Black & LoBello on AM720 KDWN

Tune in as Black & LoBello offers free legal advice on a wide range of topics

Click here to listen to the Legal Hour on KDWN AM720 from May 30th, 2012 in which Managing Partner, Tisha Black Chernine, Esq., hosts special guest, Randy M. Creighton, Esq., a bankruptcy attorney practicing at Black & LoBello.  Mrs. Black Chernine and Mr. Creighton discuss misconceptions about bankruptcy (3:40), how to improve credit (8:15), the differences between chapter 7, 11 and 13 bankruptcies (10:15), how and when bankruptcy can protect real estate assets (12:40), student loans in a bankruptcy (14:44), which debts can be discharged (18:40), short sale vs. bankruptcy (21:00), 1099-C tax  forms and promissory notes (25:45), how to use TILA letters (30:37) and how a lawyer can help in a loan modification (35:50).

Please tune in to AM720 KDWN’s “Legal Hour,” every Wednesday, from 9 AM to 10 AM.  Listen live on the radio or online.   Feel free to call in with your comments or questions at 702-257-5396.

To listen to past shows, visit our Media page.

How To File Bankruptcy: The Series - Part 6

Qualify for a mortgage with bankruptcy

Contrary to popular belief, acquiring a mortgage after filing for bankruptcy is not impossible.  The Federal Housing Administration insures mortgages despite bankruptcy, with seasoning requirements.

Time Frame

  • Per the FHA Guidelines, a debtor must wait at least two years after a Chapter 7 or 13 is discharged before you can qualify for a mortgage.
  • FHA makes an exception to the two-year waiting period for Chapter 7 filings. If you had to file due to extenuating circumstances beyond your control, such as a medical condition or physical disability that kept you out of work, you may qualify after a 12-month waiting period post discharge. FHA requires you to document responsible financial management in the interim.
  • You must obtain court permission to enter into the mortgage transaction after a Chapter 13, according to the FHA Handbook. Chapter 7 filings have no such requirement, although you must have reestablished good credit without incurring new credit obligations.

In closing, while bankruptcy will significantly impact your credit, you are able to obtain a mortgage within two years if the above requirements are met.

Randy M. Creighton, Esq.

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Bankruptcy and Divorce Seminar

Black & LoBello will host a seminar discussing Bankruptcy and Divorce on February 25th, 2011 at 10 AM.  This seminar is open to anyone seeking answers to the following questions:

• Can I file for bankruptcy during my divorce?
• Is it better to file before or after my divorce?
• What if my spouse files and I don’t, or vice versa?
• If my ex-spouse filed bankruptcy, am I liable for debts he/she agreed to be responsible for in the divorce agreement?

Seating is limited.  Please RSVP to [email protected]

As part of an asset protection plan, people may place certain assets into a single member limited liability company (LLC) with the belief that these assets are protected from individual creditors. However, in the bankruptcy context, a single member LLC will not provide any asset protection for a person from their individual creditors.  In multiple jurisdictions, bankruptcy courts held that, where the debtor was the sole member and manager of the subject LLC, the Chapter 7 Trustee could seize control of the LLC and may cause the LLC to sell the assets of the LLC.

Nevertheless, in each of these cases, the bankruptcy court treated the single member LLC differently than an LLC with multiple members.  In cases where a single member files for bankruptcy while other members of a multi-member LLC do not, and where the non-debtor members do not consent to a substitute member status for a member interest transferee, the bankruptcy estate is only entitled to receive the share of profits or other compensation by way of income and the return of contributions to which that member would otherwise be entitled.

However, before adding a second member to an LLC, be aware of the “peppercorn” membership interest.  A “peppercorn” membership interest is when the LLC owner gives a third party a small interest in the LLC for the sole purpose of avoiding or hindering a creditor from collecting.  In this context, a bankruptcy court will avoid the transfer of any ownership interest in the LLC to the third party, which would create a single member LLC again, and then subsequently allow the Chapter 7 Trustee to seize control of the LLC and liquidate its assets.

In closing, before transferring all personal assets to an LLC, make sure the LLC has more than one member and that all members acquired their membership interests for equitable consideration. If these steps are followed, then even in bankruptcy, an LLC can shield personal assets from individual creditors.

Randy M. Creighton, Esq.

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The federal government provided new Home Affordable Modification Program (HAMP) outreach and communication guidelines for foreclosure actions while evaluating the borrower.  These guidelines provide additional protection for delinquent borrowers who have filed bankruptcy but would otherwise be eligible for HAMP benefits. Some key highlights from the directive include:


  • The servicer must evaluate the borrower’s eligibility under HAMP and determine ineligibility before referring the borrower to foreclosure (or make “reasonable solicitation efforts”).
  • If foreclosure activity has already been initiated, the foreclosure sale cannot occur until after the servicer determines if the borrower is ineligible under HAMP (or makes “reasonable solicitation efforts”).
  • The servicer must give the borrower 30 days to respond to HAMP “Non-Approval Notices” in certain circumstances before conducting the foreclosure sale.
  • The servicer must provide, in writing, to the foreclosure attorney certification that the borrower is ineligible for HAMP before conducting the foreclosure sale.


  •  A borrower in active Chapter 7 or Chapter 13 bankruptcy or the borrower’s attorney or bankruptcy trustee can request the servicer to consider the borrower under HAMP.  The servicer can no longer decline the borrower as a “proper exercise of discretion.”
  • If the borrower has been approved on a trial loan modification and files a Chapter 7 or Chapter 13, the servicer may not deny the borrower a permanent modification simply for filing bankruptcy.  
  • If a delinquent borrower has a discharged Chapter 7 and chooses not to reaffirm, the first lien mortgage debt is still eligible under HAMP with the following provision added to the permanent modification agreement: “I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the loan documents. Based on this representation, the lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”

Homeowners struggling to make mortgage payments or feeling their lender or servicer has not worked with them on a loan modification should call a bankruptcy attorney.  For a copy of the full disclosure, see Supplemental Directive 10-02.

A Las Vegas Business Press article discusses the growing trend of lenders coming after developers for their personal holdings

Read the full story here

Four Questions To Ask A Bankruptcy Lawyer Before Signing

Should I file for bankruptcy or do I have other options?

While this question might be broad, it allows your lawyer to discuss all of your options.  Your lawyer can discuss the benefits of Chapter 7 and Chapter 13, as well as options other than bankruptcy that you may not have considered yourself.  This overview may provide you with a clearer understanding of the pros and cons of filing bankruptcy.

Who will actually be handling my case?

In some cases, the lawyer you consult with will not actually be handling your case.  It is important to know who will handle your case and also whether this person is a lawyer.  In many consumer bankruptcy “mill” practices, a non-lawyer performs the majority of the work on your case.

How much of your time is devoted to bankruptcy cases?

Though some lawyers have 20 years of experience, they may only work on two or three bankruptcy cases a year.   Therefore, they will not be as experienced as lawyers who work bankruptcy exclusively for much shorter periods of time. Bankruptcy laws have recently changed so it is important to know that your lawyer is familiar with these new laws.

How much do you charge for your services?

This might seem like an obvious question to ask initially but there are benefits to waiting until the end of the consultation.  First of all, you can evaluate all of the other services the lawyer plans to provide.  Many of the consumer bankruptcy “mills” advertise a low price but their services are very limited and exclude many of the customary services.  Thus, your fee will increase exponentially to file your case. Also, it is important to know if there are any other expenses that may be incurred during the process that may be charged to you. With a lawyer, as with so many other goods and services, you get what you pay for.

Randy M. Creighton, Esq.

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Nevada Leads the Nation in Bankruptcy Filings

Highway exit BKNew Las Vegas bankruptcy data and Nevada bankruptcy data released by the government last week details just how bad the Nevada bankruptcy situation remains. The data set paints a grim economic picture, reinforcing the need for an experienced bankruptcy lawyer to help guide you through the process at a time when Nevada bankruptcy courts are experiencing unprecedented case volume. 

In Nevada, 24,765 new consumer cases were filed in the first ten months of 2009; a 62% increase over the previous year. Specifically, over the previous year Nevada Chapter 7 bankruptcy filings increased by 75%, Nevada Chapter 13 bankruptcy filings were up 50%, and Nevada Chapter 11 bankruptcy filings increased by 38%. 

Thus, it comes as no surprise that Nevada ranks first in bankruptcy filings per capita in 2009.  The top five states for bankruptcy filings per capita in 2009 are Nevada with 10.58 per 1000 population; Tennessee at 8.52, Georgia at 7.39, Alabama at 7.35, and, 7.30 in Indiana. 

Unfortunately, the upward trend of new filings shows no sign of abating. In Nevada, there were over 2,789 new filings in October of 2009, or a 60% increase overall compared to October 2008.  This amounts to the second highest monthly total since Congress enacted the new bankruptcy laws in 2005.   With Nevada’s unemployment rate remaining over 13%, bankruptcy filings are expected to continue to increase and possibly exceed 30,000 in 2009.  

A full-service Las Vegas  law firm can help you navigate the complexities of the bankruptcy process, explain the crucial differences between different sorts of filings, and design a personalized bankruptcy legal strategy for your specific circumstances.

Randy M. Creighton, Esq.


Chapter 13 - A Law With Benefits

Many debtors choose not to file for Chapter 13 bankruptcy because it requires repayment of at least a portion of their debts. Chapter 7 bankruptcy, another option, wipes out many debts entirely.  In some cases, however, Chapter 13 bankruptcy IS the better bankruptcy option. Furthermore, certain debtors don’t get to choose because not everyone is eligible for Chapter 7 bankruptcy leaving Chapter 13 as the only option available.   Here are some good reasons to file for Chapter 13:

When You Cannot File for Chapter 7

You will not be allowed to file for Chapter 7 if you cannot meet some new requirements imposed by the 2005 revisions to the bankruptcy laws. Under these new rules, you cannot file for Chapter 7 if both of the following are true: 

  • Your current monthly income over the six months prior to your filing date is more than the median income for a household of your size in your state (go to the website of the United States Trustee,, and click “Means Testing Information” to see the median figures for your state).
  • Your disposable income, after subtracting certain expenses and monthly payments for debts you would have to repay in Chapter 13, exceeds certain limits set by law. These calculations are commonly referred to as the “means test” — if you have the means to repay a certain amount of your debt through a Chapter 13 repayment plan, you flunk the test and are ineligible for Chapter 7 bankruptcy.

The means test can get fairly complex and, to make matter worse, Congress has its own definitions of “disposable income,” “current monthly income,” “expenses,” and other important terms which, in some cases, can make your income seem higher than it actually is. 

In addition, if you have received a Chapter 7 bankruptcy discharge within the last eight years or a Chapter 13 discharge within the last six years, you may not file for Chapter 7 bankruptcy. 

When You Are Behind On Your Mortgage or Car Loan 

If you want to make up the missed payments over time and reinstate the original agreement, you can in Chapter 13 bankruptcy. You cannot do this in Chapter 7 bankruptcy. 

When You Have a Debt That Cannot be Discharged in Chapter 7 

Tax obligations, student loans, or other debts that cannot be discharged in Chapter 7 can be included in your Chapter 13 plan and paid off over time. 

When You Have a Sincere Desire to Repay Your Debts

You can benefit from the protection of the bankruptcy court if creditors are coming after you. The Chapter 13 process also provides the formal structure and deadlines that can you might find helpful in order to follow through on your good intentions. 

When You Have Nonexempt Property You Want to Keep 

When you file for Chapter 7 bankruptcy, you may keep only exempt property defined as property protected from creditors under state or federal law. You must give your nonexempt property to the bankruptcy trustee who can sell it and distribute the proceeds to your creditors. 

In Chapter 13, however, you don’t have to give up any property. Instead, you repay your debts out of your income. Therefore, if you have nonexempt property that you do not want to part with, Chapter 13 might be the better choice. 

When You Have a Co-Debtor on a Personal Debt 

If you file for Chapter 7 bankruptcy, your co-debtor will still be on the hook which means  your creditor will undoubtedly go after the co-debtor for payment. If you file for Chapter 13 bankruptcy, the creditor will leave your co-debtor alone, as long as you keep up with your bankruptcy plan payments.

Randy M. Creighton, Esq.

Bankruptcy FAQ

 1.         What is a Chapter 7 bankruptcy and/or a Chapter 13 bankruptcy?

Chapter 7 bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtors have no assets that they would lose so Chapter 7 will give that person a relatively quick “fresh start”.

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. In Chapter 13, the debtors retain ownership and possession of all of their assets, but must allocate their future income to repaying creditors, generally over a period of three to five years. The amount to repay depends on how much is earned, the amount and types of debt owed, and how much property is owned.bk

Perhaps most significantly, Chapter 13 offers homeowners an opportunity to save their homes from foreclosure. Under this chapter, homeowners can stop foreclosure proceedings and pay mortgage or car arrearages current during the next 30-60 months. This prevents the need to do so immediately to avoid foreclosure or repossession. Nevertheless, all mortgage payments are due during the Chapter 13 plan on time.

Another benefit of a Chapter 13 bankruptcy is the debtors may retain all their property that would otherwise be liquidated by a Chapter 7 bankruptcy Trustee.  

2.         If I file for bankruptcy can I keep my property?

Probably.  When you file a Chapter 7 bankruptcy you are allowed to keep certain property that is deemed “exempt,” subject to a monetary limit.  Under Nevada law, you are allowed to keep your house, car, clothing, jewelry, bank accounts, household goods, money and so on.  However, issues surrounding exemptions can be quite complex and you should discuss your case with an attorney.

If you file for Chapter 13 bankruptcy, you don’t have to hand over any of your property. Instead, you repay your debts out of your income. In exchange for keeping your property, your plan will have to pay your creditors at least the value of your nonexempt property.

3.      Can I keep my car and/or house after bankruptcy?

Probably.  Regardless of whether you file Chapter 7 or Chapter 13 bankruptcy, you are allowed to keep your car and/or home as long as the equity in such property does not exceed Nevada’s exemption limit. Equity is what the property is worth minus what you owe on it. So, if your car is worth $10,000 and you owe $5,000 on it, there is $5,000 in equity.

In Nevada, you are allowed to protect up to $550,000 of your home’s equity and $15,000 in your car’s equity.   For example, if your house is worth $200,000, and you owe $98,000 on a first mortgage and $2,000 in taxes, you would have $100,000 in equity, ($200,000 less total mortgages and liens of $100,000), and thus, be able to keep your house.

However, even if you qualify to keep your house and/or car because your equity in these properties does not exceed Nevada’s exemption limit, you can only keep them if you are current on these payments.  If you are not current, you can file Chapter 13 bankruptcy that will allow you to repay the past-due amounts over three to five years. Your lawyer will be able to guide you in this regard. 

4.      Can bankruptcy stop foreclosure?

 Yes. When you file bankruptcy an automatic stay goes into effect, which will prohibit any creditors from trying to collect the debts you owe, including a foreclosure on your home.  It’s automatic because no action is required to obtain the stay other than filing your bankruptcy petition.  

5.      Will bankruptcy stop creditors from trying to collect the debts I owe?

Yes.   Again, when you file bankruptcy the automatic stay prohibits any creditors from trying to collect the debts you owe.  Thus, a creditor cannot continue pursuing collection actions (calls to your home, work, cell phone, letters, lawsuits, and so on) after a bankruptcy case is filed.

6.      Can I stop a garnishment of my bank account or paycheck?

Yes. Almost all garnishments can be stopped with the exception of child support or spousal support obligations. Some creditors that hold claims that will not be discharged like student loans can start garnishment again as soon as your discharge is entered.

7.      How long will a Chapter 7 or a Chapter 13 bankruptcy stay on my credit report?

A Chapter 7 will stay on your credit report for 10 years from the date of filing and a Chapter 13 will stay on the credit report for 7 years from the date of filing.

8.      Will I be able to buy a car or a house after I have filed for bankruptcy?

The simple answer is yes. Most individuals will be able to purchase a car within a few months of their bankruptcy case being discharged. Therefore, a wise financial move may be to surrender a car that is upside down (meaning it has a lot of negative equity). An individual should be smart and shop around for the best offer and not accept the first car creditor’s offer that is presented to them.

In regards to purchasing a house, realtors advise waiting at least 2 years before becoming eligible to qualify for a home mortgage. However the individuals must keep their credit in good standing during this time and try to rebuild their credit by obtaining one or two debts and keep them current. Remember, a bankruptcy stays on an individual’s credit report for 10 years but does not keep one from rebuilding credit during that time.

9.      May employers or governmental agencies discriminate against someone who files bankruptcy?

No. It is illegal for either private or governmental employers to discriminate against a person as to employment due to bankruptcy. It is also illegal for local, state, or federal governmental units to discriminate against a person as to the granting of licenses, including driver’s license, permits, student loans, and similar grants because that person has filed bankruptcy.

10.  May bankruptcy eliminate my second mortgage?

Yes, but only if you file a Chapter 13 bankruptcy petition.  If you have multiple mortgages on your home and the balance on the first mortgage is greater that what your house is currently worth, your attorney can ask the court to strip away your second mortgage. Your second mortgage can then be converted to unsecured debt and included in a Chapter 13 Bankruptcy repayment plan, where at the end of the repayment period any remaining amount will be discharged.

11.  What’s a discharge?

A discharge is an order from the bankruptcy court stating that you are no longer obligated on any of the debts you listed in your bankruptcy case, therefore the creditors no longer have the right to collect those debts. In most cases, it is the reason a person files bankruptcy. In a Chapter 7 case, the court issues the discharge order about three months after the 341 hearing. In a Chapter 13 case, the court issues the discharge order about one month after you have made all the payments required under your Chapter 13 plan.

12.  Which debts are dischargeable?

If the bankruptcy court grants a discharge in your bankruptcy case, you are no longer legally obligated to pay most debts such as: 

  • credit card balances
  • deficiencies on auto repossessions
  • medical bills
  • judgments
  • personal loans.

In order for debts to be discharged, they must exist on the date the bankruptcy case was filed and be properly listed in the bankruptcy.

 In addition, creditors are prohibited from attempting to collect a debt that has been discharged. Therefore, creditors cannot contact you by mail, phone, or otherwise, file or continue a lawsuit, or attach wages or other property. It is important to understand that if a creditor has a security interest against your property (personal or real) and you are not current on those payments, they may still proceed against that security interest and try to take back possession. They may not, however, seek to collect any money from you for a debt that has been discharged.

 13.  What debts are not dischargeable in bankruptcy, or in other words, which debts will I be required to pay back regardless of bankruptcy?

 As a general rule, certain debts cannot be discharged, and thus, you are still legally obligated to pay these debts.   These include taxes (in most cases), alimony, child support, student loans, criminal fines, debts related to drunk driving, debts not listed in the bankruptcy petition, and certain debts incurred within 60 days of filing the petition.

A few exceptions to the general rule of nondischargeability exist, but they are difficult to establish and typically require a filing with the Court of, in addition to the Chapter 7 petition, a Complaint to Determine Dischargeability.  For example, 11 U.S.C.A. §523(a)(8) allows a student loan to be discharged if it is (1) not “insured or guaranteed by a governmental unit,” and not “made under any program funded in whole or in part by a governmental unit or nonprofit institution.”   A student loan may also be discharged if repaying it will “impose an undue hardship on debtor and the debtor’s dependents.”  But the “undue hardship” exception is difficult to establish.  Any questions regarding these debts should be discussed with your attorney.

 14.  How long does it take to obtain a discharge?

 In a Chapter 7 case, the court issues the discharge order about four to six months after the filing of the petition. In a Chapter 13 case, the court issues the discharge order about one month after you have made all the payments required under your Chapter 13 plan.

15.  Will bankruptcy affect my spouse?

Your spouse will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. If they have a supplemental credit card they are probably responsible for that debt. However, in community property states, such as Nevada, either spouse can incur a debt without the other spouse’s signature on anything, and still obligate the marital community. There are a few exceptions to that rule. For instance the purchase or sale of real estate requires both spouses’ signatures on contracts. But the day to day debts, such as credit cards, do NOT require both spouses to have signed.

 Your lawyer will be able to guide you in this regard.

16.  I am a co-signer for a debt. How does bankruptcy affect my obligation?

If the debt is primarily your debt, then you must provide for payment under your Chapter 13 plan. If the debt is primarily the debt of the person with whom you co-signed, then you may provide for payment of the debt under your Chapter 13 plan. If your plan does not provide for full payment of the co-signed debt, the creditor could get permission from the Court to collect the debt from the co-debtor. While you are in Chapter 13, and if your plan provides for full payment of the debt, the co-debtor is protected against collection efforts outside the Court.

17.  Will I have to go to court?

In a Chapter 7 bankruptcy case, you generally would not have to appear in court. Debtors are required to attend a creditors’ meeting at the Trustee’s office, during which the Trustee and creditors can ask the debtor questions regarding their finances.  In a Chapter 13 bankruptcy case, there is a plan confirmation hearing that is also required.

Randy Creighton, Esq.