Los Angeles Bankruptcy Blog

Citi is increasing rates on millions of credit card holders, just before laws preventing credit card interest rate increases come into effect.

Question: since the US Government owns 36 percent of Citi, and we are being forced to pay more money, and over one-third of that Citi money goes to the government, isn’t this really a stealth tax increase?

In California, for foreclosure, you get an additional 90 days in some cases, write Michael Doan, San Diego Bankruptcy Attorney.

Essentially, Civil Code Section 2923.52(a) now requires an additional ninety (90) day period to be added to the previous 90 day period that must pass after a Notice of Default has been recorded, before a Notice of Sale can be recorded, in order to allow all parties time to pursue a loan modification. If a Notice of Sale has already been recorded prior to June 15, 2009, this provision will not apply. Thus the typical 90 day timeframe required between a Notice of Default and Notice of Sale has now been extended to 180 days in many cases.

There are limitations, but if it encourages lenders to work with people, that can’t be a bad thing.

A news report in New York gets it right.

Is it a Superman company? Or in a Freefall? Six Flags, owner of Valencia’s own Magic Mountain, has announced it’s declaring bankruptcy. Those of us who’ve been around Santa Clarita a while remember when Newhall Land & Farm sold the amusement park to Six Flags. Now, with the Valencia bankruptcy, it seems NL&F did the right thing in getting out. Or maybe NLF can buy it back at a discount.

Statistics can be confusing.

Some people, like Bankruptcy Professor M. Jonathan Hayes, point out that filings seem to be down, but is surprised at this.

Credit Slips also looks at May bankruptcy petition filings and concludes that May 2009 filings are up.

By celebrating a video game.

A fun cartoon.

From the comments:

• the creditor needs to eat something — he’s looking a bit lien.
• He doesn’t even look phased. Must be a secure(d) creditor.

A recent study reporting on the bankruptcy filings in 2007 show that most people who filed bankruptcy a couple of years ago didn’t declare bankruptcy because of their many SUVs or big swimming pools of wasted money. Instead, they were victims of unplanned medical emergencies and costs that sent them spiralling into debt.

Health insurance didn’t help.

Having an education didn’t help.

These were people just like you and me.

Read the whole thing.

UPDATE: Credit Slips breaks it down.

A Chapter 7 trustee has an interesting frozen asset:

A bankrupt Massachusetts medical device maker left behind some gruesome assets when it shut down earlier this year. Innovative Spinal Technologies lists nine human bodies, including “eight previously used” cadavers, among its property in a federal bankruptcy filing.

Query - how would the cadavers NOT be previously used?

Sentiment More Cheerful but Prices Down.

Or is sentiment better because of lower prices?

Credit card reform is supposedly coming to provide relief to all. However, one commentator points out:

Congress explicitly rejected any limitation on the interest rate credit card companies can charge. It remains perfectly legal for them to charge rates that would make a loan shark blush.

and then…

The high rates charged by credit card companies obviously do a great deal to impede consumer spending and drive families into bankruptcy. The average credit card balance for those who have such debt is over $13,000. A 30 percent interest rate means more than $300 per month in interest payments alone!

It’s one thing to not offer help, but another to make it seem like it’s help when it’s really nothing more than window dressing.

A report today indicates that General Motors should declare business bankruptcy next week.

The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing as the company seeks to shrink and reemerge as a global competitor

Some people thought this should have happened six months ago.

A newspaper in the suburbs of Los Angeles reports that new home sales doubled in March over what sold in February. Could this be a sign that we’re turning the corner in the housing mess as people put fear aside and realize this is a good buying opportunity?

The Wall Street Journal posted some highlights of the credit card bill that just passed the Senate and is likely to pass the House.

Existing balances: Issuers cannot retroactively change the rate on an existing balance unless the account is 60 days delinquent.

Payments: A consumer payment above the minimum applies first to the balance with the highest rate.

Teaser rates: Issuers cannot raise rates for the first year after an account opened. Promotional rates must last at least six months.

Bills: Issuers must send a bill 21 days before the due date.

Over limit: Issuers cannot charge over-limit fees on credit cards unless the consumer has signed up to allow such transactions.

Minors: For consumers under 21 years old, a company must get the signature of a parent or another to take responsibility for the debt, or it must obtain proof that the under-21 consumer can repay credit.

Disclosure: Cardholders must get 45 days notice of change in terms.

Fees: Issuers cannot charge fees to pay by mail, phone, and electronic transfer or online, except for expedited service.

Gift cards: All gift cards must have at least a five-year life.

Opinion: Yes, minors are targeted, but targeting them is not the major problem; I see very few 21-year olds in my office. The fees and disclosure thing is something the credit card companies will satisfy by sending out some pamphlet included with the statement with small print we all throw in the trash. The having a payment applied to the highest rate is a good step, but not enough; a $200 payment applied to a 22% balance will pay interest but not reduce the balance. In other words, will any of these “solutions” help people get out of debt and avoid banrkuptcy?

The benefits smack of window-dressing, while the more sinister stuff of credit card users with good credit get penalized will have them opt out and just use cash. And that will leave a system where only people with not-so-good credit participate resulting in systemic meltdown.

Does that make sense to you?

About as much sense as punishing those with good credit.

What’s going on around here?