Monthly Archives: August 2011

How to File a Low Cost Bankruptcy with a San Mateo County Lawyer

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To file a low cost bankruptcy in San Mateo County choose West Coast Bankruptcy Attorneys.  The first issue to resolve is whether filing for bankruptcy protection is in your best financial interest.  During your free consultation, and not all attorneys will provide their time for free, we will discuss your income, expenses and assets to determine if you qualify to file a chapter 7 bankruptcy, or if there is a reason why filing a chapter 13 case would be best.  In most chapter 7 and chapter 13 cases you will be able to keep all of your stuff like household goods, vehicles and other assets.  After determine that bankruptcy is an option that can help you we will discuss the costs to file bankruptcy.

Reasonable Attorney Fees

All of our attorney fees are extremely reasonable and they are flat fees.  You may call us a hundred times with a hundred questions and the amount you pay us will be the amount you agree to in the retention agreement.  Some attorneys will charge you for each call or limit you to only a few phone calls.  Not only do we not limit your contact with us, but you will speak to an actually attorney to have your questions answered.  You should not accept have to speak with unlicensed and inexperienced paralegals or legal assistants.  You should not be paying $2,000 or more in attorney fees for a no asset Chapter 7 bankruptcy case.

Least Expensive Required Courses and Credit Reports

The reforms of the Bankruptcy Code in 2005 require that two courses be completed when filing for bankruptcy.  The first course must be completed before the bankruptcy case is filed.  The second course is completed after the case is filed.  At West Coast Bankruptcy Attorneys we do not increase the cost of these courses to make more money.

1. Credit Counseling Course – FREE or $5.00 Per Person

The first course, Credit Counseling, must be completed before your bankruptcy case is filed. We have found a Court approved provider of the Credit Counseling course for FREE if your income is less than the median income for the number of people in your household. Other attorneys will not only charge you for the course, but increase the fee for the course by $20-$30 so that they pocket some money each time a client of theirs completes the course. We believe this is wrong and a disservice to our clients in their time of greatest need.

2. Financial Management Course

The second course, Financial Management Course, must be completed within 45 days of the Meeting of the Creditors. See the Chapter 7 Time Line or Chapter 13 Time Line for all the steps necessary to complete the bankruptcy process. At West Coast Bankruptcy Attorneys we are constantly searching for the lowest prices for this course. We have found a Court approved provider of this course for $9.99 per person. Again, other attorneys will not only charge you for the course, but increase the fee for the course by $20-$30 so that they pocket some money each time a client of theirs completes the course. We believe this is wrong and a disservice to our clients in their time of greatest need.

3. Credit Reports

At West Coast Bankruptcy Attorneys we only charge are clients exactly what it costs us to obtain your credit report from all three credit bureaus. Again, other attorneys will not only charge you for the credit report, but increase the fee for the credit report by $20-$60 so that they pocket some money each time a client they obtain a credit report for their clients. We believe this is wrong and a disservice to our clients in their time of greatest need.

At West Coast Bankruptcy Attorneys we are committed to providing the best bankruptcy experience for the lowest cost possible.  We do not increase the costs of the required courses or credit reports to pocket extra money. Call us now toll free at 1-877-9NEW-LIFE to start your new life without your burdensome debts.  Visit our Redwood City bankruptcy lawyers or Fremont bankruptcy lawyers on-line now.

More Trouble for the Dodger’s Bankruptcy Here Comes The Ad Hoc Creditors Committee of Season Ticket Holders

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On August 16, 2011, a group of season ticket holders filed documents with the bankruptcy court to attempt to form an ad hoc creditors committee.  This ad hoc creditors committee would represent the interests of season ticket holders of the Dodgers.  The parties seeking to create the ad hoc committee are Frank Sinatra and Jeffrey Berkowitz (1958), Wershow Ash Lewis (1964), Roland and Susan Simons (1981), Jack/Vera/Mark Stutman (1962) and Custom Services (1981).

The formation of a committee by unsecured creditors is common in large chapter 11 bankruptcy cases when significant assets are at stake.  Section 1102 provides authority for the United States Trustee to appoint a committee.  In large chapter 11 cases there can be hundreds of unsecured creditors all with the same interests.  It is not efficient for each unsecured creditor to hire an attorney, so a committee of the largest unsecured creditors is formed and the same attorney will represent the committee to make sure the unsecured creditors’ interests are protected.  The unsecured creditors committees’ attorney is paid by the debtor’s estate and not directly by the unsecured creditors.

The Dodgers Season ticket holders are not unsecured creditors though, or creditors at all.  It is not common for groups with other interests to form a committee to oversee the reorganization of a bankruptcy company.  Members of the committee have a fiduciary duty to represent the entire class they represent and make sure the entity that filed bankruptcy treats them properly under the bankruptcy code.

What will the committee of season ticket holders actually accomplish?  It will be interesting to see whether the United States Trustee and the bankruptcy court see the value of a committee to represent the interests of the season ticket holders at all.  None of the season tickets holders have a direct claim or are owed money from the Dodgers.  They will still be able to go to all of the games they have paid for during the season.  Will the formation of a committee of season ticket holders somehow make the Dodgers field a better team or somehow help to reorganize the Dodgers?

The formation of a committee of season ticket holders will increase the cost to administer the bankruptcy case.  The committee’s attorney is usually paid from the estate of the entity that files for bankruptcy.  The Dodgers will most likely argue that this additional expense is unnecessary.  You never know though.  Arguably the season ticket holders are the lifeblood of any organization.  Without the loyal season ticket holders that renew their seats each year most professional sports teams would not enjoy much financial success.  The Dodgers may recognize this and allow the season ticket holders to be part of the process that creates the new Dodgers post-bankruptcy.  Time will tell.

If you need additional information about creditor committees or bankruptcy in general you may contact our Redwood City bankruptcy lawyers or Fremont bankruptcy lawyers.

How Does the U.S. Debt Downgrade Affect Consumers?

By Kitty J. Lin, Attorney at Law

On Friday, August 5, 2011, Standard & Poor’s downgraded the U.S. Treasury Debt from an AAA rating to an AA+ rating.  S&P indicated that one of the major reasons why they decreased the rating was due to Congress’ plan to reduce the country’s debt did not satisfy S&P’s standards for stabilizing our country’s economic situation.  S&P’s explanation seems hypocritical given that S&P was one of the reasons we are in this financial crisis.  S&P had given high credit ratings to companies that did not deserve it and that was a factor that sank our economy.  A lot of companies that were issuing subprime mortgages were enjoying the effects of being in S&P’s favor until the bottom dropped out from underneath them when the real estate bubble burst.  This led to millions of Americans seeking protection from the bankruptcy court.

One of the biggest effects of the downgrade was stock volatility.  Once news of the debt downgrade hit, stocks tumbled drastically on Monday following the debt downgrade.  Consumers were panicked, and a lot of them flocked to U.S. Bonds, which is the safe haven in the world of investments.  On Tuesday, August 9, 2011, the Federal Reserve expressed their doubts about the economic recovery and promised that they were going to keep the federal funds rates at 0 to 1/4% until mid-2013.  This is the longest commitment period the Federal Reserve has ever made to keep the rates low.  The federal funds rates are what banks pay to borrow money.  Thus, theoretically, the lower rates the banks have to pay to borrow money the lower the rates consumers would have to pay to borrow money from the banks.  This is good news for consumers facing a credit crunch.  Hopefully consumers will be able to obtain better rates or refinance their existing debts to prevent bankruptcy.

One of the silver linings from this crisis is that mortgage rates will decrease or remain low.  Now is the perfect time to buy a home or refinance your loan.  Home values are still low, and now mortgage rates are also low.  If your financial situation allows you, now is the time to take advantage of the crisis and put yourself in a better position for the future.

Unfortunately, consumers that wish to just keep their money in their savings account with their bank will not see much increase.  In fact, the savings rate is practically non-existent.  Currently many people are trying to keep their money safe in banks.  Demand for loans still remains low, even with attractive low rates.  Most consumers currently do not have the ability to capitalize on the low rates; most of America is trying to survive on a daily basis and are living from paycheck to paycheck, never knowing if they will still have a job the next month.  Consumers in this group are essentially bankrupt and are in danger each month of defaulting on their debt payments.  Consumers that are in this group would not be affected much by the debt downgrade, as they normally do not have the credit to take advantage of the low mortgage rates or the available equity in their homes to refinance their loans.

If you need additional information about municipal bankruptcy cases or bankruptcy in general, you may contact one of our bankruptcy attorneys or bankruptcy lawyers.

Dodgers and Major League Baseball Enter into Financing Agreement

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The fact that the Los Angeles Dodgers have filed for bankruptcy protection is widely known after a month of headlines and sparring with Major League Baseball and Commissioner Bud Selig.  In most Chapter 11 bankruptcy cases the entity that files for bankruptcy protection seeks financing to continue to operate while it restructures its finances in bankruptcy.  The Dodgers are no different.  After all the legal wrangling and accusations, the Dodgers and MLB entered into a $150 million financing agreement on August 5, 2011.

The Dodgers wanted to enter into a financing agreement with Highbridge, a hedge fund.  Major League Baseball submitted its own offer to provide financing to the Dodgers with better terms.  The problem is the Dodgers believe MLB is conspiring to take the Dodgers over.  It also appears Frank McCourt is infusing his poor decision making into the bankruptcy case.

The MLB financing provides significantly better terms than Highbridge, such as the elimination of $9,750,000 in fees, reduced the percentage rate by 3 percentage points, did not require the Dodgers to encumber assets, contained fewer ways to default on the financing.  Even though the MLB financing is superior the Dodgers still did not entertain MLB offer.  One reason appears that McCourt personally guaranteed millions of dollars in closing fees if the Highbridge financing proposal was not entered into by the Dodgers.  So even though the MLB financing is superior and in the best interests of the Dodgers, it is not in the best interests of Mr. McCourt personally.

For the Dodgers to obtain financing the Bankruptcy Code requires the Dodgers to establish they are not able to obtain unsecured credit, the credit transaction is necessary to preserve the assets of the Dodgers and the terms of the transaction are fair, reasonable  and adequate given the circumstances of the Dodgers and the proposed lender; and that no better offers are on the table for consideration.  MLB has a vested interest and an obligation to preserve its brand and making sure that each franchise is successful.

The Dodgers then argued that MLB did not have the ability to provide financing for the Dodgers.  According to court documents MLB has a credit line of $250 million to draw from and approximately $400 million in the Major League Central Fund.  Even in the face of superior financing terms and the ability to provide the financing, the Dodgers and Mr. McCourt still refused to allow MLB to help them.  The Dodgers and Mr. McCourt believed that any financing accepted from MLB would come with control and the ability to harm the Dodgers.  The Dodgers even unsuccessfully tried to require the deposition of Commission Bud Selig.  Traditionally courts have shielded high level executives from such depositions when other witnesses can provide the same testimony.  On July 14, 2011, the Honorable Kevin Gross denied the Dodgers request to depose Commission Selig and denied almost all of the Dodgers document requests.

Today the Dodgers filed documents with the bankruptcy court detailing agreed upon terms of the financing deal with MLB totaling $150 million.  The maturity date of the financing is November 30, 2012.  For more information about bankruptcy contact one of our Redwood City bankruptcy lawyers or Chapter 13 bankruptcy lawyers in Redwood City.

City of Central Falls Seeks to Reject Collective Bargaining Agreements

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On August 1, 2011, The City of Central Falls, Rhode Island, made history by joining the short list of municipalities to file for bankruptcy protection under Chapter 9, Bankruptcy Case No. 11-13105.  Central Falls joins another recent municipal bankruptcy that is wrapping up, The City of Vallejo, California.  Central Falls will have to rely upon some of the rulings from the City of Vallejo case given that few municipalities have actually filed under Chapter 9 of the bankruptcy code.  This result in little case law or precedent to help guide Central Falls through this process.  Central Falls is facing a $5.6 million shortfall for fiscal year 2012 and their general fund will be depleted in August 2011.  Hopefully municipal bankruptcy filings will not become common place in the United States.  Unfortunately the reductions in Federal spending, reductions in sales tax and property tax, reductions of other sources of income for local governments do not make the outlook very good.

Like many individuals that have to file for bankruptcy protection under Chapter 7 or Chapter 13, Central Falls tried to stay out of bankruptcy court.  Central Falls raised taxes on its population of approximately 20,000 residents a staggering 19.32% in 2011.  Central Falls also restricted overtime pay, reduced the number of city employees eligible to receive benefits, eliminate benefits for part-time employees, closed the public library, closed the community center and even shared services with surrounding communities to try and prevent filing for bankruptcy protection.  These drastic cuts in services and benefits to existing city employees still did not close the projected depletion of their general fund or $5.6 million budget shortfall.

On August 1, 2011, Central Falls filed a motion with the Bankruptcy Court seeking approval to reject collective bargaining agreements with the Central Falls Police Department Fraternal Order of Police, International Association of Fire Fighters Local 1485 AFL-CIO and the Rhode Island Council 94 American Federation of State County and Municipal Employees AFL-CIO Local 1627.  According to Central Falls court documents this is the single most important step in getting their fiscal budget balanced and eliminating future shortfalls.  Two of these three collective bargaining agreements expire in June of 2012 while one agreement has already expired.  One of the requirements for a municipality to file for bankruptcy protection under Chapter 9 is that a good faith effort is made to negotiate concessions and try to reach an acceptable agreement prior to the bankruptcy filing.  Unfortunately Central Falls and the unions were not able to agree on concessions that would provide enough cuts to allow Central Falls to stay out of bankruptcy court.  The main issue to watch will be if Central Falls goes after the retirement benefits of retirees of the three unions.  Time will tell.

You may obtain more information about personal and small business bankruptcy from our Redwood City Bankruptcy Lawyer or Chapter 7 bankruptcy lawyer in Redwood City.

Debt Settlement Prior to Filing Bankruptcy

By Kitty J. Lin, Attorney at Law

Once you start missing payments to your creditors, chances are, after attempting to collect from you, your creditors will sell or transfer your debt to third party collection agency.  The objective of these collection agencies is to try to get some sort of payment from you.  Most of these agencies try to call you or send you letters indicating that they are willing to settle your debt for less than what you owe to the original creditors.  The question then becomes, should you take them up on that offer?  The answer is, it depends.  Here are some scenarios:

You are about to file for a Chapter 7 bankruptcy

If you are about to file for a Chapter 7 bankruptcy, which discharges all unsecured debt, then the obvious answer to the question of whether you should take the collection agencies up on their offer to settle the debt is “NO.”  There is no point in settling a debt which you intend on discharging through your Chapter 7 bankruptcy case.  Additionally, any debt you pay to creditors within 90 days prior to filing your bankruptcy case is considered a preference payment.  This means that the trustee may potentially go after the creditor and request the money (paid within 90 days) be paid back to your bankruptcy estate.  The trustee will then pay the money to your creditors equally.

You are about to file for a Chapter 13 bankruptcy, and you will pay less than 100%

If you are about to file for a Chapter 13 bankruptcy, and your monthly Chapter 13 payments will not pay 100% of the debt, the answer will depend on what percentage will be paid to unsecured creditors.  If your creditors are offering to settle your debt for 50% of what you owe, and you will only be paying 10% to your unsecured creditors, then the obvious choice is to reject the settlement offer.  If you will be paying 50% to your unsecured creditors in your Chapter 13 plan, and the creditor is offering to settle your debt for 25% of your debt, then it may be a good idea to take the creditors up on their offer and settle the debt for less than what you owe.  If you do not know approximately what percentage you will be paying to your unsecured creditors in your Chapter 13 plan, then it may be better to err on the side of caution and reject the settlement.  Remember, your creditors only get paid if they file a proof of claim in your Chapter 13 bankruptcy case.  If they do not file a proof of claim, they will not be paid.

You are about to file for a 100 % Chapter 13 bankruptcy

If, based on your circumstances, you know you will be paying off 100% of your creditors in your Chapter 13 plan, then your best bet would be to take the creditors up on their offers and settle your debt prior to filing for your Chapter 13 bankruptcy.  Chances are, if you are a 100% plan, you will need to pay a little interest on top of the 100% payment as well in the plan.  Thus, whatever offer your creditors are giving you would most likely be more favorable than if you were to pay them through your Chapter 13 plan, as you will be paying them over 100% in the plan if they file a proof of claim.  The preference payment issue would not come up in a 100% Chapter 13 plan, as all your creditors will be paid at least 100% of the debt

You do not qualify for bankruptcy

If you do not qualify for bankruptcy, or would like to avoid bankruptcy, then negotiating with these creditors is your best option to settle your debt.  Remember, you can always negotiate with these creditors!  You do not have to take their first offer!

If you would like to know more about your options, feel free to contact an experienced Fremont bankruptcy attorney or San Mateo bankruptcy attorney today at 877-9NEW-LIFE or 877-963-9543 for a free consultation.