Bankruptcy Law Blog

Detroit Files for Chapter 9 Bankruptcy

posted Jul 19, 2013, 9:14 AM by Keith Carr   [ updated Jul 19, 2013, 9:15 AM ]

Detroit is the largest city ever to file for protection under Chapter 9 Bankruptcy. Along with a declining population (and tax base), Detroit owes creditors - bondholders and city employee pensioners among them -  billions of dollars.

Dionne Warwick has filed Chapter 7 Bankruptcy

posted Mar 28, 2013, 9:20 AM by Keith Carr   [ updated Mar 28, 2013, 9:22 AM ]

By Keith F. Carr, Esq.

Famous singer Dionne Warwick has filed for Chapter 7 Bankruptcy protection recently. She claims owing $10.2 million in unpaid federal and California taxes. Her assets are only valued at $25,000.00 Dollars. Singing such songs as "Walk on By" and "Do You Know the Way to San Jose," Dionne Warwick claims only $1,000 per month in music royalties.

Casey Anthony files for Chapter 7 in Tampa

posted Jan 28, 2013, 9:57 AM by Keith Carr

By Keith F. Carr, Esq. reports that Casey Anthony has filed for Chapter 7 bankruptcy, listing 80 creditors. One creditor listed was her defense counsel, Jose Baez, whom she admitted owing $500,000.  Anthony is also named a defendant in a defamation lawsuit from Zenaida Fernandez-Gonzalez. the defamation lawsuit may not be discharged in Chapter 7.

Can the Twinkie be saved?

posted Nov 19, 2012, 9:34 AM by Keith Carr

By Keith F. Carr, Esq.

Hostess Brands, Inc. will ask the bankruptcy court today for permission to liquidate its assets, as opposed to reorganizing. The company already decided that it would liquidate given its labor problems and filed a motion to liquidate. Nonetheless, the Huffington Post points to good brand recognition (of the American treat) and revenue projections for the proposition that someone could decide to purchase the brand. Indeed, Hostess reports receiving several inquiries.

Correcting mistakes on your credit report

posted Oct 25, 2012, 11:02 AM by Keith Carr   [ updated Nov 19, 2012, 9:34 AM ]

New legislation has been passed which allows consumers to file a complaint with the Consumer Financial Protection Bureau if they cannot correct mistakes on their credit reports. The Consumer Financial Protection Bureau can help individuals resolve issues with the big three credit reporting agencies - Experian, Equifax, and Transunion. The CFPB gained the authority at the end of September to supervise the credit reporting agencies.

Judgment Liens in Bankruptcy

posted Aug 1, 2012, 10:05 AM by Keith Carr   [ updated Oct 25, 2012, 11:03 AM ]

Once you have been sued, the credit card company will then obtain a judgment against you. But now the question is can it collect. One method to collect judgment (which seems on the rise lately) is recording the judgment. Once a judgment is recorded in the county recorder’s office, a judgment lien arises upon debtor’s real estate. A judgment lien may recorded in the Secretary of State’s office in order for a judgment lien to be placed on a debtor’s personal property.

Bankruptcy allows the judgment lien to be stripped using an impairment statute. Namely, if the judgment lien impairs an exemption that the debtor would otherwise be entitled the judgment lien may be stripped. The average homeowner may exempt up to $75,000 in California, assuming a home with that much equity. If the homeowner’s equity is less than $75,000, and the exemptions applies, a creditor’s judgment lien can be stripped. The debtor must proceed by motion in the bankruptcy. If debtor has a lawyer, the lawyer will normally bring the motion. However, if the debtor has no lawyer, the debtor must attempt the motion on his/her own. In many cases (especially for Chapter 7) debtors who are not represented by attorneys simply ignore the judgment lien only to find out that they cannot refinance their homes due to the existence of a judicial lien, which could have been stripped in bankruptcy. If it is not too late, the debtor may attempt to strip the lien after re-opening the bankruptcy case. Other than this, the judgment lien will continue. Be aware!

Stockton's Chapter 9 Filing

posted Jul 2, 2012, 11:04 AM by Keith Carr

A good analysis from Reuters re the Stockton bankruptcy filing in Sacramento, Ca: Of particular importance are the facts that Stockton’s credit rating went down prior to bankruptcy which increased its borrowing costs. Yet the California mandate that cities negotiate with creditors prior to filing Chapter 9 helped Stockton and may mean the difference between passing and failing.

New Foreclosure Laws contemplated in California

posted Apr 25, 2012, 10:53 AM by Keith Carr   [ updated Nov 19, 2012, 9:35 AM ]

California Attorney General Kamala Harris has introduced  a homeowner’s bill of rights in the assembly – 7 bills when read together  center on foreclosure treatment of individuals.  See the discussion in Mortgage Daily News.

Further, Mrs. Harris which would create a combination judicial and non-judicial  foreclosure process.  Currently, lenders may foreclose either judicially or non-judicially.  They are rewarded for using the non-judicial process by a shorter foreclosure process.  A judicial foreclosure process takes longer but allows the lender to recover a deficiency, much like car loans. SB 1470 would delay the foreclosure process without allowing a deficiency judgment.

Bankruptcy Court approves discharge of student loans

posted Apr 15, 2012, 11:08 AM by Keith Carr   [ updated Apr 15, 2012, 11:34 AM ]

A Bankruptcy Court in Illinois (In re Krieger, Bk C.D. Ill) has approved the discharge of student loans by a paralegal who was without prospects for future employment, homeless, had no income and was living on food stamps. Normally, student loans cannot be discharged under Bankruptcy Code Section 523(a)(8) unless discharging such debts would impose an undue hardship on debtor. As the economic downturn continues and long term unemployment persists, debtors will increasingly be able to show little to no prospects of future employment in order to be able to discharge student loan debt. 

Aggressive Debt Collector tactics

posted Apr 13, 2012, 11:00 AM by Keith Carr   [ updated Apr 14, 2012, 11:43 AM ]

In a study by Marketdata Enterprises, Inc., debt collectors have become more aggressive, using profanity, threatening, and insulting people. Their behavior is attributed to a poor economy, high gas prices, and competition among debt collectors. But debtors are fighting back as the number of complaints is increasing. The Fair Debt Collection Act specifies what actions a debt collector can take in order to collect the debt.

What can a Debt Collector properly do under law?

Debt collectors may contact you by telephone between the hours of 8:00am and 9:00pm (local time) for the purpose of demanding payment of debts that you owe.  They must identify themselves as debt collectors and notify you in every communication that they are debt collectors and that any information you give them will be used to collect a debt. Debt collectors may call your friends, co-workers, and neighbors to obtain information to reach you.

What Debt Collectors may not do?

Debt collectors may not use profane or abusive language when communicating with you.  Debt collectors may not misrepresent the debt owed or use deception in collecting the debt.  They may not misrepresent that they are law enforcement officials. They may not attempt to collect more than the debt owed under contract. Debt collectors may not contact you at your place of employment after being advised that it is unacceptable or prohibited by your employer.

What can you do?

You may notify the debt collector that he or she may not contact you at work. You may also request to verify the debt. Communications to a debt collector should be in writing.  You may try to negotiate with the debt collector assuming that you can afford to pay the debt.

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