What is the California Homestead Exemption for a Married Person if the Spouse Does Not Join in the Bankruptcy?
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
Property exemptions are a complicated, but critically important, aspect of bankruptcy law that incorporate both federal and state law. California has two systems of exemptions that apply to bankruptcy cases, known as System 1 and System 2. System 1 allows for higher exemptions for assets like a homestead property, so it may appeal to people who have a large amount of equity in their home. This system draws directly from provisions in California’s Code of Civil Procedure pertaining to the enforcement of money judgments. If only one spouse files for bankruptcy, the question arises of how much of ..read more
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Some Debtors Take Out Loans to Help With the Costs of Bankruptcy
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
Bankruptcy is often a very effective means for people in financial distress to obtain relief from their debt burden, but it can involve its own expenses. As ironic as it might seem, some debtors may feel that they must go further into debt in order to pay for their bankruptcy. Obtaining a loan during a bankruptcy proceeding is difficult if not impossible. Taking out a loan shortly prior to bankruptcy, while providing the debtor with much-needed funding, may cause serious problems in the bankruptcy proceeding itself. People considering bankruptcy should consider their options very carefully. Un ..read more
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Debtor Moves for Dismissal of Involuntary Chapter 7 Bankruptcy Petition
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
A debtor in an involuntary Chapter 7 bankruptcy case has made several unsuccessful attempts to dismiss the case, with the most recent attempt drawing a mild rebuke from the court. In re Viola, No. 4:11-cv-00817, order (N.D. Cal., Mar. 19, 2014). The district court held that the debtor lacked standing to challenge some parts of the case in that forum, and should have raised the issues in the bankruptcy court. It further found that he had not shown cause for relief from the bankruptcy court’s judgment or its own prior orders. The court notes in its most recent order that the debtor is a “convict ..read more
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U.S. District Court Reviews Jurisdiction to Hear Appeals of Bankruptcy Court Orders
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
A district court recently ruled on an appeal of several bankruptcy court orders, holding that it lacked jurisdiction over the matter. Sain v. Isles at Bayshore Master Assoc., Inc., et al, No. 1:14-mc-20338, opinion (S.D. Fla., Jan. 31, 2014). In its opinion and order, the court reviewed the limited statutory basis for a district court’s jurisdiction over a bankruptcy appeal. The court found that the debtors’ appeal did not fit within the three types of situations defined by federal statute. The debtors are a married couple who sought to strip off several liens from their homestead property, a ..read more
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Appellate Court Reviews Procedures for “Chapter 20” Lien Stripping
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
An inventive use of federal bankruptcy law enables some debtors to eliminate liens from their homes through a process known as “Chapter 20.” The name refers to the sum of 7 and 13, since the process uses both Chapter 7 and Chapter 13 proceedings. Not all courts agree that Chapter 20 lien stripping is permissible after the changes made by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Federal courts in different parts of California have reached different conclusions about Chapter 20. The Fourth Circuit Court of Appeals on the East Coast joined the ranks of courts ..read more
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Bankruptcy Court Rules on Chapter 13 Debtors’ Motion to Value Homestead Property
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
A married couple in a Chapter 13 bankruptcy proceeding filed a motion to value the lien on their homestead property, a condominium in Florida. This type of motion can be useful to debtors who believe that the value of their property is less than the total amount of claims secured by liens. A court can rule that the amount of secured claims in excess of the property’s value is unsecured in a process often known as “lien stripping.” The Florida couple’s case involved liens held by several homeowners’ associations (HOAs) for unpaid assessments. In re Sain, No. 13-13325, order (Bankr. S.D. Fla., O ..read more
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Lenders Sometimes Raise Unusual Arguments to Oppose Discharge of Student Loans in Bankruptcy
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
Student loan debt is a growing burden for people in Los Angeles and all over the country, as the cost of higher education seems to grow faster than the job market. Student loan debt is also one of the few types of debt that is almost never subject to discharge in a bankruptcy case. A recent article in the Wall Street Journal gave several examples of the lengths to which educational lenders sometimes go to oppose discharge of these debts. Some of the stranger arguments did not convince the judges who decided those specific cases, but the mere fact that lenders feel comfortable raising them in c ..read more
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Credit Card Debt in Chapter 7 and Chapter 13 Bankruptcy
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
Credit card debt can be incredibly stressful for people experiencing financial difficulties. High interest rates and late fees, along with increasingly high minimum payments, may make final payment of the debt seem impossible. The bankruptcy system may allow the discharge of some or all of a person’s credit card debt. It prevents discharge, however, of debt(s) incurred fraudulently or in bad faith, such as if a person charges a large amount to a credit card shortly before a planned bankruptcy filing. Unsecured vs. Secured Debt Most credit card debt is unsecured, meaning that the creditor does ..read more
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Student Loan Borrower Appeals Nondischargeability of Student Loan Debt in Bankruptcy to U.S. Supreme Court
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
Student loans are not dischargeable in Chapter 7 or Chapter 13 bankruptcy, except in narrowly defined circumstances. A debtor must establish that continued payment of the student loan debt would cause “undue hardship” to them and their dependents. 11 U.S.C. § 523(a)(8). Most U.S. jurisdictions apply a three-part test to determine whether a debtor has met this burden. A student loan debtor is currently appealing the denial of discharge in a Chapter 7 case to the U.S. Supreme Court, arguing in part that the three-part test is improper, or alternatively that it should be modified. Tetzlaff v. Edu ..read more
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A Brief History of Student Loan Discharge in Bankruptcy
Law Office Of Devin Sawdayi | Los Angeles Bankruptcy Lawyer Blawg
by Devin Sawdayi
2y ago
Under the federal Bankruptcy Code, certain debts are not eligible for discharge by a bankruptcy court at the end of a case. Nondischargeable debts include certain tax debts, 11 U.S.C. § 523(a)(1); spousal and child support, id. at § 523(a)(5); and debts that resulted from fraud, theft, and other deceptive or unlawful acts, id. at §§ 523(a)(2), (4), (6). For many, perhaps most nondischargeable debts, a rationale based on public policy seems clear. This might not be the case, however, with regard to student loans, including both public loans, which are backed by the federal government, and priva ..read more
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