Tracking Down a Tax Lien

Question: My credit report shows a tax lien filed in 1999. I believe this lien is for taxes resulting from the sale of property on which I was a co-owner. There is no information on the exact amount of the original tax or the resulting penalties. It would appear that all California tax amnesty programs have expired. How can the I discover the breakdown of the current amount showing on the credit report and identify options for clearing of the lien?

Answer: Taxing agencies typically do not report directly the credit bureaus, so this lien must have turned up because of a public records search. This probably means that the tax lien was recorded in the county where the property that you sold was located.

You should be able to contact the county recorder's office or a title insurance company to get a copy of the lien. In some counties, the recorder's office may have an online search that would allow you track down the lien down yourself. Some, like the San Diego County Recorder's Office, allow you to order the documents online directly from them. Alternatively, most title companies will give you a copy for free as a customer courtesy.

The lien should have the name and address of the agency that levied the tax. Once you have this information, the taxing agency should be able to track down your file and tell you what you need to pay in order to settle this debt.

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.

LLC Statement of Information

Question: I understand that California requires a description of the general type of business being conducted for an LLC. Can more than one type of business activity be entered for one LLC? Can one business have independent business activities?

Answer: You are probably referring to a Statement of Information. Every LLC registered in California must file a Statement of Information with the of of the California Secretary of State. The LLC must file this form within 90 days of first registering within in California and biennially thereafter.

The Statement of Information is a public disclosure of information regarding the name and address of the agent for service of process, the street address of its principal executive office, the name and complete business or residence addresses of any manager or managers and the general type of business that constitutes the principal business activity of the limited liability company. You should only list one line of business business type even if the LLC has multiple types of business activities. Although LLCs in California cannot engage in certain types of business activities such as contracting or the practice of law, there is no limit on the number of businesses an LLC may operate.

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 Fraud Alert: www.raredvds.tv

With the assistance of attorney Carl H. Starrett II, Special Investigations Agency ("SIA") is conducting an investigation into the Internet website http://www.raredvds.tv/ for fraudulently selling bootleg copies of American television programs.

In one reported case, a customer ordered the entire TV series called Coach on DVD from this website. Although the merchandise was supposedly in stock when the order was placed in November 2006, the DVDs did not arrive until January 14, 2006 and the customer's credit card was charged long before the order shipped. Instead of shipping the order via UPS as advertised on its website, they shipped the order via Canadian mail.

Raredvds.tv makes the claim that "All our products are official copies". However, the merchandise delivered actually consisted of low quality recordings from the USA Network. The labels also appeared to have been printing on an ink jet style printer. Others consumers have reported similar experiences to worldwide consumer reporting website called Ripoffreport.com. Click here to see reports from consumers who have been ripped off by Raredvds.tv. Legal action is being contemplated.

Internet fraud is becoming increasingly common. The FBI offers the following tips to avoid fraud when making purchases online:

• Make sure you are purchasing merchandise from a reputable source.
• Do your homework on the individual or company to ensure that they are legitimate.
• Try to obtain a physical address rather than merely a post office box and a phone number, call the seller to see if the number is correct and working.
• Send them e-mail to see if they have an active e-mail address and be wary of sellers who use free e-mail services where a credit card wasn’t required to open the account.
• Consider not purchasing from sellers who won't provide you with this type of information.
• Check with the Better Business Bureau from the seller’s area.
• Check out other web sites regarding this person/company.
• Don’t judge a person/company by their web site.
• Be cautious when responding to special offers (especially through unsolicited e-mail).
• Be cautious when dealing with individuals/companies from outside your own country.
• Inquire about returns and warranties.
• The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong.
• Make sure the transaction is secure when you electronically send your credit card numbers.
• Consider utilizing an escrow or alternate payment service.

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.

Quick Claim Deed or Quitclaim Deed?

Question: I live in California. What is a quick claim deed?

Answer: There is no such thing as a "quick claim" deed in California. The actual name is "quitclaim" and it basically means that the grantor is giving up his or her claim, if any, in the property to someone else.

In California, most deeds will fall into one of two classifications: (1) the grant deed; and (2) the quitclaim deed. The grantor of a grant deed is basically stating that he or she has good title to the property described in the deed. A grantor using a quitclaim deed is basically surrendering whatever interest he or she might have in the property without any type of guarantee that he or she even has an interest in the property.

Quitclaim deeds are often used when the seller is not sure of his or her exact interest in the property. Grant deeds are used when the seller is confident of his or claim claim to title. Title companies generally will not insure title on a home purchase unless a grant deed is used. Grant deeds are sometimes called warranty deeds in other states.

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.

Cabinets and Contractors

Question: I am a small (1 man) contractor that builds bookcases and other wood products. I do not have a contractor's license and what is my defense if I am charged with not having a license?

Answer: Your defense really depends on exactly what services you are providing and how much you are charging. Anybody can build cabinets or other types of wood products and even deliver the products to a jobsite without needing a contractor's license. Installation of the products is generally what triggers the need for a license.

In California, anyone who contracts to perform work that is valued at $500 or more for materials and labor must hold a current, valid license from the Contractors State License Board in the specialty for which he or she is contracting. If a handyman charges $499 to build and install a cabinet, no license is required.

The proverbial devil is in the details. If you perform work that requires a license, you've commmitted a crime and have no right to payment. More informatino is required in order to determine if the work you do requires a license.

If you are unsure regarding whether your business activities require a contractor's license in California, please click here to email us or call use at (619) 448-2129 for further assistance.

About the Author: Lisa F. Starrett has been a certified paralegal since 1993 and has more than 12 years of experience in human resources and recruiting. As a paralegal with the Law Offices of Carl H. Starrett II, she works in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

Preventing Identify Theft

This useful public service announcement from Broward County Sheriff's Department in Florida shares some very useful information regarding the prevention of identify theft:

For more information in the prevention of identity theft, the U.S. Postal Services offers a free DVD with more tips on how to protect your identity. Click here to order your copy.

Credit Card Usage Prior to Bankruptcy

I strongly recommend to debtors that they should not use their credit cards during the 90 days prior to filing for bankruptcy, or longer if possible. Bankruptcy law allows a credit card company to object to you receiving a discharge of that debt if they can prove the debt was incurred fraudulently. Consumer debts owed to a single credit card company totaling more than $500 for luxury goods or services that were incurred within 90 days before the bankruptcy filing date are presumed to be fraudulent if the creditor files legal action to object to you receiving a discharge of these debts. The same presumption of fraud exists for cash advances totaling $750 or more during the 70 day period prior to the bankruptcy filing date.

Your right to receive a discharge could be vulnerable even if the purchases were made outside of the 90-day pre-filing period. The use of a credit card at a time when the debtor knew or should have known that he or she could not repay their debt can be considered as evidence that the debt was fraudulently occurred. Purchases made after retaining legal counsel would be particularly scrutinized.

I generally request 3 to 4 months of credit card statements for two reasons: (1) to verify the correct address to notify the creditor of the bankruptcy; and (2) to warn clients about potential problems. Most attorneys do not including the cost of defending clients against adversary proceedings filed by creditors in the basic fee agreement. The best policy is for the debtor to stop using any credit cards as part of the preparation for the filing of the bankruptcy.

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.

Limitations on Wage Garnishments

Question: In California, what percentage of income is taken from your paycheck when your wages are garnished for credit card debt?

Answer: In order to garnish your wages, a creditor must first sue you and obtain a money judgment. After that, the creditor can initiate a wage garnishment. Click here for more information on the procedures to start a wage garnishment in California. A judgment for credit card debt is given no special priority over judgments for other types of debts.

Under California Code of Civil Procedure § 704.070, 75% of your income is automatically exempt from the wage garnishment. The Sheriff’s department will serve your employer with an Earnings Withholding Order (“EWO”) that will instruct the human resources department on how much to withhold from your paycheck. Your employer must provide you a copy of the EWO and the Employee’s Instructions within 10 days after service on your employer by the Sheriff’s Department.

The Employee’s Instructions will contain information on your rights and duties with respect to the garnishment. If you wish to challenge the garnishment for some reason such as needing all of your income to pay rent or other necessities, you will receive instructions on how to file a Claim of Exemption.

We offer both debt collection and bankruptcy services throughout California. Whether you are a creditor seeking to start a wage garnishment or a consumer hoping to stop one, please click here to contact us 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.

CalChamber Releases List of New Laws Affecting Businesses in 2007

The California Chamber of Commerce has released a brief summary of new legislation that will impact California businesses in 2007. Click here to read the full article.

The new laws cover a wide range of topics from worker's compensation insurance to cell phone safety. Other new laws address diverse topics such as work place safety and a minimum wage increase.

Click here to email use or call us at (619) 448-2129 if you desire any more information about new laws effecting California businesses in the new year.

New Contractors State License Board Publication Highlights Information Required in All Contracts

Sacramento –- The Contractors State License Board (CSLB) is pleased to announce that its newest publication, Contracting for Success - A Contractor's Guide to Home Improvement Contracts, is now available. The 24-page booklet guides contractors through all the elements that are required to be in home improvement contracts, and in service and repair contracts.

"For years it's been difficult for our licensees to know for sure what to include in their contracts," said Michael Brown, CSLB's Chief of Legislation. "We've worked hard with the state legislature to consolidate the rules so that they're all under one section of law. This booklet spells out those rules in a straight-forward manner."

A contract is one of the most important tools a contractor uses to have a successful business. A well written contract can help open the lines of communication between the contractor and consumer. A badly written contract can quickly lead to miscommunication and misunderstandings; problems that could land the contractor in court or under investigation by the CSLB.

Among the topics covered in the new booklet:
Putting the Contract Together
Description of Work to be Done
Progress Payment Schedules
Notifications and Disclosure Statements
Change Orders
Right to Cancel Contract
Common Problems with Home Improvement Contracts

"Contractors need to take the steps necessary to make sure their contracts are legal," said Matt Kelly, CSLB Chair. "This publication gives them the tools to just that." The booklet also outlines requirements for newly created Service and Repair contracts. As the name implies, these are contracts for situations where licensees go to a consumer's home for the purpose of servicing or making repairs. Service and Repair contracts are only good for projects that are $750 or less; when the consumer initiated contact with the contractor to request the work; when the contractor does not sell the consumer goods or services beyond those reasonably necessary to take care of the problem; and when no payment is due until the work is completed.

"The CSLB owes a debt of thanks to members of the construction industry," said Kelly. "Not only did they help us identify and develop the needed changes, they worked to make sure lawmakers understood the importance of these changes." The CSLB publishes about two dozen different publications. While many publications help consumers through the construction process, others are geared towards contractors or those interested in getting their license. With the exception of the License Law and Reference Book, all CSLB publications are available free of charge. To order, simply fill out the order form and fax it to the CSLB's Public Affairs Office, or click here.

New Insurance Requirements for California Roofing Contractors

New insurance requirements are now in effect for 6,000 licensed roofing contractors in California. Beginning January 1, 2007, all active licensees holding the Roofing (C-39) classification must have either a valid Certification of Workers' Compensation Insurance or a valid Certification of Self-Insurance on file with the Contractors State License Board (CSLB). Recent legislation amended Section 7125 of the Business and Professions Code to require that all Roofing (C-39) contractors carry workers' compensation coverage effective January 1, 2007, regardless of whether or not they have employees. Failure to have one of the required certifications on file with the CSLB will result in:

• The removal of the Roofing (C-39) classification from a license with multiple classifications; or
• The suspension of a license where the sole classification is the Roofing (C-39) classification

No exemptions to the Workers' Compensation Insurance requirement will be granted effective January 1, 2007. Inactive Roofing (C-39) contractors will not be subject to this requirement as long as the license remains inactive. In order to return to active status, they would need to have one of the required certifications on file with the Board.

The new all also requires insurers who issue workers' compensation insurance to Roofing (C-39) contractors to perform an annual payroll audit for the contractor. The insurer may impose a surcharge on the policyholder for the audit. The new workers' compensation insurance requirements imposed by AB 881 will remain in effect until January 1, 2011.