcy court does not independently verify the addresses that debtors provide when it mails out notices related to the bankruptcy. Using the addresses provided on the credit card statements also saves our staff the time in might take to research the creditor's address online. It enables us to file your case sooner.

Second, we like to review a client's credit card purchases to identify any potential problems with receiving a discharge. I strongly recommend that my clients stop using their credit cards once they have decided to file bankruptcy. Incurring debt that you knew would not be repaid could be considered fraudulent, thus resulting a denial of a discharge.

Creditors can file an action called an adversary proceeding to object you receiving a discharge. Purchases for luxury goods or services totaling more than $500 on a single credit made within 90 days before the bankruptcy filing date are presumed to be fraudulent if the creditor files an adversary proceeding. Cash advances totaling $750 or more during the 70 day period prior to the bankruptcy filing date have the same presumption of fraud.

We do our best to make sure that all of your creditors are notified of your bankruptcy case and to insure that you receive a discharge of all of your debts.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Enforcing Foreign Court Judgments in California

From time to time, a judgment creditor who obtained a judgment in another country will seek to enforce it in the United States. California has adopted a law called the Uniform Foreign Money-Judgments Recognition Act to register foregn court judgments.

The process of domesticating a foreign judgment is more complicated than registering a judgment from another state. Registering a judgment from another country requires filing a new California lawsuit. It would be necessary to confirm the location of the debtor and serve the debtor with the lawsuit. The debtor would have 30 days to respond to the lawsuit just like any other civil action in California.

If the debtor decided to fight the lawsuit, it could take several months to resolve the case. The California court would primarily be concerned with due process rights. If the foreign court judgment was obtained by default, the California court would require proof that the debtor had notice of the lawsuit (i.e. proper service) and an opportunity to be heard. If the debtor fought the lawsuit, due process requirements are satisfied and a certified copy of the judgment would be sufficient along with an authenticated translation in order to obtain a California judgment.

A judgment is only as good as the amount of assets available to enforce it. Before investing additional money, the judgment creditor should consider obtaining an extensive background and asset investigation to determine if the debt is collectible. Click here to read any article on some of the methods available to collect California judgments.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Tweeter Home Entertainment Group Files for Bankruptcy

Tweeter Home Entertainment Group Inc. ("Tweeter"), the high-end electronics retailer, filed for Chapter 11 bankruptcy. Two bids have emerged for assets of Tweeter as part of the bankruptcy reorganization.

The value of a many businesses is greater if sold or reorganized as a going concern than the value of the sum of its parts if the business's assets were to be sold off individually. In theory, creditors of Tweeter should receive more money than in Chapter 7 liquidation.

We are currently consulting with former employers of Tweeter that are owed money for severance packages, back wages and benefits. These types of claims might be entitled to priority over other creditors for as much as $4,650. If you are a California resident and would like assistance in filing your claim with the bankruptcy court, we might be able to help you.

We provide competent, thoughtful representation that helps achieve client goals at a reasonable cost. Please call our office for a complimentary consultation at (619) 448-2129 or visit my website at http://www.chs-law.com/ for more information.

Enforcing Judgments From Other States

Question: I live in Arizona and have a large judgment against my former business partner. He moved to San Diego, so how do I collect my judgment?

Answer: Your judgment is only good within the boundaries of your state. However, the Sister State Money-Judgment Act allows you register the judgment in California so that you can use California law to go after any assets the judgment debtor owns in California.

To register your judgment in California, you will need to complete judicial council forms EJ-105 Application for Entry of Judgment on Sister-State Judgment and form EJ-110 Notice of Entry of Judgment on Sister-State Judgment. You will need to attached a certified copy of the sister-state judgment to the application for entry of judgment. A declaration showing how you calculated the post-judgment interest is required as well. Most California counties will have additional local procedures, including the requirement to submit a proposed California judgment.

Once the court enters the judgment, you must serve the Notice of Entry of Judgment on the judgment debtor. Enforcement of the judgment is automatically stayed until 30 days after service of the Notice of Entry of Judgment. The judgment debtor has 30 days to challenge the judgment.

The most common challenge is that the sister-state court lacked jurisdiction for some reason. If the judgment debtor does not challenge the judgment, then the judgment creditor can take whatever steps are necessary to collect on the judgment. Click here for an article on the various methods to collect California judgments.

Our office has domesticated a number of sister-state judgments in California. Feel free to contact us if you need further assistance.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Consumer Alert: Dream vacations can become real nightmares with travel-related fraud

This Better Business Bureau consumer bulletin is sponsored by San Diego Gas & Electric, a Sempra Energy utility.

The summer vacation season is upon us and scams can turn your long‑awaited trip into a travel nightmare. It has been reported that vacation scams cost consumers more than $10 billion each year.

Among the types of complaints reported to BBBs across the country, one of the most frequent involves travel. Out of the 3,900 industries the BBB monitors, the travel industry consistently ranks near or in the top 25 for number of complaints. The complaints generally involve consumers who report they felt misled or deceived after receiving less or something different than what was promised or expected.

For example, consumers have criticized so‑called "deluxe accommodations" that turned out to be, in reality, far less than first‑class. The sales brochure or videotape may show beautiful sunsets along white sandy beaches, smiling, healthy couples with tropical drinks and a smart looking hotel lobby. However, when you arrive you may find a substandard, even dirty motel room that's located in a crime‑infested neighborhood several miles away from the beach. Other consumers have been critical of incomplete information regarding airline schedules and too many restrictions.

Among the recent travel-related scams reported to the BBB:

-- A San Diego-based firm selling discounted vacation packages on eBay to Hawaii, Mexico and the Virgin Islands scammed consumers across the U.S. out of several hundred to more than $5,000 throughout 2006 and early 2007. Travelers were tricked with bait and switch tactics and ended up paying much more for the vacation packages than they planned. After paying for the vacations, some consumers also found that rooms, travel, and other reservations were made with invalid credit cards, or never booked at all.

-- A company in Missouri conducted seminars in local hotels that promised travel incentives, discounts and assistance in becoming a “travel agent.” The BBB found that the company routinely charged consumers membership, administrative, and renewal fees that greatly exceeded any discount on vacation packages, and that much of the information activities “sold” by the company could be found elsewhere free-of-charge to consumers.

Here are some tips from the BBB on how to spot and avoid the threat of vacation and travel-related fraud:

-- Gather Information.

Don’t be fooled by professional looking Web sites or e-mails. Few legitimate businesses can afford to give away products and services of real value or substantially undercut other companies’ prices. Visit the BBB Web site, www.bbb.org, or call the BBB for a free reliability report on the travel company making the offer.

-- Ask detailed questions and get it in writing.

Get names of airlines, hotels, car rental companies and travel providers. Consider contacting these businesses directly to verify arrangements. Always ask for confirmation of your travel arrangements in writing and ensure you receive copies of cancellation and refund policies.

-- Pay with a credit card and avoid deals that require you to book 60 days in advance.

Credit card companies may allow consumers to dispute a charge within 60 days of purchase. Representatives from eBay also caution consumers against paying with personal checks and strongly recommend paying with a method such as PayPal that has built-in protection measures.

-- Contact the BBB if you are a victim of fraud.

The BBB helps consumers and businesses through complaint and dispute resolution services. Victims of travel-related scams can visit www.sd.bbb.org or call the BBB to file a complaint.

Ultimately, consumer complaints expose bad businesses and help other consumers avoid becoming victims of vacation and travel-related fraud.

Before booking travel plans, consumers need to do their research and check with the BBB for trustworthy advice on dependable businesses to keep from getting burned this summer.

Please visit www.sd.bbb.org for additional consumer alerts, warnings and tips.

California Wage Garnishments And Duties of Employers

Question: I had the sheriff's department serve a wage garnishment on the judgment debtor's employer, but the employer hasn't done anything with it yet. What can I do?

Answer: A judgment creditor initiates a wage garnishment by obtaining a Writ of Execution from the Court and filling out an Application for Earnings Withholding Order and provide both documents and the appropriate fee to the sheriff's department. The sheriff's office will then prepare an Earnings Withholding Order ("EWO") and serve it on the employer. An EWO directs the employer to withhold part of the earnings of the employee and pay the withheld sums to the sheriff's office.

The sheriff's department will also provide the employer with a questionnaire called the Employer's Return that must be completed and returned within 15 days. The employer's return provides important information to the judgment debtor regarding whether the judgment is collectible.

The EWO has the same force of a court order. If the employer fails to complete the questionnaire, the first step is usually a strongly worded attorney letter to the employer. If the employer still refuses to fill out and return the questionnaire, you can file an action for contempt of court. Often the threat of fines and jail time will motivate the employer to fill out the questionnaire. You can also recover your legal fees if the court finds the employer in contempt.

Once you have the questionnaire in hand, you can determine if the employer wrongfully withheld wages. The law allows judgment creditors to held employers directly liable if the employer failed to withhold wages as required for the EWO.

Enforcing employer obligations with respect to the Employer's Return and wage garnishment orders are best done with the assistance of an attorney. Please contact us at (619) 448-2129 if you need further assistance.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Validity of Unsigned Court Orders

Question: Are orders without judge's signature valid? I got a preliminary injunction that has judge's rubber stamp, but it is not signed by the judge and the clerk. I think they are afraid to sign it because the plaintiff made up evidence to get the injunction. Can I ignore the injunction? Will they hold me in contempt? Is the order valid?

Answer: The order with the rubber stamp is called the "conformed" copy. The clerk stamps this copy and gives it to the attorney or party without an attorney. The signed order is in the file. If you go to the courthouse, you can usually obtain a copy of the signed order, at 50 cents per page. Using the judge's name stamp to provide a conformed copy of an order is a very common practice.

Technically, you don't even need to be served with a copy of the order in order for it to be valid. To be held in contempt of the court, the opposing party must provide 4 elements: (1) existence of a valid order; (2) your knowledge of the order; (3) ability to comply; and (4) willful disobedience. The most common way of proving knowledge is to have a process server hand delivery a copy of the order, but your presence in court when the order is made is sufficient to establish knowledge.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Dissolving a Corporation in California

There are many reasons to formally dissolve an inactive corporation:

• No more $800 minimum franchise tax fee;
• No more filing of tax returns
• No more annual filings with the California Secretary of State
• No more annual meetings of the shareholders and board of directors

The voluntary dissolution of a domestic stock corporation is initiated by an election to dissolve. The election to dissolve may be made by the vote or written consent of at least fifty percent of the outstanding shares of the corporation, by the board of directors if no shares have been issued or in limited circumstances, by a majority of the incorporators if no directors were named in the original Articles of Incorporation and none have been elected.

To dissolve, the corporation must file a Certificate of Election to Wind Up and Dissolve prior to or together with a Certificate of Dissolution. However, if the election to dissolve is made by the vote of all the outstanding shares, only the Certificate of Dissolution is required.

Although Tax Clearance certificates are no longer needed, the corporation is required to file any outstanding and/or final returns with the California Franchise Tax Board. In addition to the services of legal counsel, a CPA or other tax professional should be retained to assist with preparing the closing tax returns.

When dissolving a corporation, the directors signing the Certificate of Dissolution must certify one of the following to be true:

• The corporation's known debts and liabilities have been actually paid;
• The corporation's known debts and liabilities have been paid as far as its assets permitted;
• The corporation's known debts and liabilities have been adequately provided for by their assumption;
• The corporation’s known debts and liabilities have been adequately provided for as far as its assets permitted; or
• The corporation never incurred any known debts or liabilities.

Failure to adequately provide for the debts of the corporation could result in personally liability of the shareholders. The services of legal counsel are very important in avoiding this type of personal responsibility.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Consumer Alert: Cut The Line On Phishing Scams

This Better Business Bureau consumer bulletin is sponsored by San Diego Gas & Electric, a Sempra Energy utility.

Please read then forward to your friends and co-workers so they may be informed too.

Phishing is an e-mail in which fraudsters attempt to convince consumers to reveal personal information, such as their credit-card account numbers, checking account information, Social Security numbers and banking account passwords, through official-looking fake websites or in a reply e-mail.

Phishing doesn't use a rod and reel; rather it uses the Internet and the intent is to catch consumers who are not aware of this scam.

Phishers sail under false colors and deliberately misrepresent themselves, just to get their hooks into consumers' personal and financial information.

Consumers can best protect themselves by following one simple rule: When in doubt, delete.

Many financial institutions might use e-mail to communicate with customers and direct them to their websites where the customers may be asked to enter personal information as part of registering for a service, such as online banking or accessing account information. However, if the e-mail wasn't initiated in response to an action by the consumer, it's a good idea to go directly to the organization's website by entering the website address (URL) rather than linking it from an e-mail.

Here is how to avoid getting lured into a phishing scam:

• Treat unsolicited e-mail requests for financial information or other personal data with suspicion. Unsolicited means the e-mail wasn't initiated in response to an action by the consumer. Do not reply to the unsolicited e-mail or respond by clicking on a link within the unsolicited e-mail message.
• Contact the actual business that supposedly sent the e-mail to verify if it is genuine.
• Only enter personal information on a secure website that you know to be legitimate.
• Update anti-virus software and security patches to system software regularly.
• Be cautious. Check your monthly statements to verify all transactions. Notify your bank immediately of any erroneous or suspicious transactions.

Please visit the San Diego Better Business Bureau for additional consumer alerts, warnings and tips.

Assignment of an Old Judgment

Question: Does assignment of judgment to a third party automatically extend the life of a judgment past initial 10-year period? How do you know when the judgment has expired?

Answer: No. A judgment in California is good for 10 years, regardless of whether or not it has been assigned. However, the assignee or the judgment creditor can apply for a renewal of the judgment any time before the expiration date. You can look on the court's website or go to the courthouse to examine the records. The date of the judgment's entry might also appear on the debtor's credit report.

Some courts are experienced long delays in the processing of routine documents because of a new computers system that will soon be adapted throughout the state. If your application to renew the judgment is rejected due to some error, filing close to the 10-year expiration date could be risky. Click here to obtain more information on the process of renewing a California Judgment.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

One Day Blog Silence

Adding a Creditor to a Bankruptcy

Question: I filed for Chapter 7 bankruptcy and I forgot to list one of my credit cards. My case is still pending, so I can I still add this creditor?

Answer: Yes, it's possible. It's done by filing amended forms with the bankruptcy court. Depending on the particular schedule(s) that need to be amended, there may be additional court fees associated with the filing. If you're working with an attorney, this is not usually included in the attorney/client agreement, which means that your attorney may ask for more fees.

Generally, the failure to list a creditor can result in the denial of a discharge as to that particular debt. The reason for this rule is that it is unfair to creditors when a debtor's assets have been liquidated and the creditor is denied the chance to file a proof of claim and receive partial payment. However, some courts have adopted a "no harm, no foul" rule in "no asset" bankruptcy cases and debtors nonethless receive a discharge as to all debts.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Forming a Corporation or LLC

Anyone who operates a business, alone or with others, may incorporate or form a Limited Liability Company ("LLC"). Under the right circumstances, the owner of any size business can benefit!

Reduces Personal Liability
Incorporating or forming and LLC helps separate your personal identity from that of your business. Sole proprietors and partners are subject to unlimited personal liability for business debt or law suits against their company. Creditors of the sole proprietorship or partnership can bring suit against the owners of the business and can move to seize the owners’ homes, cars, savings or other personal assets. Once incorporated, the shareholders of a corporation or members of an LLC have only the money they put into the company to lose, and usually no more.

Adds Credibility
A corporate structure communicates permanence, credibility and stature. Even if you are the only stockholder or employee, your incorporated business may be perceived as a much larger and more credible company. Seeing “,inc.” or “corp.” at the end of your business name can send a powerful message to your customers, suppliers, and other business associates about your commitment to the ongoing success of your venture.

Tax Advantages – Deductible Employee Benefits
Incorporating usually provides tax-deductible benefits for you and your employees. Even if you are the only shareholder and employee of your business, benefits such as health insurance, life insurance, travel and entertainment expenses may now be deductible. Best of all, corporations usually provide an increased tax shelter for qualified pensions plans or retirement plans (e.g. 401K’s).

Easier Access to Capital Funding
Capital can be more easily raised with a corporation through the sale of stock. With sole proprietorships and partnerships, investors are much harder to attract because of the personal liability. Investors are more likely to purchase shares in a corporation where there usually is a separation between personal and business assets. Also, some banks prefer to lend money to corporations.

An Enduring Structure
A corporation is the most enduring legal business structure. Corporations may continue on regardless of what happens to its individual directors, officers, managers or shareholders. If a sole proprietor or partner dies, the business may automatically end or it may become involved in various legal entanglements. Corporations can have unlimited life, extending beyond the illness or death of the owners.

Easier Transfer of Ownership
Ownership of a corporation may be transferred, without substantially disrupting operations or the need for complex legal documentation, through the sale of stock.Centralized ManagementWith a corporation’s centralized management, all decisions are made by your board of directors. Your shareholders cannot unilaterally bind your company by their acts simply because of their investment. With partnerships, each individual general partner may make binding agreements on behalf of the business that may result in serious financial difficulty to you or the partnership as a whole.

Corporation vs. LLC
Many clients ask which is better, a corporation or an LLC. This is a complex issue and must be addressed on a case-by-case basis with the your attorney and your tax consultant. In California, some businesses such as contractors or attorneys cannot do business as an LLC.

The purpose of this article is to provide general information on the law, which is subject to change. If you have a specific legal problem, you should to consult a lawyer.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Renewing a California Judgment Lien

Question: Does an abstract of judgment have a 10 year life just like a judgment and do you need to renew an abstract of judgment every time you renew the judgment?

Answer: Filing an application for renewal extends the judgment created by the abstract. However, you must record a certified copy of the application for renewal at the county recorders office in order to perfect the extension. Recording a new abstract may give you a lower priority to liens recorded after your original abstract.

You should also check to see if the debtor's property has changed hands since the time you recorded the original abstract. There are additional procedures you need to follow to extend the lien with respect to the new owner if a transfer has taken place. Failure to follow the proper procedures to notify the new owner could invalidate your judgment lien.

In most cases, it should not take the full 10 years to collect the judgment. If you need assistance in collecting an old judgment, please feel free to contact our office at (619) 448-2129 for a complimentary consultation.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Update on Landlord & Tenant Rights

The Legislature has reinstated the requirement that a landlord give a tenant 60 days’ advance written notice to end a periodic tenancy in some circumstances. Most periodic tenancies are month-to-month or week-to-week.

Beginning January 1, 2007, the landlord must give the tenant 60 days’ advance written notice to end the tenancy if every tenant and resident have lived in the rental unit for a year or more.

However, the landlord can give the tenant 30 days’ advance written notice in either of the following situations:

• Any tenant or resident has lived in the rental unit less than one year; or
• The landlord has contracted to sell the rental unit to another person who intends to occupy it for at least a year after the tenancy ends. In addition, all of the following must be true in order for the selling landlord to give the tenant a 30-day notice –
  • The landlord must have opened escrow with a licensed escrow agent or real estate broker, and
  • The landlord must have given the tenant the 30-day notice no later than 120 days after opening the escrow, and
  • The landlord must not previously have given the tenant a 30-day or 60-day notice, and
  • The rental unit must be one that can be sold separately from any other dwelling unit. (For example, a house or a condominium can be sold separately from another dwelling
  unit.)

A tenant who wants to end a periodic tenancy must give the landlord the same amount of written notice as there are days between rent payments (for example, 30 days’ notice if the tenant pays rent monthly). This is true even if the landlord has given the tenant a 60-day notice, provided that the amount of the tenant’s notice is at least as long as the number of days between rent payments, and the tenant’s proposed termination date is before the landlord’s termination date.

Do I Need an Attorney?

I get this question a lot from potential clients that are concerned about the cost of legal fees. While there are some instances where a party to a lawsuit must have an attorney such as a corporation or a person subject to a conservatorship, most individuals have the right to represent themselves and conduct their own legal affairs. The question is whether or not you SHOULD represent yourself.

I compare representing yourself to changing your own oil in your car. When I was in high school, I learned to change my own oil. I even remember that you are supposed to lubricate the gasket on the new oil filter to get a better seal. But I do not change my own oil.

If I change my own oil, I will spend half my Saturday morning underneath my truck and then still have to figure out how to dispose of the used oil. On the other hand, I can take my truck to the local EZ Lube and know that it will get done right, pay someone else to do it for $25 and get a free car wash while I read the paper at the local Starbucks. In other words, I don’t change my own oil.

Are you comfortable with your legal knowledge and skills? Then maybe you can represent yourself, but it never hurts to at least call a qualified attorney for a complimentary consultation.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Wage Garnishments and the Employer's Duties

Question: I am in California and I just received a wage garnishment for one of my employees. What are my duties?

Answer: When the Sheriff's Department serves an Earnings Withholding Order ("EWO") on an employer, it will contain detailed instructions on how to proceed. If the employee works for you, you must give the employee a copy of the EWO as well as the Employee Instructions within 10 days after receiving the EWQ.

You were also provide with a document called an Employer's Return. You must complete this form and mail it the Sheriff's Department within 15 days after receiving the EWO, whether or not the employee works for you.

If the employee still works for you and there are no other wage garnishments in place, you must begin withholding money from the employee's paycheck. Count 10 calendar days from the date when you received the EWO. If your employee’s pay period ends before the tenth day, do not withhold earnings payable for that pay period. You should withhold from earnings that are payable for any pay period ending on or after that tenth day. You must also continue withholding for all pay periods until you withhold the amount due.

The Employer's Instructions will tell you how to calculate the amount of money to be withheld form each paycheck. You must pay the money to the Sheriff's Department by the 15th of the next month after each payday. Be sure to mark each check with the case number, the Sheriff's file number, and the employee's name so the money will be applied to the correct account.

You should continue to withhold money form the employees patch until you receive a written notice form the Sheriff; (2) receive an EWO of higher priority (i.e. for child support); or (3) a court order terminating the EWO such as a bankruptcy filing.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Handling Threats of Violence

Question: My ex-wife's new boyfriend twice threatened to kill me over the phone and my ex-wife has threatened to commit suicide. How do I protect myself and my son from this guy?

Answer: Any time someone threatens you directly, you have the right to file for a civil harassment restraining order. Click here to read an article on how the process works.

Your situation is a little tricky because there have been no threats made against your son, so the court cannot issue an order protecting him. During the times you have custody, any "stay away" orders you receive will also protect your son. During the times that your ex-wife has custody, you will need to address this issue with the judge that is handling your divorce matter. Unfortunatley, you ex-wife's suicide threats are inadmissible heresay and have nothing to do with the threats made against you by her boyfriend.

You suggest that you file for the harassment restraining order and then discuss the custody issues with a family law attorney to see if it is possible to keep this person away from your son.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Regaining Possession After a Foreclosure Sale

Question: The bank foreclosed on the house I was living in last week. How long do I legally have to stay in the property? I am in California.

Answer: After the foreclosure sale, the new owner must serve a Notice to Quit on the occupants. If you are the former owner, you are only entitled to a 3-Day Notice to Quit. If you are a tenant of the former owner, you are entitled to a 30-Day Notice to Quit. If you still remain in the property after the the Notice to Quit expires, the new owner can file a eviction lawsuit which is also known as an unlawful detainer. If the new owner wins the lawsuit, you can be forcibly removed just as if you were a renter who had failed to pay rent.

You should either enter into a rental agreement with the new owner or leave volutarily. Even the filing of an eviction lawsuit against you can damage your credit rating and make it more difficult to find a new place to live.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Displaying Bounced Checks

Question: I am a small business owner who was given a check that was returned for non-sufficient funds. There is no question the account holder drafted the check and did not have sufficient funds at the time he wrote and gave me the check. I intended to publicly display the check at my business but was told this is illegal in California. Is this true?

Answer: I am unaware of any specific California law that prohibits this practice, but I there are cases in other states where the merchant has been held liable for invasion of privacy under similar circumstances. I have seen this type of display before and I doubt that merchants have really gained much besides the satisfaction of revenge.

The check will contain the account number and address of the check writer. In this day and age, it is very possible the a court could find the merchant liable if the display of a dishonored check lead to identity theft or some other financial loss to the person who wrote the bad check.

If the debtor files for bankruptcy, continuing to display the check could be considered an effort to collect the debt and a violation of the automatic stay or the discharge order.

California Civil Code Section 1719 allows a merchant to collect treble damages on a bounced check of up to $1500. Filing a small claims lawsuit and obtaining judgment against the bad check writer will place the judgment on their credit and this will be far more effective in helping you get your money than trying to publicly shame the debtor.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Consumer Tip: Timeshare Purchases

As many Southern California residents know, the developers of the Tahiti Village resort in Las Vegas have aggressively marketed sales of timeshare opportunities in Las Vegas. Consolidated Resorts, Inc. ("CRI") has been advertising free trips to Las Vegas. While this is a very high quality resort, consumers should be aware of the potential risks of purchasing a timeshare.

Timeshares typically have a very low resale value. In this case, CRI offered my wife and I a floating week in a 2-bedroom unit called the Royal Tahitian at prices ranging from $39,000 to $55,000. We eventually settled on purchasing a week in a 1-bedroom unit call the Moorea (580 square feet). Upon our return home, I found Royal Tahitian units for sale by current Tahiti Village owners for as little as $13,000. We promptly decided to cancel our purchase.

Nevada law allows a 5-day "cooling off" period for timeshare purchases. We elected to cancel our purchase and faxed a letter to CRI on the 5th day. Staff from CRI called to acknowledge receipt of the cancellation but stated that the cancellation notice must be given by certified mail. Although we did not read any such requirement in our documents, we complied as requested.

When purchasing a timeshare, be very careful to read all of the fine print and do your market research first. You might be paying far too much by purchasing from a timeshare developer and cancellation notices not given in the proper manner could com back to haunt you. Not every state has a "cooling off" period for timeshare purchases, so carefully read the documentation you are provided.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.