Los Angeles Bankruptcy Blog

A new term has crept into today’s vocabulary: “MySpace bankruptcy” (also “Facebook bankruptcy”). The first time I read these, I figured the companies had somehow filed some sort of business bankruptcy or Chapter 11 bankruptcy. But no, they’re quite robust and healthy with their annoying flash ads and heavily sponsored web pages.

What Myspace bankruptcy means, apparently, is that the user has a page on My Space (or Face book), which are both popular social networking web sites. And realizing that these are addictive and major time sucks, finally deciding to delete and end their account.

O! How dramatic! That something so simple (”I’m deleting my account”) is somehow tied to something so major (”I am filing bankruptcy”). But scale aside, is this an apt analogy, or does this new slang somehow perpetuate a myth about bankruptcy?

True, people become attached to a myspace customized page, complete with modified templates, songs, videos, flash animation and a sordid collection of “friends” and messages and blogs and movie reviews. Usually this takes some time. And then the user checks on their messages daily, giving updates about their mood, their status, and so yawn. So, making the decision to end the timesuck and just delete the account and do Myspace Bankruptcy is the destruction of something (presumably good) that was accumulated.

But is that right? Filing Bankruptcy (the normal kind) is not the destruction of something good. It’s the elimination or reduction of something bad (debt). And before you say that it destroys your credit, most people have messed up credit already before they file bankruptcy. Is the negative impact really that great for most people who have been in collection creditor harassment for 2 years with 9 accounts and being sued by yet another credit card collection agency? Filing bankruptcy gives most people a new start, a chance to wipe out something negative. And removing a negative is a good thing.

Myspace bankruptcy is removing a positive, which is a bad thing. So, this terminology is really the opposite. Bankruptcy can be a good outcome, giving people a new opportunity for a new beginning.

So, what to do about this new misleading jargon? There needs to be a better phrase. The more appropriate analogy, then, seems to be something else for the concept of destroys your identity (in the online sense). The first thing that pops into my mind would be Myspace suicide or Facebook suicide.

But that would be too dramatic.

I know! How about just telling your not-really-your-friends that “I’m deleting my account” and getting on with your life and doing something meaningful with your time?

Like, oh, I don’t know: creating a budget?

But that’s a column for another day.

In today’s news, another lender closes mortgage business in the United States.

From the Wall Street Journal:

TOKYO — Nomura Holdings Inc., Japan’s largest investment bank by market capitalization, said Monday it would close its New York-based residential mortgage-backed securities business, marking the latest fallout from the meltdown of subprime mortgages in the U.S.

Nomura said it would take a loss of $621 million on write-downs of residential mortgages and an additional charge of about $85 million for restructuring the business. That will swing Nomura to a pretax loss of as much as $510 million in the quarter ended Sept. 30, 2007. In the same quarter a year earlier, Nomura posted a net profit of about $2.1 billion.

As California foreclosures and mortgage defaults continue to climb, we’ll sadly be seeing more of this.

More layoffs to come.

The US House of Representatives just had a hearing on the role of the US Trustee. I have a new hero: Hon. A. Jay Cristol:

“[T]he U.S. Trustee is not one dog. It is a pack of dogs.”

The Office of the United States Trustee (OUST) has released the new median income figures. People who didn’t pass the Means Test before might, just might, pass after Monday next week.

The Means Test is the gatekeeper to file Chapter 7 bankruptcy.

That’s the big question these days. People call up and ask “Can I file bankruptcy?” The questions really should be, “Do I qualify to file Chapter 7 bankruptcy?” And over the phone, without knowing all the facts surrounding your situation, it’s not always easy to answer that.

Since the BAPCPA and new bankruptcy laws, more and more people have to pay back some of their debt, and Chapter 7 bankruptcy is harder to get into for some people. Are you one of those people?

Because of the Means Test based on US Trustee median income family numbers, we attorneys need to understand many factors and variables about you. Your income. Your income lately. Your household size. Dependents. What are your expenses? What are your secured loans? How much do you pay on each of these? And so on.

Sure, an unethical lawyer could tell everyone over the phone a resounding “YES!” However, wouldn’t you rather have someone spend time to learn about you and give you specific advice rather than bait-and-switch you? Spend time with a lawyer you are comfortable with, give the attorney all the info they want, and then sit back and let them analyze your situation. It’s not a fast or easy process (for some people, at least) but at least you’ll know where things stand.

So, contact a friendly and helpful bankruptcy lawyer, and spend the time giving them information about. The more you give, the more you get. And hopefully you’ll be filing Chapter 7 and getting a fresh start soon.

See Attorney Hale Antico (that’s me) in the new video.

I’m curious as to what’s on your mind. Ask me your questions at

888.54.bklaw at gmail dot com

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You see these signs everywhere:

“Free List of Forclosure Homes, call 24/7″ (yes, misspelled like that)

People want to buy homes cheap, but the reality is, it’s not so simple

Foreclosures aren’t the quick path to riches many imagine. “Some people show up [at the auctions] to observe and see if it’s something that’s easy and a quick way to make money,” she says. “A lot of them find out it takes a lot more work than they think.”

The mortgage situation is going to be a meltdown much worse that it is today. This was written six months ago, but we’re nowhere near bottom yet.