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.

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.

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.

Experts in the mortgage industry expect foreclosures to rise with the growing number of workers being laid off and heading for the unemployment line.

Adjustable-rate and sub-prime loans have accounted for most of the foreclosures so far in the economic crisis, according to many experts, but the rise in defaults on prime loans is a sign that the housing market may not have reached bottom.

Companies have continued to cut employees as the economic downturn has continued to worsen. Housing industry experts citing the last downturn in California’s economy said that every 100 jobs lost resulted in 10 foreclosures. Some say that number could be as high as 15 foreclosures for every 100 lost jobs.

Changes to bankruptcy law that would allow a judge to modify the terms of a mortgage won’t help homeowners if there is no income that would qualify them for Chapter 13 bankruptcy.

Many financial planners suggest that anyone facing financial problems should seriously evaluate their options before they lose their job. Consulting with a financial planner, consumer credit counselor or bankruptcy attorney could help restructure your debt and make it manageable in the tough times that may lie ahead.

With most recent news showing growing unemployment and more home foreclosures on the horizon, you may be assessing your personal financial situation looking for options.

The median home price has eroded by 11.3 percent since October 2007 to $183,300 last month, according to a report issued by the National Association of Realtors. That is bad news for millions of homeowners across the United States who used the equity in their homes to finance their lifestyles. Refinancing your home to access the equity to pay of credit card bills may no longer be an option.

Many Americans are now underwater in their homes, which means that they owe more than the home is worth. If they were to lose their job, or get transferred to another city for work, selling the house would not payoff the debt that is owed on it in most cases.

Getting to the heart of your financial situation should be a priority. Building a budget that attempts to pay off your debt in a relatively short time is the first step.

First, list your debts and the minimum payments expected each month. Add this amount to your current monthly living expenses (i.e. car payment, mortgage payment, utility bills, grocery bill), then compare to your monthly income. Is there enough money to pay all the bills? Is there extra to begin paying off your debt faster?

You should also remember that some debt is not dischargeable. Back child support, student loans, judgments stemming from a wrongful act and most back taxed must be repaid. Filing bankruptcy will not get rid of these debts, but it could restructure the payments so that you can afford to pay them back more quickly. It can also limit interest and penalties on some of these debts.

Understanding the types of debts you have can be difficult. Consulting a bankruptcy attorney can help you untangle your maze of debt and clear the way for a debt-free future.

President George W. Bush said that he would sign the historic bailout designed to free up the credit markets after the House passed the bill by 92 votes, 263 to 171, Friday afternoon.

The Senate passed the beefed up version of the $700 billion bailout proposal, that was sent to congress by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke last week, Wednesday after it failed in the House Monday and sent markets tumbling.

The Senate added provisions that increase the amount of deposits insured by the FDIC to $250,000 from $100,000, tax incentives for renewable energy projects and extensions of other tax breaks for other specific special interests.

Stock markets rebounded slightly on the news that the measure had passed both houses of Congress before then dipping again. Analyst said that a sell off after the news settled in sent the Dow Jones Average down 157.47 points to close Friday afternoon at 10,325.38, which is just above its 52-week low of 10,310.25 that was reached Monday after the House voted down an earlier version of the bailout.

The House of Representatives is taking a second try today at passing a bailout of the United States financial system after its narrow defeat Monday sent the Dow Jones Industrial Average sliding over 700 points this week.

Republicans and some conservative Democrats voted down the bailout, that most Americans saw as a free ride for CEOs and Wall Street institutions who created the crisis in the first place, because they felt that taxpayers should not have to pay for a fix to the problem. The slide in the stock markets brought the issue home to constituents as the value of their investment and retirement portfolios felt the effects of the credit crunch.

President George W. Bush and legislative leaders have been attempting to drum up support for a version of the bill passed by the Senate which added some tax extensions that will increase its cost to over $800 billion. The President said this morning that the House “must listen” to the warnings and vote yes to the bailout.

Supporters of the bailout say that without it, credit markets will freeze leading to more layoffs and an end to most lending. They say that mortgage lending, car loans and financing for small businesses to maintain inventory or expand has all but dried up in the past two weeks. Banks have been reluctant to loan money to one another in a market where no one can tell how much of an institution’s debt is tied up in shaky markets.

Detractors say that taxpayers are being put on the hook to absorb the losses of financiers who made poor decisions. They also say the bailout provides no relief to homeowners who are stuck in the loans that have dragged the economy into the mess it is in.

The evidence is there that no action can cause some weakening in the already troubled economy. Economic numbers released this week show that companies are shedding jobs. The Labor Department said that employers cut 159,000 jobs in September, but the nation’s unemployment rate remained steady at 6.1 percent.

As unpalatable as the bailout may seem, economists say that it may not go far enough to keep the financial sectors out of trouble in the future. Some suggest that more power be given to regulators who oversee the banking industry.

Banks and consumers have begun to feel the credit crunch. Lenders have no funds to finance the purchase of automobiles, homes and other items. State and local governments are being locked out of the credit markets.

California Governor Arnold Schwarzenegger has sent a letter to Treasury Secretary Henry Paulson asking for a $7 billion loan to insure that his state can meet its day-to-day expenses. According to the document, the State of California will run out of cas to meet its expenses at the end of October.

No matter the outcome. The financial system is in a crisis that must be addressed.