Friday, November 27, 2009

Basic Steps to Obtaining Green Card-Legally!

1. Get your credentials evaluated. First and foremost step is to get your credentials evaluated. This is the foundational question that needs to be answered- what is your qualification for a certain immigration category and whether you meet the US equivalency or other are qualified for it or not. For example if you are going to get H1b work visa status, your education must be equivalent to US college degree (B.S. degree). If you did not get equivalency to B.S. degree, then instead of filing for work visa perhaps you will need to enroll as student to complete the number of units required to get B. S. degree. And a student visa will be required.

Similarly, if you are filing for L-1 category, your should have, at minimum, worked for the company overseas for at least one year out of last years and a certain business relationship must exist between the international company and US business-among other things. If you do not meet the criteria for L1, however, if you are a national of one the countries which has treaty with the U. S., you might qualify for E-1 visa.

If you don’t meet the criteria, no matter what, you won’t qualify and will hope against hope. You will end up wasting your time and perhaps life. I have seen too many individuals being led to believe that they qualify and they end up filing wrong petitions and paperwork and eventually suffering by getting out of status.

2. Consult an Immigration lawyer. An Immigration lawyer is a specialist in this arena just like any other lawyer or professional. Most of the problems work visa holders is that they rely on co-workers, inexperienced employers or generic information on internet. “My cousin got the visa. Why can’t I get it” or “Let us make some resume up”-kind of mentality can lead you in trouble so an X-ray and the right advise by an Immigration Lawyer would go a long way.

Be prepared to meet the attorney in person. There is lot to be said about meeting someone in person, looking them in the eye and having undivided attention. Be prepared to pay a consultation fees if you want some respect and real attention. It shows your commitment to the process and respect for the professional’s time and experience. You will get the same respect and attention back. Do you like when you get paid, so do the attorneys!

3. Find a qualified employer. Once you know which visa category you will qualify in, then act accordingly and find an employer who is willing to sponsor you and meets the criteria. An employer has to be a qualified employer as well. For example, these days IT consulting companies are not doing well because of downturn in economy and are under high scrutiny. Immigration Agency is investigating about 25,000 of company which typically hire H1b workers to investigate fraud. So, if you are an IT professional, for example, seek an employer who has been in business for a little bit, has good business model (product or service), can provide financial standing and meets the other true business indices. If you are doing MS in Education, you might qualify to work for school or other such non-profit agency.

4. Get the visa and obey the law and rules. Once the visa petition is filed and approved, understand the rules and obey them. A non immigrant visa worker is typically eager to please the employer. The employer sometimes can be eager to save money and cost or make the employer work overtime without paying overtime.

There are several cultural issues which can make an employee feel intimidated. Know your rights and stand your rights. This is United States of America, not a third world country. Stand your ground.

If you or the employer break the law, both will land in trouble. For example, if you are an H1b visa worker and do not get paid regularly or are on “bench”, you are breaking the law and consequences can be serious. Similarly, an employee not providing sufficient breaks or paying employee overtime will be found violating the labor laws. Fines are hefty and can range from denial of green card petition, having to wait out of US for green card for number of years to monetary fines to jail time. Is it worth it?

5. Plan ahead for the next step. Know your goal. If you goal is to work temporarily and return to your country after sometime, that is fine. However, if your goal is to get green card, then you need to plan ahead. Know the processing time for visa petition type you will qualify under. Most people keep hopping jobs until last year of work visa. During the last year or so, they try to find an employer who can sponsor for green card and end up missing filing deadlines which would enable to them to extend the visa. It is extremely difficult to return to your home country after you have been here for a while.

A change in economy overall or financial and business conditions of employer can also result in a predicament. For example, if someone starts ahead of time in green card application through the employer, he or she can obtain 3 year visa extension on H1b while waiting for green card final step as contrasted with someone else who will have to get yearly extensions.

None of the factors I have stated are rocket -cience. I am stating the obvious. However, most people don’t want to know the simple truth. People get desperate and they go down this unending cycle of false hope, lies on immigration paperwork risking their peace and freedom. Please be realistic and follow the law.

Thursday, November 26, 2009

Can lender come after the Borrower for deficiency in a foreclosure?

Most people think that their liability is limited by the security interest and if property is foreclosed they are not liable. This articles intends to clarify the (mis)understanding.
The answer is- depends. It is not a lawyer like answer. The answer really depends on whether the loan the lender had given on the property being foreclosed was a purchase money loan or a refinance loan.

If the loan the lender had given against the property was a purchase money loan, the anti-deficiency laws prevent the lender from being able to file a lawsuit for the deficiency.

However, if the loan the lender had given against the property was a refinance loan, the anti-deficiency laws allow the lender to file a lawsuit for the deficiency.

The logic is that in a refinanced loan, the borrower was able to find better loan terms or perhaps took the equity out and used it to his or her benefit. So, there is a presumption of added benefit thus allowing lenders to recover the deficiency amount.

The deficiency amount is the difference between the loan amount and amount of money recovered by the lender after foreclosure.

Purchase money loan is the original loan obtained by the borrower at the time of purchase of the property.

Refinance loan is the loan obtained by refinancing the loan to get better loan terms (interest rate, amortization period, etc.) or to take cash out for personal use or to pay off other debts.

Lot of people bought the property to get their foot in the door and got a low interest rate, mostly negative amortization loan. Later, they refinanced the loan when the property went up in value. It was easier. Lenders did not care because it is profitable business. Lenders, loan brokers, appraisers, escrow companies-everybody made money. Now, these people, if facing foreclosure, can be liable for the deficiency amount.

Lot of people know about One Action Rule and think that lender can not bring claim for deficiency. One Action rule is provision of law under California Code of Civil Procedure. Basically, it forces a lender to choose between foreclosure and judicial action which combines foreclosure and deficiency judgment. So, as the name suggest, lender has to decide which (one) form the lender will chose.

The primary method of foreclosure in California involves what is known as non-judicial foreclosure. This type of foreclosure does not involve court action. If a foreclosure is completed by non-judicial means, a second action to recover a deficiency judgment is not permitted. However, rules stated above apply under the case law that if the loan is refinance loan, the deficiency action can be brought. Most lenders will negotiate the amount though and settle for less. This can be an opportunity to negotiate the debt down.

Sunday, November 22, 2009

Plan your Affairs-simple ways to avoid Legal fees, taxes and Legal costs

Legal fees are incurred when attorney gets involved or a matter has to be handled in court. Typical example is Will-contest or probate fees (attorneys fees and court fees) in Probate Court.
Taxes are incurred when someone has poor estate tax planning or no estate tax planning. Estate taxes are due nine (9) months after the death and have to paid in cash. No installments. The Estate Tax is a tax on your right to transfer property at your death. Assets have to be sold at the value they can fetch in “fire-sale”.
Legal costs such as probate fees etc. again are incurred when there is poor or no estate planning.
Here are some of the simple ways to avoid legal fees, costs and taxes (estate taxes or gift taxes).
1.       Do not die without a will. At least have a will. No will (for estate worth $100,000 or more) = Probate-for sure. Even a will does not avoid probate but it can give some direction to probate court and help move things along much faster. Something is better than nothing.
2.       Take benefit of tax laws and codes which allow lot of tax savings and cost savings by forming revocable living trust. Revocable Living Trust allows one to take benefit of federal unified tax credit system and save money on legal fees and costs. It also ensures privacy.
3.       Write out your health care and financial affairs power of attorneys which will help deal with your affairs in the event of a disability rendering you incapable of handling your own affairs. Designate someone who is capable of handling the affairs properly. Base your designation and appointment of your agent on competency and not emotion.
4.       Title your accounts properly. If you have a checking account with your son or daughter and there is not much money in the same account, designate it as payable upon death to make the transfer easier.
5.       Give gifts. Of course, everybody cannot or does not need to give gifts; however, gift tax planning is definitely required for individuals with large estates to take benefit of unified tax credit system. Proper gifting on annual basis can go a long way.
6.       In the event of a business, make sure to properly insure it and have provisions of its continuity. This is critical in the case of partnerships, for example, to express your desire about how the business will continue in the event of one partner’s death. Buy-sell agreements or 2nd to die policies are great way to make up for the loss and ensure smooth continuity of the business.
7.       Benefit from Asset Protection strategies to avoid lawsuits or potential liability.

What is Probate-the basics.

Probate is the Court-administered process which facilitates the transfer of assets of deceased (someone who died) to his or her beneficiaries/next of kin. In California, if the assets owned by deceased are $100,000 or above. The assets subject to probate are those which are not subject to right of survivorship or transferable upon death. A typical example of assets transferable under right of survivorship is real estate owned as community property or joint tenants. An example of property transferable upon death is Payable on Death bank accounts.

So, if someone dies with a property owned as joint tenant and a POD bank account, there will be no probate. This avoids probate but there are other estate tax and income tax related consequences which render these methods expensive later on (higher tax consequences).

Purpose of the probate is for the court to take an inventory of all the assets owned by the deceased, make sure that all creditors are paid, handle any and all challenges to will (if any), and then transfer the balance to the persons named in the Will or if there is no will, to transfer the property to lawful heirs under Probate Code.

So, in reality, if someone has a Will and has assets over $100,000 in assets, the estate will go through probate.

Similarly, if someone dies without a Will, and has assets over $100,000 in assets, the estate will go through probate.

Thursday, November 19, 2009

How to divide interest in new business!

I was consulted by two friends who wished to start a business. They wished to get legal advice on what is the best form of business (benefits of corporation versus sole proprietorship, etc.), lease issues, personal liability of individuals to the lenders in case of default on business loan, hiring and firing of employees, etc. I was impressed with these people. One client had all the questions on his iPhone- putting technology to use. Lot of thought seems to go in the process which is a great sign of business planning.

One of the questions which was most interesting was-how to divide the interest. Both partners were putting in equal amount of money but one partner was going to work in the business and take care of the technical side as well as day-to-day management related issues. The working partner wanted a higher interest as well as a monthly compensation once the business reached a certain level of revenue. The investing partner wanted to know if such division of business equity was fair and reasonable. Specific question was what is the norm?

There is no particular norm in the industry for division of equity or share. I feel it is all negotiable. It just depends on what value is placed on money invested, work done, product created or service rendered and result obtained.

However, it is a great idea to talk about these things before hand to avoid future problems. Someone who is going to work in the business will naturally take most of the credit as person is using his technical and management skills based on previous experience. The investing partner is bringing in the money.

It is interesting to note that even though the money is important to run any business, the things change drastically when someone starts to value his own skills more than the money. If money is not there, the business won't start, however, if the business person is not there to manage functions skillfully then the business will not continue. It is classic "chicken or the egg first?" kind of situation.

What I felt was that the partners had the following choices:

1.      Acknowledge that money is important. And that personal credit is being used to qualify for business loan. Bank is requiring personal guarantee. Question becomes how is providing such guarantee!
2.      The working partner is contributing his business, technical and management skills.
3.      Either divide equally and pay the working partner a certain reasonable monthly amount as Manager. Or give the working partner a little bit higher interest (share) based on his skill if the business can not afford to pay the monthly amount.
4.    Loan money the friend/wanna-be-working partner at a market interest rate and be satisfied with the return.

5.      And lastly, walk away from the venture. My logic was that working partner might adjust the interest currently based on business or financial need. However, if working partner already views his experience and skill as more valuable and worth higher interest plus monthly salary, then at later stage, once the business starts to flourish, it might create more problems and might lead to a rift and breakage in relationship and smooth functioning of business.

Good thing is that at least these people are talking about it and discussing it before hand. I am sure based on their relationship, they will be able to reach a happy medium and do well in the business. I certainly wish them well.

Corporate Governance

Modern corporations are moving towards a progressive era of shareholder franchise which was a myth till yester years. The biggest questions that come to the fore when discussing corporations’ role is that of corporate governance: how companies are run internally and what rules they will play by in the external world. In a narrow sense, good corporate governance means shareholders realize value and boards of directors have an easier time fulfilling their fiduciary duties. More broadly, corporate governance is about the principles that underlie democracy: transparency, checks and balances, and accountability. Good corporate governance means that businesses recognize the duties that correspond to the privileges that society has granted them: favorable tax treatment, limited liability, and so forth.

I, as an attorney, contribute by being part of a corporation’s professional legal team by advising on what measures you need to take to comply with the modern day corporate governance practices; to legally protect the corporation, directors and officers from shareholder derivative litigation and take care of all legal compliances which the stock exchanges have made mandatory compliance for all public companies listed and trading. Smooth flow of capital, investor faith and reliance on the corporate machinery also directly depends upon good corporate governance structure where the present course of action would be governance restructuring to provide transparency, checks and balances in the functioning of any modern day corporation and create a competitive, fair and ethical corporate climate.

Here forth is set a list of best governance practices which should be incorporated in the articles of incorporation and to be used as a governance constitution which cannot be modified without shareholders consent and leverage given to the Board of Directors for business oversight:

• Checks and Balances - Transparencies in conduct of corporate affairs.
• Active, Informed and Independent Board.
• Role and duties of Board of Directors in compliance with governance standards.
• Nomination of Directorial candidates and Election Process –CEO selection and succession planning as well as electronic “town hall” system to facilitate proposed shareholder resolutions.
• Specific and Active Board Committees – Audit Comm., Governance Comm., Compensation Comm., Risk Management Comm. with independent directors heading them.
• Term limits and Auditor rotation.
• Compensation limits.
• Equity Compensation Programs.
• Legal Compliance - Enhanced Legal Department and Ethics Program.
• Performance Monitoring.
• Non Executive Chairman of the Board of Directors who will be coordinating Board’s work, chairing meetings, organizing CEO and Board Performance audits.

Monday, November 16, 2009

What is Estate Planning? and more!!

"I want to control my property while I am alive and well, care for myself and my loved ones if I become disabled, and be able to give what I have to whom I want, the way I want, and when I want, and, if I can, I want to save every last tax dollar, attorney fees, and court cost possible."

(Courtesy, Generations by Esperti and Peterson). Definition adopted by NNEPA.

Point is make decisions and plans while you can-when you are alive and well.

My wife is leaving for India for two weeks. I will here with our two kids. She started to tell me what to do. I asked her to write everything down. So, now I have notes from kids' doctors to how to make a dish (so-called recipe) to the kids' menu for breakfast to dinner. It helps to have written instructions!

How would the world know what you want or should I say wanted if something happens to you!!

Friday, November 13, 2009

Starting a Business-Issues to Consider

So, you have decided to start your own Business. My first advice would be to read The E-Myth Revisited by Michael Gerber.
Secondly, how you run your business is your business. I, as an attorney, can contribute by being part of your professional team by advising on what measures you need to take to comply with the law and also to legally protect yourself.
So, if you are confused about which business licensing department to visit first or which corporate form to select or what paperwork you need to open your bank accounts, don't worry. Most new business owners are. You just need to make sure that you either have the time to do the research and no money or that you want to do it right and hire the right professional to help you with the process.
Typical issues are:
Licensing. City, County, State licenses and registrations. Make sure to comply with the City, County or State requirements. For example, if you are going to be conducting the business in your name alone and working from home, you still need to register the business with the city and obtain license. However, if you plan to form a company, you have to also register the company with the State and file incorporation documents in addition to registering with the City. See the difference and importance!! Of course, you knew that.
Sole proprietorship vs. Corporation. So, if you have looked into what form of business you are going to conduct and if it is going to be individual name or proprietorship, then you do not have much to worry about. However, if it is going to be a corporation, you still have to decide whether it is going to be LLC or P. C. or C Corporation or S Corporation.
And different options are available to people depending upon what is their background, who else is involved and what their objectives are. For example, a doctor can have Professional Corporation (P. C.) but an Engineer cannot. Whether the corporation is going to be a C-corporation or S-corporation also needs to be decided based on the objectives of the corporation. A good CPA can help in the decision making process.
Professional Advisory Team.  Who will help you on legal matters? Legal matters can vary from simple incorporation to complex employment or corporate Governence. Who will help you with tax planning and strategy? Who will help you with Marketing? Insurance and Financial planning is a big part of running a business. So, make sure to identify your lawyer, CPA, Insurance Agent, etc. before you need them.
Here is a short list of documents which are required as well.
Governing Documents
Operating Agreements
  1. Shareholder Agreements
  2. Bylaws
  3. Buy-Sell Agreements
  4. Partnership Agreements
Employee Related:  
  1. Employee Manuals
  2. Independent Contractor Agreements
  3. Employee Agreements
  4. Confidentiality Agreements
  5. Non-Disclosure Agreements
  6. Noncompete Agreements
It's much easier and far less expensive to do things right at the start than to try to fix a mistake down the road. With all the laws and regulations out there, it's easy to make a mistake.  I have seen too many people get excited about working together and not paying attention to legal aspects and then later paying for the mistakes.
                                         More later….stay tuned!!

Tuesday, November 3, 2009

HIV Infection No Longer Sole Grounds for Inadmissibility to U.S.

I just read this news update:

In the Federal Register, dated Monday, November 2, 2009, the Centers for Disease Control and Prevention (CDC) will officially remove HIV infection from the definition of "communicable disease of public health significance” and will additionally remove any reference to HIV from the scope of examinations for aliens wishing to enter the U.S.

Prior to this final rule, HIV infection was considered a communicable disease of public health significance by CDC; individuals that tested positive for the infection during the required medical examination for U.S. immigration were inadmissible to the United States. However, effective January 4, 2010, as stated in this final rule, such individuals will no longer be inadmissible to the United States solely on the ground that they are infected.

What I don't know is what factors were considered by the CDC or US CIS in finalizing the rule. What I do know is that before the final rule is published, there is plenty of time during which public comments are sought and anybody who has any feedback, comments or objections can send them to Department of State.  So, my assumption is that since comments are always sought, the comments were made by some interested organization, group and number of people.

I personally wonder what is financial and social impact of bringing in more people in this category to US general population pool. I would imagine that, at bare minimum, people with such medical issues would not be able to obtain health insurance. How are they going to pay for the healthcare? I would imagine that they would go to county hospital and taxpayers would pay for it. I don't know anything in between.

So, how do we balance the fine interest of family unity and taxpayer burden? Keep in mind, that there is an additional provision that visa can be denied if intended immigrant is likely to become a public charge.

Under the law, there is a 3-part test for determining deportability as a public charge:

1] the state or government agency that provides a public benefit must charge for services rendered. The alien cannot be regarded a public charge if there is no legal reimbursement requirement.
2] the welfare agency must make a demand for repayment.
3] the alien or other legally responsible persons must fail to repay the debt after the demand is made. All three prongs must be met.

So, if someone is primarily dependent on the government for subsistence, as demonstrated by either: (i) the receipt of public cash assistance for income maintenance or (ii) institutionalization for long-term care at government expense, then they can be considered public charge.

I feel that it is going to be very tricky!!! I personally feel that Consulates and Consular officers are going to need clear and detailed instructions from Department of State. This is a major policy shift.

Monday, November 2, 2009

Avoid Harassing calls from Creditors

Lot of people who are delinquent in their payments, receive calls from collection department of the lender/creditor. These people must be specifically trained in providing a "guilt trip" on the phone and talk as if the money is owed to them directly. I feel they should be thankful to the person who is delinquent because they have a job exactly for the same reason (borrower is behind).
In any event, in California, the state Rosenthal Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act require that, except under unusual circumstances, collectors may not contact before 8 am or after 9 pm. They may not harass you by using threats of violence or arrest or by using obscene language. Collectors may not use false or misleading statements or call you at work if they know or have reason to know that you may not receive personal calls at work. For the most part, collectors may not tell another person, other than your attorney or spouse, about your debt. Collectors may contact another person to confirm your location or enforce a judgment. You can get more detailed information about debt collection activities by calling Federal Trade Commission at 1-877-FTC-HELP or by visiting

Name Change-2 ways to do it

One of the callers during the radio show wanted to inquire about Name Change during citizenship interview. He explained that he is a green card holder and is applying for citizenship in two weeks. He wanted to change his name. A friend had told him that he has to change name by filing the petition with name change.

There are two ways to change name:

1. If you are a permanent resident (aka green card holder), you can change your name as part of your naturalization if a court in your area conducts naturalization oath ceremonies. Otherwise no name change can be recorded on your Certificate of Naturalization unless you already changed your name legally (such as by marriage) before completing the naturalization process.

If you decide to change your name, you will be required to complete a Petition for Name Change during your interview. Petitioning the court to change your name may delay the date of your oath ceremony, in some cases. If you petition to change your name, the new name will not be legally binding until after your oath ceremony. The new name will appear on your Certificate of Naturalization. You can start using the new name. No other legal formality is required.

During the last citizenship interview with a client, the interviewing officer at Immigration Service (USCIS) had client sign the form right there and my client will now use her new name and get citizenship certificate with such new name as well.

The U.S. of Citizenship and Immigration Services (formerly known as the INS) does not process petitions for a name change after naturalization. However, you still may change your name after naturalization by other legal means.

2. The other legal method is by filing the Petition for Name Change in Superior Court of California in your local county. The procedure also requires having to publish the Notice of Name Change in a local newspaper for 3 weeks first. And then going before a Judge after furnishing the proof of such publication with the court. A judge conducts a bare skeletal hearing and confirming certain representations in the Petition for Name Change. The judge then signs the Order of Name Change Petition. You can then start using your new name.