Black & LoBello on AM720 KDWN

Tune in as Black & LoBello offers free legal advice on a wide range of topicsClick here to listen to the Legal Hour on KDWN AM720 from February 1st, 2012 in which Managing Partner, Tisha Black Chernine, Esq., hosts special guest Mark Stark, CEO and Owner Broker of Prudential Americana Group of Realtors. Ms. Chernine and Mr. Stark discuss the good and bad aspects of the real estate market  in 2011 (3:10), how AB 284 affects the available real estate inventory (7:42), how to find a real estate agent with experience in short sales (12:25), real estate debt obligations in a marriage (22:05), the current state of the real estate industry (24:16), the likelihood of banks to sue for a deficiency (32:54), the areas of the Vegas valley hardest hit by the housing crisis and the benefits of buying a property in the current economy (37:50).

Please tune in to AM720 KDWN’s “Legal Hour,” everyday, 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.

Randy M. Creighton, Esq., of Black & LoBello explains what you should know before you try to get rid of your second mortgage by declaring Chapter 13 bankruptcy in the state of Nevada.

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The Nevada Legislature has enacted a very powerful statute designed to provide support to surviving spouses and minor children when the gross estate is less than $100,000 (after deducting encumbrances) and avoid paying most, if not all creditors.  NRS 146.070 provides that if a person dies with a spouse and no children, leaving a gross estate less than $100,000, the entire estate must  be set aside for the support of the surviving spouse.  The statute operates similarly for the support of a minor child in the event the decedent is not married and leaves only a minor child or children.  This statute directs the decedent’s inheritance to the surviving spouse or minor children even if the decedent left a will leaving the estate to someone else.

This statute can allow heirs to avoid a long and costly probate process in the event that a proper estate plan is not implemented or assets are not titled appropriately at death.  This statute can also be utilized by surviving spouses and guardians of minor heirs to avoid having to satisfy creditors such as credit cards, hospital bills, and other non-secured debt.

For example, if a married person with no minor children dies leaving a house titled solely in the decedent’s name, the value of which is $400,000, but has an encumbrance of $210,000, and the asset is community property, the equity in the house is $190,000, however only 50% of the value is subject to probate.  Therefore, the net estate is only $95,000.  Even if the decedent had $100,000 in separate debt such as student loans, NRS 146.070 provides that the entire estate, i.e. the entire house and all of the equity therein, shall be set aside for the support of the surviving spouse.

By utilizing Nevada’s community property laws and applying Nevada’s support statute in concert, even when an estate initially appears substantial, and probate seems unavoidable, surviving spouses can avoid lengthy and costly probate proceedings and minor children of the decedent can receive the support intended by the Nevada Legislature.  This is yet another benefit in establishing residency in Nevada for estate and tax planning purposes.

Christopher J. Phillips, Esq.

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Despite the mortgage industry’s recent decline in fraud risk, CoreLogic reports that 1 in 200 home loans still contain misrepresentations that could result in default.  Short sales have also become an area of concern due to their growing popularity as a preferred foreclosure alternative.   CoreLogic reports that short sale volume from the first quarter of 2008 through the fourth quarter of 2009 increased by more than 300 percent.  Nearly 1 in every 200 short sales were deemed “very suspicious” by lenders, meaning there was a new sale transaction less than 60 days after the short sale and the sale price was more than 20 percent higher than the short sale price.  Lenders identified income misrepresentation as the most common type of fraud, followed by internal fraud.  Also ranking high were falsifications related to borrower identity, occupancy, and the property itself.

Joshua D. Carlson, Esq.

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What Is A Trust?

A trust is an agreement that provides for the management of property and involves at least three parties:

  • The Trust Maker, sometimes referred to as the settler or grantor, is the person who creates the terms or rules of the trust;
  • The Trustee is the person who agrees to accept the Trust Maker’s property and manage it as directed by the trust, and;
  • The Beneficiary is the person who receives the benefit of the property held in the trust.

Typically, this is the Trust Maker during his lifetime and the children of the Trust Maker when the trust terminates.

The Revocable Living Trust Document

A Revocable Living Trust (RLT) is a trust document created during the Trust Maker’s lifetime. An RLT is often referred to as an inter vivos trust, which means during life. The trust is revocable due to the Trust Maker’s ability to terminate and amend the trust.

The Trust Maker generally names himself/herself as the Trustee and the beneficiary of the trust while still alive. The Trust Maker also names Trustees to act for his/her benefit in the event of disability or death to manage the assets of the trust following the Trust Maker’s death. Typically the Trustee is also charged with the responsibility of settling the obligations of the trust and distribution to the beneficiaries.

Funding The Trust

After executing a revocable living trust, the Trust Maker then needs to fund the trust. Funding is the process through which the individually-owned assets of the Trust Maker are titled and transferred into the trust. If assets are not placed into the trust, the Trustee lacks authority to manage the assets, since the Trustee only has authority with respect to assets contained within the trust.

In Community Property states, such as Nevada, married couples can create a joint revocable living trust. The married couple will each re-title their property into the name of their trust, which creates a funded trust.

Re-titling is performed in different fashions for different assets. For example, a checking account held in the name of John and Mary Sample will be funded into the Sample’s Revocable Living Trust by re-titling it as John Sample and Mary Sample, Trustees of the Sample Living Trust dated (the date the trust is signed.)

A similar action will be taken in regard to all of their other assets, such as real estate, automobiles, boats, investment accounts, securities, and any other asset with a title. Assets that do not have titles will be transferred into the trust by an assignment of personal property. An assignment of personal property is a document, which demonstrates the Trust Maker’s intention to transfer all of property without title into his/her revocable living trust.

Once the revocable living trust has been funded, it will control all of the assets in its name. Inversely, a trust will not control assets not titled in its name. A well drafted revocable living trust will not only include direction on how to manage property, but also give instructions for how the Trust Maker or the Trust Maker’s family and loved ones are to receive the benefits of the trust. The trust also makes provisions for how the Trust Maker is to be cared for in the case of the Trust Maker’s disability and/or death.

A well-written living trust document will outline the Trust Maker’s financial and personal intentions, be clear in its directives and be protectively locked within the law.

Tiffany N. Ballenger, Esq.

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Everyone who wants to accomplish complete estate planning objectives should consider and implement a living trust-centered plan. A living trust-centered plan is the only type of estate planning that can meet all of the elements of our “definition” of effective estate planning.

Black & LoBello’s definition of effective estate planning:

  • I want to control my property while I am alive.
  • I want to take care of myself and my loved ones if I become disabled.
  • I want to give what I have to whom I want, the way I want, and when I want.
  • If I can, I want to save every last tax dollar, professional fee, and court cost possible.

Probate in Nevada starts when you have $20,000 or more in your name which is not much.  For this reason alone, many people should consider a living trust-based model for their estate planning needs.

Reason One: Control

The most important element of Black & LoBello’s definition of estate planning is control. The most important step to gain control of your assets is to create an effective estate plan. If you do not write your own plan, the state will write it for you.

If you die without an estate plan, you are deemed to have died intestate. In this case, state laws direct how your assets are to be inventoried, valued, and distributed. If you should become incapacitated without affecting formal planning for that event, there is another set of states laws that directs what will happen to you and your property.

State laws also control other aspects of one’s life and property. For example, joint tenancy property may be tied up in the courts if one of the joint tenants becomes incapacitated or if there are creditor problems. To exercise estate-planning control, you must take responsible action to implement and use your own estate plan to dictate your wishes, rather than leaving it to the state.

Reason Two: Incapacity

After control, the definition of estate planning addresses incapacity. Statistics show that the odds of suffering a debilitating mental or physical disability are about six times greater than the odds of dying. Because of the great risk of incapacity it is imperative to plan for such a life-changing event.

Through proper and effective planning, you can control how you are cared for during incapacity. Additionally, you may purchase long-term health care and/or disability insurance or implement savings plans. It is also possible to leave instructions about physical care in the event of incapacity.

Estate plans can succinctly direct how property and money should be used for the incapacitated and your loved ones, thereby overruling the state laws. In order to exercise this control, one must do so while still competent.

Reason Three: Giving Your Property to Whom You Want

After you have controlled your property while you are alive, and have planned for your incapacity, you can look forward to giving your property to others at a time or times of your choosing. The trust maker is able to transfer property during life as well as at death through the use of an effective trust plan. Nevada law allows the trust maker to control his property, and to pass it in the manner he chooses to the beneficiaries with amazing latitude and flexibility. However, you must initiate the process while still capable to do so.

Reason Four: Planning for Taxes and Expenses

The final part of Black & LoBello’s definition of estate planning addresses taxes, fees, and costs. One of the most famous quotations about taxes comes from Judge Learned Hand who wrote:

“Anyone may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” (Gregory v. Helvering, 69-F.2d 809)

While saving on taxes and expenses is an important aspect to effective estate planning, be assured that Black & LoBello will not recommend actions that will compromise the first goal of maintaining control. Even if you do not have a taxable estate, probate costs can run anywhere from between three to twelve percent of the GROSS value of your estate.  The secret of good planning is to reduce taxes and costs while always retaining control.

Tiffany N. Ballenger, 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.




The information contained on this website is designed to enable you to learn more about the services that Black & LoBello offers to its clients. These materials do not, and are not intended to, constitute legal advice, nor are they intended as a source of advertising or solicitation. Your use of this website does not create or constitute an attorney-client relationship. You should not consider these materials to be an invitation for an attorney-client relationship. Further, you should not rely on the information provided on this website without first obtaining separate legal advice.

Tisha Black Chernine awarded for
Mountain States Rising Stars 2011

Michele T. LoBello awarded for 
Nevada Super Lawyers 2007

Black & LoBello is an AV® Preeminent rated, locally owned, full service law firm in Las Vegas, Nevada.