Posts Tagged ‘Chapter 7’

Chapter 7 Bankruptcy Filings in Riverside County & San Bernardino County, December 2008

Friday, January 9th, 2009

Bankruptcy lawyers are needed in many cities, but perhaps in some more than others.

The Riverside County and San Bernardino County cities with the most chapter 7 bankruptcy filings for the month of December, 2008, are as follows: Corona, Fontana, Moreno Valley, Murrieta, Ontario, Rancho Cucamonga, Riverside, San Bernardino, Temecula, and Victorville.

Riverside County and San Bernardino cities that also had a high number, especially considering their relative population, include Chino, Chino Hills, Hemet, and Menifee.

The total number of Chapter 7 bankruptcy filings in the Riverside Bankruptcy Courthouse, for the month of December 2008 was 1,254.

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Bankruptcy Filings Rise, Especially in Riverside Courthouse

Tuesday, January 6th, 2009

From the Californian online:

“More Americans sought to discharge debts in bankruptcy court last year, and the numbers of local debtors entering bankruptcy more than doubled from 2007, according to court filings and local attorneys.

About 1.06 million individuals sought personal bankruptcy protection last year, an increase of more than 30 percent over 2007, according to the American Bankruptcy Institute, a research group based in Alexandria, Va.

A total of 18,900 residents and corporations filed initial petitions at the Riverside division of the U.S. Bankruptcy Court, compared with 8,860 in 2007. The division covers Riverside and San Bernardino counties.

A prominent bankruptcy attorney in Temecula said the increase has been even more dramatic in foreclosure-wracked Southwest County.

Bankruptcies filed under Chapter 11 of the U.S. Bankruptcy Code, which allows a corporation to put off debt while it reorganizes, rose by 530 percent in the two-county district, to 297.”

A Temecula attorney noted that there was a “ripple effect” from the economic distress, especially in construction industry:

“In August, a group of large lenders filed an involuntary bankruptcy petition against Woodside Homes Inc. in Riverside. Court filings showed the Utah-based builder owing some $680 million, including several hundred thousand dollars to local subcontractors. Woodside has built homes in the Wolf Creek development in southern Temecula; Audie Murphy Ranch, its master-planned community of 2,000 homes north and south of Newport Road in Menifee, has been repeatedly delayed.

Other filings included:

– WSR Publishing Inc., a Murrieta company whose monthly Widescreen Review covers home-entertainment products. The company continues to publish in print and at www.widescreenreview.com. Owner Gary Reber said his company’s woes stem mainly from the weakening market for consumer electronics. WSR also had difficulty refinancing some of its debt, Reber said.

– It’s About Time … Scrapbooks & More Inc. of Murrieta filed for Chapter 7 liquidation in mid-December.”

As the Inland Empire well knows, and as bankruptcy lawyers in Riverside and San Bernardino counties can attest, the economic domino effect leaves few industries untouched. With more than double the number of bankruptcy filings in the Riverside Courthouse in 2008 than in 2007, consumers and businesses alike are hurting. Whether you live in Corona or Rancho Cucamonga or Murrieta, your community is not immune from the effects of this downturn. We can only hope that new policies and the stimulus package in the works can prevent the dominoes from continuing to fall.

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Recession to Take Especially Big Toll On Riverside County

Wednesday, December 17th, 2008

Although the economic crisis is hitting California as hard as the rest of the country, it is hitting certain counties in California even harder, according to UCLA economists. Riverside County, San Bernardino County, Orange County, and a few other areas will feel the effects of the recession more than the rest of the state.

“The Inland Empire, Orange County, the East Bay and the Central Valley will be hit the hardest as the recession provides a double whammy with a generalized downturn in demand and a postponement of a recovery in residential construction,” says the UCLA quarterly economic forecast.

According to the forecast, the next year will only get worse for Riverside County residents, as unemployment will continue to rise. This, in turn, will lead to less consumer spending and more consumer and business bankruptcies. Bankruptcy attorneys in both Riverside and San Bernardino counties, from Temecula to Rancho Cucamonga, are reporting high volumes of new bankruptcy clients seeking to file Chapter 7 and Chapter 13 bankruptcies. As far as business in California goes, bankruptcy attorneys are among the select few that are seeing an increase in clients from this crisis.

For More Information: click here

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Treasury Department Rejects Proposed Changes Favoring Credit Card Forgiveness.

Wednesday, December 10th, 2008

Banks and consumer advocates recently requested changes that would permit forgiveness of as much as 40% of debt for borrowers who do not qualify for existing programs. The proposed changes would also have permitted borrowers to defer taxes on forgiveness of indebtedness until after the end of any repayment plan. Current law requires borrowers to recognize and pay taxes on the forgiveness of debt immediately.  The plan would have benefited lenders by allowing them to recognize losses associated with charge offs of unpaid debt at the end – rather than the beginning – of repayment plans.

The change would have also helped borrowers – particularly those in Orange County and Riverside County where qualification for Chapter 7 may be difficult – who are attempting to avoid bankruptcy by negotiating credit card payoffs.

The Financial Services Roundtable and the Consumer Federation of America, who made the request, hoped such a pilot program would become permanent and that as many as 50,000 people struggling with credit card debt would be involved.

It is unfortunate that the Treasury Department rejected this proposal, as this would have helped residents from Riverside County get back on their feet, and avoid possibly needing a bankruptcy attorney.  Until these and other measures are adopted, however, more and more Chapter 7 bankruptcies will be filed in Riverside County and San Bernardino County, from Corona to Murrieta to Rancho Cucamonga.

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During Credit Crunch, Bankruptcy Difficult to Avoid

Monday, November 17th, 2008

Last month saw a 34% growth in bankruptcies filings, as compared to cases filed in October 2007.  According to the New York Times, this increase in the number of bankruptcy filings is due in large part to the specific nature of this particular economic crisis.  

Besides the usual reasons why people look for bankruptcy protection, such as job loss, medical bills, divorce, the central reasons for the increase in Chapter 7 and Chapter 13 bankruptcy filings during this economic crisis have more to do with the abrupt drop of home values, unstable incomes, and the “credit crunch”.

It seems that more people are turning to bankruptcy lawyers during this economic downturn than during the tech bust because of how the mortgage crisis has affected the lending practices of financial institutions.  Essentially, where debtors used to be able to avoid bankruptcy by obtaining more credit, and tried to stay afloat for a while longer, the current “credit crunch” has made it nearly impossible for many to obtain new credit cards, refinance their home mortgages, or get a home equitiy line of credit, due to the banks’ pull back on lending.  This has, in turn, driven many debtors to file for bankruptcy that would have otherwise avoided it.  This does not mean that many people aren’t trying their best to avoid filing, as seen in a key statistical comparison to the filings in 2001.

In recent studies, it was shown that the typical family who filed for bankruptcy in 2007 carried 21% more secured debt and 44% more unsecured debt than people who filed in 2001, even though average income among those filing for bankruptcy remained static over those six years.  So although income stayed the same, debt rose, illustrating the attempt by debtors to put off bankruptcy as long as possible while trying to get back on their feet.  Studies also show that filings increased mostly in places where real estate values skyrocketed and then crashed, including Corona, Murrieta and Temecula in Riverside County.

Although filing for bankruptcy and hiring an attorney is not anyone’s idea of a good time, for many Riverside and San Bernardino County residents it’s the most sensible solution to get their financial sanity back, and the best path toward a well deserved fresh start.

To read the NY Times article,

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How to Pay Off Your Current Car Loan in Bankruptcy with a New Loan and Only Owe the Current Value of the Car…

Wednesday, November 5th, 2008

Riverside, California is in the heart of the car capital of the United States – if not the entire world. Look down any street in Redlands, Canyon Lake or even Corona, for that matter, and you will see rows of beautiful new cars in parking lots and driveways all around you. Most of those car owners are making large payments on their cars, so here’s a tip for those who need to file a Chapter 7 bankruptcy case and also want to reduce their car loan balance and payments.

Many bankruptcy attorneys know that a debtor (borrower) may redeem a car when filing a Chapter 7 bankruptcy case. Redemption is a right granted under Bankruptcy Code Section 722 that gives the borrower the right to purchase an asset at its current fair market value when a Chapter 7 case is filed.

Most borrowers don’t have the available cash to buy their car out of the Chapter 7 bankruptcy estate, though. So, it would seem that Bankruptcy Code redemption doesn’t help most borrowers.

What most debtors – and even many bankruptcy attorneys – don’t know is that there are actually a few lenders that will give borrowers a new loan on their car – while in bankruptcy – to pay for a redemption of the car. So, many borrowers who otherwise wouldn’t be able to redeem their cars now can.

You might ask, “Why would a person want to take out a new loan to redeem their car”?

There are two really good reasons: The new car loan will be for the current fair market value of the car (almost always less than the balance of the existing car loan), and the payments will also be lower.

Often times redemption lenders are able to help a borrower “purchase” the car back for as little as one half the current loan balance and with one half the current car loan payments. If this seems like a good deal for you, you should ask your bankruptcy attorney about it…

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Chapter 7 Bankruptcy Filings in Riverside Courthourse

Friday, October 31st, 2008

During the month of October, there were more than 1400 Chapter 7 bankruptcy filings in the Riverside Courthouse. The 10 cities or towns accounting for the most filings for that month were: Corona, Fontana, Hemet, Moreno Valley, Murrieta, Ontario, Rancho Cucamonga, Riverside, Temecula, and Victorville. Unfortunately, these results are identical to the month of September, suggesting that the trend of high filings within those afflicted areas is not changing for the better. Other Inland Empire cities worth mentioning that also produced a significant number of filings include: Hesperia, Indio, Lake Elsinore, Menifee, Perris, and Rialto.

Astoundingly, these 1400 + bankruptcy filings came from people across 87 different cities and towns within the area, illustrating that no area is immune from the effects of a troubled economy.

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