Southern California Bankruptcy Law Blog

Category Archives: Debt

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Bankruptcy vs Debt Settlement

Posted in Debt

In a recent issue of the L.A. Times, Liz Weston compared bankruptcy and debt settlement as ways to deal with overwhelming debt.  Her column was good, but given the limited space she had, it was a bit brief.  In this post I will expand on her discussion.   I.  Debt Settlement   The idea behind debt… Continue Reading

Zombie Debt Redux

Posted in Debt

In today’s LA Times, Sean Pyles wrote a nice summary of the problem of zombie debt. He began with the observation that when the statute of limitations has passed on debt collection actions, creditors are estopped from suing you to collect.  However, I suspect that in the interest of saving columnar space, he elided over… Continue Reading

Yet More Debt Collection Scams

Posted in Debt

The National Association of Consumer Bankruptcy Attorneys (“NACBA”) has asked its members ― I am one ― to post the following warning on their blogs: Telephone-Scam Soliciting Wire Transfers Prompts NACBA and Vermont Attorney General to Issue Consumer Warning Across the country, consumers are falling prey to a new scam targeting people who have filed… Continue Reading

More Debt Collection Scams

Posted in Debt

I have written many times on debt collection scams, and they just keep on coming.  If the scamsters would devote their efforts to legitimate labor, they might be very successful. James Rufus Koren and Jim Puzzanghera wrote in the October 2, 2015, L.A. Times: Two auto lending companies controlled by low-profile L.A. billionaire Don Hankey… Continue Reading

Debt Settlement Scams

Posted in Debt

You’ve got too much debt to ever pay off.  What can you do?  Some people facing gargantuan debt don’t want to avail themselves of bankruptcy, the most effective way of dealing with debt, and instead hire a debt settlement company to negotiate with their creditors.  The following exchange appeared in Liz Weston’s March 13, 2016… Continue Reading

Debt Collection Scams

Posted in Debt

Although I have written at length on debt collection scams, I am still amazed by the fact that they continue to proliferate.  You’d think the word would get out far enough so that people would be on their guard against these Frauds-R-Us franchises.  Not so. In yesterday’s (January 22, 2016) L.A. Times, David Lazarus discussed the… Continue Reading

Can A Creditor Garnish My Social Security Check?

Posted in Debt, Tax debts

I have written in great detail about the treatment of social security income in a bankruptcy case.  What happens outside of bankruptcy?  The answer is obvious:  It depends. Well, that was a worthless answer, wasn’t it?  Not so fast.  What if I throw in some statutory authority?  And if you act right now, operators are… Continue Reading

The Feds Are Fishing For Loan Shark Collectors

Posted in Debt

Many ― but not all ― debt collectors working for loan sharks are alleged humans who do the bidding of the dark side of the force.  I have written about abusive debt collectors several times, in unflattering terms.  It turns out that I’m not the only one who has noticed their abusive tactics.  The feds… Continue Reading

Obamacare And Bankruptcy

Posted in Debt

One of the putative motivations for enacting Obamacare (a.k.a. The Patient Protection And Affordable Care Act; have fun reading it, and make sure you have industrial quantities of coffee on hand) was to ensure that no one would be financially ruined by a health care catastrophe.  After all, many bankruptcies are filed because of massive… Continue Reading

Death And Student Loans

Posted in Debt

I have already written about discharging student loans in bankruptcy.  As I discussed in that previous blog post, although under special circumstances it is possible to discharge them, it is devilishly hard. I recently came across an interesting twist on student loans in the bankruptcy context that I thought might interest you.  The setting:  A… Continue Reading

Will The City Of Chicago File For Bankruptcy?

Posted in Debt

My last post was motivated by an interesting article in the L.A. Times, written by Chris Megerian, Melody Petersen, and Dean Starkman, that discussed the recent ruling by Judge Christopher Klein, the judge in the Stockton, California Chapter 9 bankruptcy.  As you may recall, the ruling put pension payments on the bankruptcy chopping block. In… Continue Reading

The Chapter 13 Bankruptcy Debt Limits And An Undersecured Mortgage On A Principal Residence

Posted in Chapter 13, Debt, Home Loans

Chapter 13 bankruptcy has an important limitation.  If the debtor’s debts are too large, Chapter 13 is unavailable: Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $383,175 and noncontingent, liquidated, secured debts of less than $1,149,525, or an individual… Continue Reading

The Wonderful World Of Loan Sharks

Posted in Debt

What’s in your wallet?  It’s a loan shark!  That’s how many people feel when they consider their ever-increasing debt burden.  Unfortunately, many of those same people continue to feed the shark by patronizing loan sharks. John Oliver recently skewered loan sharks on his Sunday show.  Jon Healy of the L.A. Times published an article on… Continue Reading

Fraudulent Transfers VI

Posted in Debt

This is the sixth and last post in a series in which I discuss fraudulent transfers.  This one deals with defenses against fraudulent transfers avoidance actions. F.         Defenses To Fraudulent Conveyance Avoidance Aside from the problem of collectability — the recipient of the fraudulent transfer may be an impecunious, judgment-proof person — the trustee may… Continue Reading

Fraudulent Transfers V

Posted in Debt

This post is the fifth in a series in which I discuss fraudulent transfers.  This one deals with the consequences of fraudulent transfers, and the importance of prebankruptcy planning. E.         Denial Of Discharge And The Loss Of Assets A discharge may not be available to a debtor who engages in prepetition fraudulent transfers: The court… Continue Reading

Fraudulent Transfers IV

Posted in Debt

This post is the fourth in a series in which I will discuss fraudulent transfers.  The second post discussed the sources for a trustee’s authority to avoid a fraudulent transfer.  This one deals with the mechanics of fraudulent transfer avoidance.              D.        Avoiding Fraudulent Conveyances             1.        The Power To Avoid The Bankruptcy Code’s fraudulent… Continue Reading

Fraudulent Transfers III

Posted in Debt

This post is the third in a series in which I will discuss fraudulent transfers.  It covers the statutory definitions.  This one’s a bit long because the definitions are a bit labyrinthine.  If you think it’s dry, then avoid Syrahs and stick to Rieslings. C.        The Definition Of Fraudulent Transfer 1.        The Intent Definition i.         … Continue Reading

Fraudulent Transfers II

Posted in Debt

This post is the second in a series in which I will discuss fraudulent transfers.  I have been told that my posts are too long.  Therefore, today I’ll briefly discuss the source of a bankruptcy trustee’s fraudulent transfer avoidance powers. B.        The Trustee As Heir To Creditors’ Avoidance Power One of the complications associated with… Continue Reading

Fraudulent Transfers I

Posted in Debt

In this series I will discuss fraudulent transfers, a concept that has some similarities to preferential transfers — our previous topic — but has much more serious consequences, especially in bankruptcy.  Today I’ll start with a folksy introduction.  In subsequent posts I’ll deal with the much more technical legal aspects of fraudulent transfers. A.        Introduction… Continue Reading