<a href="http://blog.los-angeles-bankruptcy.net/" title="Los Angeles Bankruptcy Blog">Los Angeles Bankruptcy Blog

California Homestead Exemptions Increase

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.

2009 10 21

Comments Off

2_News
Chapter 7 Bankruptcy
Consumer Finance

Over 60 percent of people filing BK had medical debt

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.

2009 06 06

Bankruptcy trustee with odd asset

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?

2009 06 06

What Causes Bankruptcy?

Megan McArdle writes about what leads most people to declare bankruptcy.

Job loss?
Medical?
Divorce?
Housing market?

What’s your take?

2009 05 09

2_News
File Bankruptcy
Chapter 7 Bankruptcy

Bankruptcy Reform Law a Bust?

The person who chairs the Senate Judiciary subcommittee that monitors bankruptcies says that maybe the Bankruptcy Reform of 2005 screwed things up, as the number of people who declare bankruptcy is up.

Oops.

2009 03 25

Comments Off

3_Observations
Chapter 7 Bankruptcy
Bankruptcy Myths and FAQs

Should you Pay Back your Family before You File Bk?

Q. Should you repay a loan to family or friends before you file bankruptcy?

A. No.

2009 03 01

3_Observations
File Bankruptcy
Chapter 7 Bankruptcy

Why Do People File Bankruptcy?

Why do people file bankruptcy? Megan McArdle has an interesting bankruptcy thread on her blog about why people file bankruptcy. Is it usually a job loss? Medical emergency? People who are spending what they have, leaving no room for error or downturn?

The post features a paper written by Ning Zhu from U.C. Davis which cites:

Adverse medical conditions also lead to personal bankruptcy filings, but other adverse events such as divorce and unemployment have marginal effects. Over-consumption makes households financially over-stretched and more susceptible to adverse events, which reconcile the strategic filing and adverse event explanations.

Megan interprets this:

Job loss may precipitate bankruptcy, but bankrupts don’t report being laid off at a significantly higher rate than the control group. The difference is, the control group had savings to cover its financial emergency.

That seems about right. Sure, most people don’t save, it seems. If they make it, they spend it. But I do see my share of people who save, have a job loss or other mishap, and then blow through the savings in a few months before eating up the credit cards to stay above water.

Read the post, but more importantly, read the comments.

2009 02 08

US Trustee’s Office median income - latest table

The latest information from the us trustee’s office median income regarding median family income by family size is here. Updated for cases filed after March 17, 2008.

To find out if you qualify to file bankruptcy under Chapter 7, contact a Los Angeles bankruptcy attorney.

2008 03 21

3_Observations
Chapter 7 Bankruptcy

Where Did my Quarter Million Dollars Go?

I see a lot of people in my office asking about filing bankruptcy. More often than not these days, it’s a realtor or mortgage broker or loan officer who has lost income. Oh, and they have two investment houses and those investments aren’t panning out. As I said, this happens a lot nowadays.

Yesterday, a gentleman who is from the above template strolls in. I’m very sympathetic to his plight. He might have to let two properties go, his wife’s income barely pays the mortgage where they live. At the end of our time together, I ask, “have you sold, given away or transferred any valuable property in the last four years?”

The answer? Yes, I sold a house. How much did you get? $250,000. No, I mean, how much did you clear from the transaction after the mortgages and liens were paid? Same answer: $250,000. Great! And you purchased your current home that same year… how much of that did you put down? Zero down. When did this happen? Less than two years ago: 2006. And where is that quarter-million dollars now? Home improvements. You must have a lot of receipts from Home Depot. The Chapter 7 Trustee will be wanting to see all of them. He looked at me, puzzled.

Who gets a ton of money from selling a house and goes zero down on their new home and can’t show where the gobs of cash went? Is it possible he’s telling the truth? Sure. But if he were to file bankruptcy, you can bet the US Trustee will be all over him.

It’s just amazing to me.

2008 03 21

1_Articles
Chapter 7 Bankruptcy
Bankruptcy Myths and FAQs

Myspace and Facebook Bankruptcy

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.

2007 10 17

US Trustee Releases New Median Income Figures

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.

2007 10 12

1_Articles
Chapter 7 Bankruptcy

Should I File Bankruptcy? Do I Qualify for Filing Chapter 7?

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.

2007 10 11