In Danger of Foreclosure? Do Not Wait Until It’s Too Late

  I have previously posted about the difficulty foreclosed homeowners face when pursuing claims for alleged wrongful foreclosure. Increasingly, foreclosed homeowners are finding the courthouse doors closed. Claims and causes of action that at one time seemed viable, due to the lack of guidance from California’s appellate courts, no longer get past an initial demurrer. Continue reading

Court Clarifies Earnings Exemption

   Under California’s earning exemption laws, 75% of wages paid to an employee within 30 days of the date of levy are exempt. The law further provides: 1) all of the paid earnings are exempt if prior to payment to the employee they were subject to a garnishment; and 2) to the extent money in deposit accounts, or cash, can be traced to an exemption it remains exempt.

  100 Dollar BillsOne interpretation of the statutes is that so long as money in a deposit account, or cash, can be traced to earnings received before garnishment, those earnings are exempt from further levy. Another interpretation, and the one adopted by the court in Sourcecorp, Inc. v. Shill, is that only those earnings paid in the 30-day period before the garnishment are exempt. The court reasoned that any earnings paid before this 30-day period and still in the debtor’s possession are no longer “earnings” within the meaning of the exemption statute and thus subject to further levy.

  End result: Once a debtor has had 30 days to pay for the necessities of life out of exempt earnings, the remainder becomes available to satisfy the debtor’s outstanding obligation to a judgment creditor.

$1000+/Hour Attorney Fees

   The Justice Department’s U.S. Trustee Program is asking law firms, whose billing rates approach or exceed $1000/hour in Chapter 11 reorganization cases, to justify their rates according to the Wall Street Journal. The rates allowed professionals in the Lehman Brothers bankruptcy to be paid more than $1.4 billion according to the WSJ article.


Inheritance and Bankruptcy

   How an inheritance will affect your bankruptcy depends on: 1) timing; 2) your Chapter filing; and 3) the amount and nature of the inheritance.

   In Chapter 7 liquidation cases there is a 180 day rule. If you are to receive an inheritance from a decedent who died within 180 days prior to the date of filing, or from someone who dies within 180 days after the date of filing, you must report the circumstances to the trustee. In all likelihood your inheritance will become part of your bankruptcy estate. If the decedent died more than 180 days prior to the date of filing, or dies more than 180 days after the date of filing, the inheritance is yours. Continue reading

Chapter 20 Bankruptcy?

   Yes, but you won’t find it in the code. Not all bankruptcy judges will allow it, and certainly not in all circumstances. It refers to the situation where a debtor is ineligible to file a Chapter 13 due to the nature and amount of debt or a chapter 20 is simply determined to be the debtor’s best course of action. The debtor therefore files a Chapter 7 to discharge his unsecured dischargeable debt. After the discharge is granted, the debtor files a Chapter 13 to reorganize remaining debt obligations. Hence the name: 7 + 13 = 20. Continue reading