Bankruptcy Attorney Blog Archives

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.

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.

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.

Over 2.3 million homeowners in the United States faced foreclosure procedures in 2008, an increase of 81 percent, according to a report released by Realty-Trac, a southern California based real estate company that tracks foreclosure data.

The study also said that 860,000 homes were repossessed by lenders in 2008, more than twice the number of homes that were seized by banks in 2007.

Congressional leaders are calling on banks to do more to slow the number of foreclosures in an effort to stop the hemorrhaging in the credit markets. They are now openly critical of banks that have accepted funds from the Troubled Asset Relief Program (TARP) without actually making any effort to help homeowners stay in their homes.

Many are pushing for a change in the bankruptcy laws that would allow a judge to modify the terms of a mortgage, a measure that has stiff opposition from the banking organizations and most banks.

Citigroup, in a move that most say was made under government pressure, said that it would support a change in the bankruptcy law that applied only to mortgages that were written prior to the new law’s effective date.

Banking groups point to statistics that show over half of loans that were modified in early 2008, became delinquent again within six months. But a court case in New Hampshire between homeowners who sought modifications and lender Countrywide has left those statistics with little bite.

Attorneys for Countrywide, once the largest private mortgage company, have said in the New Hampshire case that claims that the company is working hard to help modify mortgages of those caught in the sub-prime lending crisis is “mere commercial puffery.” The attorneys call the modification offers, “vague advertisements.”

This may add enough fuel to the fire to get Congress to pass the measure allowing bankruptcy judges to lower interest rates, modify terms and even lower the amount owed on a mortgage in a Chapter 13 bankruptcy proceeding.

The total number of bankruptcies filed in the third quarter was up 34 percent to 292,291. The number represents the number of cases filed in U.S. Bankruptcy courts from July 1 to September 30, 2008.

Consumer filings accounted for 280,787 of those who filed in the third quarter. Businesses accounted for 11,504, up 61 percent from the 7,167 businesses that filed bankruptcy in the third quarter of 2007.

With economic conditions deteriorating in late September and October leading up to the presidential election, analysts expect that the fourth quarter numbers could dwarf the increases seen so far in 2008.