Los Angeles Bankruptcy Blog

You can protect more of your home’s equity, starting on January 1, 2010. This means that instead of protecting $50,000 and $75,000 of your home’s equity when you file bankruptcy if single or married (respectively), now you can save more when you file bankruptcy. Starting with the new year, you’ll be able to protect $75,000 and $100,000 of home equity for single and married debtors.

Of course, the irony is, fewer people have home equity in this sinking California home market. However, when the real estate market recovers, hopefully the law changes in California homestead exemptions will remain permanent.

Barrons has a blurb about how $21,000 handout for houses could take the failed Cash for Clunkers program to a new level.

As with the clunker cash, Uncle Sam is giving money to folks to do what they would have done anyway. Cash for clunkers temporarily juiced auto sales in August, but they fell back to their previous, depressed pace in September. And some 85% of the subsidy was pocketed by the dealers, not car buyers, according to one estimate

More expensive than you think. And do we need to punish good behavior and reward bad? And finally, with home prices low, interest rates low, why do we need to give further incentive? If people have the capital and credit to buy, they’ll buy now without further prodding.

There are new credit card laws supposedly to protect the consumer from the credit cards. You know all the things you’re supposed to do in order to manage your finances. Dealing with high interest rates is not one of them. Therefore, you want to keep your balances on your credit cards low, and use them for convenience.

However, Bank of America and Citi has announced that in 2010 they will charge you a fee even if you pay off your balance each month. Why? The new credit card law is making it harder for the credit cards to jack up interest rates or minimum balances due. So, they’re scrounging around for new ways to raise income.

What this ultimately leads to is that those who are paying their bills on time and doing everything right end up paying more. It’s hardly fair to punish good behavior.

As a Los Angeles bankruptcy attorney, I take great interest in your post about Chapter 13 bankruptcy plan payments. You’re right that it’s an extremely budget-intensive exercise. Priority debt and arrearages can complicate matters. Ditto for a liquidation analysis. Does a Chapter 7, after factoring in allowable exemptions allow greater distribution than the Chapter 13 does?

Complicating this further is not just different interpretations between circuits, but also even within circuits. In the Ninth Circuit, In re: Kagenveama is interpreted differently from district to district. In the Central District, it’s a way of shortening the term in some situations from sixty months. However, in the Eastern District, the same case is interpreted to emphasize the B22 and the projected disposable income. In other words, depending what your zip code is, in one place your plan payment is based on Schedules I and J, but the neighboring county ignores your actual budget and what you can afford. Instead, the focus is on the result of the B22 form.

It’s our hope that the U.S. Supreme Court will grant cert. to a case like Lanning and make a clear statement about uniformity between circuits and divisions so that the budget — Schedule I minus Schedule J — is the law of the land and truly determinative of the plan payment. A plan payment
based in reality, upon true income subtracting out reasonable deductions and expenses.

(Still, it’s better than debt consolidation.)

It seems we’re at 9.8 percent unemployment.

Or, put differently, we lost over a quarter-million jobs last month.

If you’re having a tough time, you’re not alone. From the people I talk to in my office, many more are being forced to take pay cuts or even furloughs.

Hang in there.

UPDATE: Because many people are taking early retirement or disability, it seems the numbers are worse than initially reported.