Bankruptcy Lawyer Blog

In California, the budget crisis can be seen at all levels. The recent state budget passed included significant reductions in spending, and even Hollywood movies are suffering, as producers of “Terminator Salvation” recently filed for bankruptcy.

While you may not be a movie producer or a high-ranking state official, your financial status is just as important. Unemployment in California has reached one of the highest historical levels, and many businesses are struggling to stay alive.

For a solid plan to help you survive California’s recession, consider filing for personal bankruptcy. With the expertise of a trusted bankruptcy attorney, you’ll understand your rights and powers as a debtor and target the financial needs most important to you.

An experienced bankruptcy attorney in Los Angeles will be familiar with filing procedures at the Central District of California’s U.S. Bankruptcy Court. You’ll need a law firm familiar with bankruptcy laws, one that places your personal financial recovery before any other goal. They will explain your options only after evaluating your debt obligations.

For example, if you are faced with a home foreclosure and you meet certain qualifications, filing for chapter 13 bankruptcy would prevent your home from being foreclosed during the period of bankruptcy.

An honest attorney will explain the credit limitations you’ll be placed under as a result of bankruptcy, and their goal is to provide a plan that will return you to financial stability.

Contact a local California bankruptcy attorney today to begin planning your recovery.

Statistics from the U.S. Bankruptcy Courts shows that bankruptcy filings are continuing to rise in the first quarter of 2009.

The court’s records show that 330,477 bankruptcy cases were filed in the first quarter, the highest number since December 2005 which included the large number of filings leading up to changes in bankruptcy law.

The report shows that over one third of the cases, 134,282, were filed in March. With the economy still fighting its way to recovery, experts predict that the number of bankruptcy cases filed will continue to rise.

General Motors followed its smaller rival, Chrysler, into bankruptcy court this morning by filing Chapter 11 bankruptcy in lower Manhattan. The judge in Chrysler’s bankruptcy case meanwhile approved the sale of the company’s assets to Italian automaker Fiat.

The Obama Administration pushed the automaker into bankruptcy in hope of salvaging GM from liquidation. The deal will result in a new GM with the nameplates of Chevrolet, Buick, Cadillac and GMC. The Hummer, Saab and Saturn brands will be looking for new owners.

The U.S. Senate passed a measure that will change the way that credit card companies do business. A conference committee will meet to align the measure with a similar bill passed by the House of Representatives last week.

President Barack Obama is expected to sign the law by Memorial Day once the conference committee reconciles the differences in the Senate and House versions.

If enacted into law, the credit card industry would have nine months to change the way it does business: Lenders would have to post their credit card agreements on the Internet and let customers pay their bills online or by phone for free. They’d also have to give consumers a chance to spare themselves from over-the-limit fees and provide 45 days notice and an explanation before interest rates are increased.

Opponents of the measure say that credit card customers who are responsible and pay off their balances each month may end up subsidizing bad credit risks.

Often times, financial problems can cause a marriage to disintegrate. Sometimes your spouse has lied to you about their spending habits, debt level and/or income. In many cases the debt that your spouse builds up is also in your name, and cutting them loose is the only way you can free yourself of the crippling debt your partner keeps piling up.

Making the decision to file bankruptcy is often difficult. Sometimes one spouse is ready to file long before the other has come to terms with the situation.

If you and your spouse are having financial problems, it is often smart to gather all of your information and speak to someone who knows how to handle debt. A financial planner or bankruptcy attorney can help you map out a plan to get out of debt and get your life back on track. 

A qualified bankruptcy attorney can explain to you both which of your assets would be protected in bankruptcy. In some cases, only one spouse may have to file bankruptcy.

If your spouse has alread filed bankruptcy, you should speak to a financial planner or bankruptcy attorney about your options. If you are on the hook for some of your partner’s debt, you should definately speak to a lawyer to see how filing bankruptcy can help.

The first thing to remember is that you are not alone. Over 1.2 million people have filed bankruptcy in the last 12 months, according to bankrupcy court records. Seeking help is not admiting failure, it is taking the necessary steps to protect your financial future.

Sun-Times Media Group, owner of the Chicago Sun-Times, filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code in a Delaware federal court.

The filing marks the fifth U.S. newspaper to file for bankruptcy protection in recent months, and gives Chicago the distinction of being the first U.S. city to be served by two insolvent newspapers. (Tribune Co., owner of the Chicago Tribune filed for bankruptcy protection last December.)

Sun-Times Media Group has said that it will study possible sale of assets and seek more investment as it works to reorganize. In addition to the flagship Chicago paper, it owns several community papers in Illinois along with matching online assets.

Properties posted for sale in forclosure auctions have spiked across the country in April. Atlanta’s 13-county metro area topped 10,000 lender-owned properties. In Texas, the number of properties posted for sale in April is up 32 percent from April 2008 and 27 percent from February numbers in Tarrant County - which includes Fort Worth and Arlington. 

Experts say it is a temporary jump that can be attributed to the end of moratoriums placed on foreclosures by government mortgage backers Fannie Mae and Freddie Mac.

The firms halted foreclosures to allow Congress to formulate a plan to slow foreclosures, but the Senate has stalled a bill that would address the issue because of a provision that would give bankruptcy judges the authority to modify the interest rate and principle owed on a mortgage.

Banking industry groups have fought the measure saying that it would drive up mortgage rates. 

A story about the rise in foreclosure rates that appeared in The Fort Worth Star-Telegram quotes George Roddy, president of a company that tracks foreclosures in Texas, as saying that lenders “have some kind of motive to open the floodgates.”

Bankruptcy attorneys have long called for bankruptcy judges to be allowed to modify mortgages on first homes in a Chapter 13 bankruptcy proceeding.

Affordable housing advocates say that for homeowners who owe more than their home is worth, the measure would provide an incentive to stay in the home and keep making payments.

A  survey conducted by the Mortgage Bankers Association shows that a record 5.4 million American homeowners with a mortgage of any kind, or nearly 12 percent of all mortgage holders, were at least one month late or in foreclosure at the end of 2008. That is 10 percent jump from the end of the third quarter, and an 8 percent jump from the end of 2007.

In a sign that the economic turmoil wrought by the housing market is spreading, states that were the epicenter of reckless lending practices, like Florida, California and Nevada, are no longer driving the nation’s delinquency rates up. Defaults are now spiking in states like Louisiana, New York, Georgia and Texas, where the economies are deteriorating and thousands are losing their jobs.

Per capita bankruptcy filings in those states are still high, showing that some debtors are trying to take advantage of property exemptions to try to keep their homes.

Nevada and Georgia are second and third in those rates, according to a report issued by the United States Bankruptcy Court.

Bankruptcy rates are expected to spike once Congress approves a measure that would allow bankruptcy judges to lower the principal or interest on a mortgage. Opponents of the measure have so far succeded in slowing its passage, but it is expected to become law sometime this week.

Democrats in the House of Representatives, under pressure from a group of moderates in their ranks and the banking lobby, agreed to restrictions on legislation that would give bankruptcy judges the power to change the terms of a mortgage by the reducing interest rate or principal. 

The legislation, which the House could vote on by Thursday, will require the judge to consider whether a homeowner had been offered a reasonable deal by the bank to rework his or her home loan before seeking help in bankruptcy court. It also puts the responsibility on borrowers to prove that they tried to modify their mortgages.

The measure is another piece of President Obama’s plan to stabilize the housing market and reduce the number of foreclosures. It follows several initiatives aimed at getting banks to modifiy mortgages for distressed homeowners who are in danger of losing their homes.

In a speech delivered in Arizona outlining his administration’s plan to stem the growing number of foreclosures in the United States, President Obama announced that he will ask Congress to change bankruptcy law to allow judges to modify mortgages.

It was the first formal announcement that the administration is looking for the change to be passed, in the past the President had said he supported the measure and would sign it.

Housing advocates and Congressional Democrats have been pushing for the changes to bankruptcy law since late last year. They say that banks have been slow to modify troubled mortgages becuase there is no risk that modifications will be forced upon them.

Many lenders say the change will increase the cost of making mortgage loans and drive up interest rates for all borrowers.

Citigroup, under pressure from the government, announced in January that it would support changes to the bankruptcy law for loans that originated before the law is enacted. 

The plans announced by President Obama to slow foreclosure rates are similar to plans implemented by the Federal Deposit Insurance Corporation at IndyMac Bank in California.

Trade groups, like the National Association of Home Builders, have sought an expansion of foreclosure mitigation efforts to put a floor under droping housing values, along with incentives to get more people to buy homes like the ones included in the $787 billion stimulus bill the President signed yesterday in Denver.