Orange County Bankruptcy Lawyer Blog

A case this week issued out of the Northern District of California illustrates why area residents considering bankruptcy should consult with an experienced attorney to protect their rights.

Our Santa Ana bankruptcy attorneys and San Bernardino bankruptcy lawyers understand considering bankruptcy or facing significant financial problems is a stressful time in your life. But don't compound your problems by attempting to represent yourself.

In this case, a California man completed the paperwork himself and filed for Chapter 7 Bankruptcy in January. He listed both a street address and a post office box, which he identified as his mailing address. The court sent a request for additional paperwork to the post office address, and the defendant failed to comply within 14 days, as required by law.

The court dismissed the case on Jan. 21 and on Feb. 4, his home was sold at a foreclosure sale. He then filed another petition for Chapter 7 Bankruptcy, thereby starting a second bankruptcy case in federal court. He wrote a letter to the court, which reinstated the first case and voided the second case. However, no actions taken during the lapse -- including the sale of his home at foreclosure action -- were invalidated.

The man then argued to the court that the foreclosure sale should be invalidated because the court sent notice to the wrong address -- he said the post office box belonged to his mother, who died and left him without access to his mail. He argued the bank had taken possession of the house when no credible buyer came forward at the auction, so the foreclosure sale could be set aside without harming a buyer.

The court ruled on behalf of the bank and the man lost his home. His bankruptcy case is still before the court and has not yet concluded. No word yet on whether he has hired an attorney.

This case illustrates the importance of hiring professional legal help when dealing with a California bankruptcy. Bankruptcy is handled in federal court and the results will remain with you for years. Failure to properly file can have all sorts of unintended legal consequences. One of the most common mistakes is not properly listing all creditors. An executed bankruptcy that does not include a creditor will leave a consumer open to collection action without the ability to seek additional bankruptcy protection.

Continue reading " Consulting an experienced Orange County bankruptcy attorney vital to protecting your rights " »

Six out of every 1,000 California residents have filed bankruptcy in the last year, the Orange County Register reported.

As our Riverside Bankruptcy attorneys reported recently on our Orange County Bankruptcy Lawyer Blog, the number of California bankruptcies has continued to rise even as bankruptcy numbers nationwide have leveled off or started to decline. Using the Register's figures, the number of area residents who have filed bankruptcy in the last year:

-12,600 Bankruptcies in Riverside County
-18,156 in Orange County
-12,090 San Bernardino County

The recession and collapse of the real estate market have brought financial hardship to the doorstep of struggling families. Bankruptcy remains a powerful tool to reclaim your financial footing and the future financial well-being of you and your family. The number of California bankruptcy filings has tripled the last 3 years.

The new statistics, which represent 12 months of bankruptcy filings through March 31, rank California 8th in number of bankruptcy filings compared to total population. The state ranks first by a wide margin for total number of bankruptcies.

Nationwide bankruptcy filings per 1,000 residents:

1)Nevada: 11.7
2)Tennessee: 8.55
3)Georgia: 7.8
4)Indiana: 7.62
5)Alabama: 7.42
6)Michigan: 7.11
7)Ohio: 6.26
8)California: 6.15
9)Illinois: 6.04
10) Kentucky: 6.03

A total of 1.47 million bankruptcies were filed nationwide in the last 12 months, a 25 percent increase compared to the 1.15 million filed in the previous 12 months. Just 674,000 were filed in the 12 months ending in 2007, before the economic downturn.

Nationwide bankruptcy filings increased in each category:
Chapter 7 (personal or business liquidation): Up 34 percent to 1.1 million.
Chapter 13 (personal reorganization): Up 12 percent to 415,966.
Chapter 11 (business reorganization): Up 30 percent to 15,251.
Chapter 12 (farm bankruptcies): Up 65 percent to 605.

Continue reading " Orange County bankruptcies filed by 1 in 6 consumers in the past year " »

Changes to the U.S. bankruptcy laws in 2005 could be partly responsible for the meltdown of the real estate market, several California researches argue.

As our Los Angeles bankruptcy attorneys reported recently on our Orange County bankruptcy Blog, the number of California bankruptcies has skyrocketed, from 34,000 in 2007 to an estimated 120,000 this year.

The 2005 law toughened the restrictions for filing Chapter 7 Bankruptcy, which eliminates most types of consumer debt. Under the new law, consumers who don't meet a certain debt-to-income threshold can be required to establish a repayment plan. But perhaps the biggest impact reform had is in scaring struggling consumers and homeowners from seeking the help they need and deserve. Consumers who are facing financial difficulty should consult an experienced Los Angeles bankruptcy lawyer as early as possible to discuss the best course of action for regaining solid financial footing.

Now officials are questioning whether the resulting squeeze on consumer budgets helped cause the meltdown, according to a report by FOX News. The report cited three prominent economists -- including Michelle J. White of the University of California at San Diego and Ning Zhu of the Graduate School of Management at the University of California.

“Bankruptcy reform squeezed homeowners’ budgets by raising the cost of filing for bankruptcy and reducing the amount of debt discharged in bankruptcy," the economists argue. "It therefore increased mortgage default by closing off a popular procedure that previously helped financially distressed homeowners save their homes.”

They content bankruptcy reform immediately increased foreclosures by 200,000 per year and has had a snowball effect as the economy worsened.

An experienced attorney can protect your rights under the law and help ensure the future financial well-being of you and your family. Bankruptcy remains a powerful and effective tool to protect consumers.

Continue reading " Bankruptcy reform influenced real estate collapse; Los Angeles bankruptcy firm can help " »

U.S. bankruptcy filings, for both individuals and businesses, fell 4 percent in April, Bloomberg Businessweek reported.

While it is the first small sign of stabilization, consumer bankruptcies in hard hit areas like California, Nevada and Florida are likely to remain elevated for the foreseeable future. As our Orange County bankruptcy attorneys reported last week, California bankruptcies handled by the Central District Court could reach a record 120,000 filings this year -- four times the annual bankruptcy filings reported in 2007 before the economic downturn. The Central District handles bankruptcy filings in Riverside, Los Angeles, Orange County, Santa Barbara, San Bernardino, Ventura and San Luis Obispo.

States that continue to report the largest increases in monthly bankruptcy filings include California, Hawaii, Virginia and Vermont. The states with the most filings per resident were Nevada, Tennessee, Georgia and Michigan.

Despite the decline in filings nationwide, Businessweek reported April filings remained at the second-highest level since bankruptcy laws were tightened in 2005 in an effort to make filing for bankruptcy more difficult for consumers. The primary change involves consumers filing for Chapter 7 Bankruptcy, which eliminates most debt. The new rules can require repayment of certain debts for consumers who do not meet a certain income-debt ratio. Speaking with an experienced Los Angeles bankruptcy attorney can help determine the solution that will best address your financial situation.

The record for bankruptcies was 2.1 million in 2005, a figure inflated by an estimated 630,000 consumers who filed in the two weeks before the new rules went into effect.

Nationwide, bankruptcy filings totaled 146,000 in April. March filings were about 158,000. Those figures represent a 4 percent daily decline in bankruptcy filings. There is some question about whether the majority of the decline involved commercial bankruptcies; some experts suspect consumer bankruptcies continue to increase as families battle high credit card debt, underwater mortgages and high levels of unemployment.

Continue reading " Bankruptcies decline nationwide; California bankruptcies expected to continue to rise " »