Los Angeles Bankruptcy Lawyer Blog

A recent report from CNNMoney states that American consumers shrunk credit card debt by 11 percent in 2011 and the average amount of credit card debt Americans have dropped in all 50 states.

This is certainly good news as a reliance on credit cards rarely helps a person get on their feet financially. Instead, it usually does the opposite and keeps them in a constant frustrated state. While the article talks about debt being slashed nationwide, it doesn't point out that bankruptcy in Los Angeles and elsewhere may have been a major factor in eliminating this debt.

Los Angeles bankruptcy lawyers would note that more than a million people each year file for bankruptcy and that's nothing to be ashamed of. Our nation's economy has made getting by difficult. With job loss, upside down mortgages and expensive medical bills all major factors, filing for bankruptcy has helped millions of Americans get on their feet again.

Even though this article doesn't factor bankruptcy into the process, it is a major reason why credit card debt is shrinking. That's because when a person files for bankruptcy, they are allowed to get rid of all debt, including credit cards.

So, while the news article may imply that consumers are doing a superb job of paying off their debt, bankruptcy must be considered in the equation. Bankruptcy is a major way for consumers to work out their debt problems.

According to the article, in 2010 the average credit card balance for Americans was $7,404. That shrank to $6,576 in 2011, according to a report by CreditKarma.com. That was data based on 300,000 of its users. Credit card debt slipped in 2010 as well, by about 7 percent.

The report is actually in contradiction to reports in November that Americans had added more credit card debt in that month than in the last 10 years. Some analysts believe that's a testament to consumers' faith in the economy, which produced about 200,000 new jobs at the end of the year.

Mortgage debt stayed steady, CNNMoney reports, with an average amount of debt sitting at $173,876. Californians, not surprisingly, had the most mortgage debt, at $313,749 per person. Auto debt actually was the only type of debt that increased -- up 2 percent to about $15,504 per person. The average consumer held a total debt of $210,236 by the end of 2011, a 1 percent drop from the year before.

When most people consider their debt, they don't look at their house because it is usually considered an investment that will turn a profit. But consumers today are more likely to see it as a liability, as many mortgages are underwater and real estate prices could take decades to recover.

That's another reason why bankruptcy in Los Angeles is a smart option. If someone is struggling with credit card debt as well as a bad mortgage, bankruptcy could be an option to get the person out of the position in which they find themselves.

Continue reading "Can't Shrink Your Credit Card Debt? Consider Los Angeles Bankruptcy" »

Historic Eastman Kodak and Twinkie-maker Hostess are two companies that recently filed for corporate bankruptcy protection, which has shocked people not familiar with the bankruptcy process and set off campaigns to help the companies.

Los Angeles bankruptcy lawyers recognize that corporate bankruptcy in Los Angeles is highly beneficial to companies who want to have a better future.

In most cases, filing for bankruptcy simply means the company wants to improve their future. It's the same for consumers. No one files for bankruptcy because they are uninterested in improving their financial outlook.

We reported on our Los Angeles Bankruptcy Lawyer Blog last year that multi-billionaire Donald Trump has filed for bankruptcy four times through his various companies.

Most people wouldn't consider Trump a failure at business because he has ridiculously large corporations and makes millions of dollars a year. Yet, he filed bankruptcy not because he wanted to see his companies flounder, but because he recognized the benefits to using bankruptcy protection laws for his businesses. The same is happening for Kodak and Hostess.

The Wall Street Journal reported recently that Eastman Kodak filed for bankruptcy with a goal of cutting back on what it owes retirees and forcing large technology companies to pay to use its patents. The newspaper reports that the company is hoping to shed its photography side of the business -- on which the company was built in 1889.

In the other case, Hostess, the sweet treat company that makes the iconic Twinkies, has filed for Chapter 11 bankruptcy protection. The company filed for bankruptcy three years ago and was able to restructure.

It is doing it again because it has $860 million in debt, mostly due to expenses tied to its labor force, The New York Times reports. The company has 100,000 or more creditors and many of them are labor unions and pension funds representing its workers. By filing for bankruptcy, the company may be able to lose some of its debt obligations and shrink its workforce while still pumping out the sweet treats that many Americans buy.

The bottom line here is that both of these companies see the benefits of corporate bankruptcy. It is a sign that both companies have plans to continue thriving, but need a little help. Getting lenders to continue allowing a company to borrow money can be a problem when debt creeps up.

Filing for bankruptcy allows the debt that is causing a company to struggle to be dismissed while getting creditors off the back of corporate officials. And if creditors are kept at bay, that can allow the business to get back on track.

While the issues are different for these two iconic companies, their problems are similar. They need to shed debt to improve creditor rating and the availability of creditors. Without this improvement, they will flounder. Bankruptcy provides the way to improve the future of the company.

Continue reading "Hostess, Kodak Show Why Los Angeles Corporate Bankruptcy Is Beneficial" »

The sports agent whose life inspired the Tom Cruise character for the hit movie "Jerry Maguire" recently filed for bankruptcy in Los Angeles, showing that celebrities and anyone else can use these laws to their advantage.

What this story shows is that sometimes it's not job loss, medical bills or credit cards that lead to financial problems, but also dependency issues. A recent story from the Associated Press looks at Leigh Steinberg's recent struggles, which show that a life of alcoholism, especially following divorce, can create financial issues so deep that bankruptcy is a sound solution.

Our Los Angeles bankruptcy lawyers have seen many celebrities dip into foreclosure, lose money on major investments and feel the same effects of the poor economy that every else does. Simply being in a different tax bracket doesn't mean celebrities are immune to the same problems.

The article reports that he would sit in his balcony overlooking Newport Bay drinking. He'd do it in bed and before driving. He even got arrested after people reported he was screaming and running around drunk in public in upscale Newport Beach.

The news article goes on to state that he secured major contracts for big-name, NFL Hall of Fame players, was on the cutting edge of voiding years in contracts, securing big signing bonuses and estimates state he earned more than $100 million in his career.

But he recently decided to use the protection of bankruptcy in Los Angeles to his advantage, listing that he has nearly $500,000 in assets, but more than $3.1 million in debt. The paperwork currently shows he has a monthly net income of $3.33 million, yet owes millions in back rent and owes players, coaches and taxes.

He said recently that he has been sober for nearly two years, but the problems from two years ago have caused him to run into massive debt. Major medical bills, a divorce, problems with flooding and mold at houses he owned and bad investments also crushed his money situation.

He said he would drink at big gatherings, Super Bowl parties and other galas, just like everyone else. But as the drinking increased, he got into debt and that debt led to legal problems and default judgments. He later lost his job after a lawsuit was filed against him for a debt and now he can't work in football, his most successful sport.

Alcoholism and dependence on drugs can lead to major money issues when the need for that outweighs others. That can get expensive, which can create more and more financial issues.

Bankruptcy in Los Angeles may be a way out of these issues. If a consumer owes people, companies or banks major dollars, but their income is lagging, bankruptcy may help. Instead of losing court battles and getting further into trouble, filing for bankruptcy can help people get out of the debt and figure out a way to battle back in the future.

Why wait and hope that the situation improves without any major planning? Take the proactive approach and set up a free consultation with an experienced Los Angeles bankruptcy lawyer today.

Continue reading ""Jerry Maguire" Agent Files For Celebrity Bankruptcy in Los Angeles" »

Americans borrowed more money in November than they had in nearly 10 years, showing that a Los Angeles bankruptcy filing could be popular in 2012.

Our Los Angeles bankruptcy lawyers recognize that times are tough and improvements have been minimal. And as unemployment continues to stay high throughout Los Angeles and California, people continue to rely heavily on credit cards.

And these companies have noticed. They have increased the number of advertisements they put on the air in an effort to get consumers to sign up for as many credit cards as possible. The more plastic in a person's wallet or purse, the better shot these companies have at keeping consumers trapped in debt.

Yet, bankruptcy in Los Angeles is a way out for consumers having trouble in this area of their life. These laws help consumers who are trapped in debt because of credit cards.

And it doesn't just apply to the major credit card companies, but also retail credit cards, gas station cards and other types of debt that consumers regularly pile up when they are in need of money. But it is running thin.

Using credit cards isn't a problem. In fact, most Americans use credit cards as a means to build credit, improve their credit score or make purchases when they don't have the money at that point to make buy something. But problems often creep up when payments are missed or if they are made late. This usually kicks in hidden fees and higher interest rates that can continually hurt consumers.

In November, consumers set a mark when they borrowed $20 billion in a single month, the highest since November 2001, a few months after the Sept. 11 terror attacks in New York, Washington D.C. and Pennsylvania. In that month, consumers took out $28 billion in loans.

Not counting mortgage debt, Americans owe $2.48 trillion in debt, USA Today reports. Credit card debt, calling "revolving debt" by analysts, increased 8.5 percent annually. Some news sources reported that nearly three dozen surveyed economists had pegged the growth for November at half or less than the total number.

Some believe this is a sign that the economy is improving, as consumers have more confidence in the financial system and are more willing to spend. Others believe that this is simply a sign that Americans must do more borrowing because while there were 200,000 jobs added late in 2011, they still are recovering from years of struggling.

Los Angeles bankruptcy can cure the years of bad credit scores, borrowing and debt. The bankruptcy process clears off credit card debt and allows consumers to move forward without dealing with the credit cards that have ruined their credit scores and made their lives so frustrating. The process is designed to help, not hurt consumers, and give them a way out of the credit card traps.

Continue reading "American Debt Soars to Highest in 10 Years, Showing Need for Los Angeles Bankruptcy" »

Health care costs in this country have risen exponentially in recent decades, to the point that many have called our nation's health care system broken.

Take, for instance, a recent accident in downtown Los Angeles, where five vehicles collided, including a Los Angeles Police Department cruiser. While three people were taken to the hospital, the accident was largely considered minor. But those three people could still end up with tens of thousands of dollars of medical bill debt simply because of an accident.

Medical bill debt is one of the leading reasons someone files for bankruptcy in Los Angeles and it has increased in recent years because of the hike in medical costs. Even a minor traffic accident -- something everyone is vulnerable to being the victim of -- can lead to major financial problems.

Our Los Angeles bankruptcy lawyers recognize that medical bills may be inevitable. Getting into an accident, being diagnosed with cancer or another debilitating illness or suffering a serious medical problem can be life-altering. Whether a person has health insurance coverage or not, they can be slammed with major medical bills. Insurance rates can increase even if there is coverage.

According to the Los Angeles Times, the five-car accident happened recently nearly Hill Street and Olympic Boulevard. It left five people injured. A Los Angeles Police Department officer was involved in the accident.

The newspaper didn't have details about how the crash transpired, but it did report that three people were taken to the hospital with non-life-threatening injuries. Two others, one of whom was an officer, were treated at the scene and released.

"Non-life-threatening" is a pretty vague term that can range from something as simple as cuts that required stitches to broken bones or a brain injury that cannot be fixed. Being injured even in an accident can cause a person to have major medical bills because insurance companies and attorneys could take years battling over who was at fault for the crash and whose insurance company should pay.

Everyone is motivated by money, and often the victim is left victimized again as they wait for a determination to be made about who will pick up the cost of medical bills. In the mean time, an accident can cause job loss and the bills continue to pile up. Filing for bankruptcy may be a solution.

Consumers throughout Los Angeles have learned that filing for bankruptcy allows them to discharge debt and get their lives back on track financially. With the debt gone, they can better focus on preparing to save money and avoiding financial stress down the road.

In most cases, any medical debt, credit card debt and other loans can be discharged through bankruptcy proceedings. The law, in some regards, is flexible and can be applied in a manner that best helps the consumer. Our Los Angeles bankruptcy lawyers have helped countless clients better their life through bankruptcy. If you are facing major medical bills that you simply can't pay, call today.

Continue reading "Los Angeles Bankruptcy Can Help Those Stuck With Major Medical Bills" »

While some good news came out of Washington D.C. recently when officials announced that the nation's unemployment rate was at its lowest in years, Los Angeles still remains one of the cities with the highest unemployment rates, the Los Angeles Times reports.

This has led many residents to consider filing for bankruptcy in Los Angeles as a way to compensate for struggling finances based on a job loss.

Our Los Angeles bankruptcy lawyers have been able to help many people in the last few years who have struggled with their finances after losing a job. And considering how long people typically wait to try to find a job while out of work, their finances can continually get worse.

The U.S. Department of Labor's Bureau of Labor Statistics reports that Los Angeles has one of the highest unemployment rates among major metropolitan areas. Of the 372 metropolitan statistical areas, the Los Angeles-Long Beach-Santa Ana area ranks 334 with a 10.7 unemployment rate.

On a national level, the jobless rate was measured at 8.5 percent in December, improved from 8.7 percent in November and better yet from August, when the rate was 9.1 percent. Experts believe some of the good news came as a result of holiday employment, which is typically seen as temporary.

The Times reports that employers added 200,000 net jobs in the last month of 2011, twice the number of November. Private sector jobs soared, while public jobs declined. The average hourly earnings also increased, the newspaper reports.

Analysts believe that the numbers are good news, but they're not positive it will be a lasting trend. The numbers did come in better than expected, compared to projections for the end of the year.

To put the numbers into perspective, the nation still has 6 million fewer jobs than it did in December 2007, when the recession began. At that point, the unemployment rate nationwide was 5 percent. In the last three years, the economy has slightly perked up, but has largely lapsed back into minimal growth.

While the unemployment rates in California are higher than national rates, people are struggling at a higher rate here than elsewhere in the country. And many people can use bankruptcy laws to their advantage to help with their debt situation.

The longer a family is without a steady income, the more debt they will likely rack up. Even with a minimum contribution from the government for unemployment benefits, this alone in many cases can't match what a family was previously bringing in with a job.

Another factor to consider is that without health insurance, medical bills can creep up, adding to a family's debt and missed payments can lead to a worsened credit score. This is more debt that will keep the family in a constant spiral.

The good news in all this is that filing for bankruptcy can help families in need. Bankruptcy laws help consumers. They allow for people to discharge their debt and come out with a more positive outlook after the process has finished. For those who have lost their jobs, bankruptcy could be an option that helps the family get back on track with a positive outlook toward the future.

Continue reading "Los Angeles Among Highest Metro Unemployment Rates, Leading Many to Bankruptcy" »

With 2011 behind us, many people are still looking at their house as a major obstacle and a problem they don't know how to deal with.

Foreclosures are still a major problem throughout Southern California. It's a problem that is based partly on the high unemployment rate throughout Los Angeles, but also the actions of banks that have proven unlikely to work with homeowners trying to figure out a way to negotiate.

When a bank isn't willing to consider some type of mortgage modification, perhaps filing for bankruptcy in Los Angeles would get their attention. Many consumers don't realize that bankruptcy can be an effective tool in battling foreclosure.

Our Los Angeles bankruptcy lawyers recognize that considering bankruptcy is a big deal. But we would like to emphasize how beneficial these laws can be for consumers. They were designed with consumers in mind. Bankruptcy laws can help consumers discharge all the debt they have and allow them a fresh start.

For those dealing with foreclosure, bankruptcy can be a valuable tool because filing immediately stops foreclosure in its tracks. Recent articles have suggested that the time it takes for a foreclosure case to be processed can be as long as one to two years. This provides a lot of time for people to try to come to an agreement with their bank, but it also means that more notices of missed payments will be put on their credit scores.

Whether the homeowner has missed one payment or many more monthly payments, filing for bankruptcy stops the process. Banks are notified of the filing and they can no longer work toward foreclosure. The case must be moved to bankruptcy court, where lawyers, a judge and a trustee work together to solve the debt issues of the consumer.

In most cases, the homeowner can stay in the home even while the bankruptcy is ongoing. And if all goes well, it may be possible for the family to discharge other types of debts, such as credit card debt and other loans, which can free up money for them to start making payments on the house.

Stipulations can be reached with lenders in order to stop the foreclosure process and give the family time to again make payments and work to stay in their home. This could be especially helpful in Los Angeles, where in some places as few as 1 in every 100 homes is in foreclosure right now, according to foreclosure tracking website RealtyTrac.

Sadly, the problem isn't going away for many years to come. As the Los Angeles Times recently reported, major banks issued 21.1 percent more foreclosures from the second quarter of 2011, showing that they are getting more aggressive.

This isn't a time to be wondering what's going to happen with your house. Banks are attempting to get as much money as possible out of these investments and that could mean banks coming after consumers for deficiency judgments, the difference between the loan and the home's sale price at auction. This can lead to more headaches in the future for people simply trying to get by.

Continue reading "Foreclosure Numbers in Los Angeles Remain High, Though Bankruptcy Can Help" »

If it's important for you to make sure this year better than 2011 in terms of preserving your finances and managing debt, now's a great time to get on track.

If you're deep in debt, out of work and see no light at the end of the tunnel, you might consider bankruptcy in Los Angeles. Let's face it: California isn't exactly swimming in jobs. The Los Angeles-area unemployment rate was recently listed at 11.5 percent, highest among major metropolitan areas, according toThe Lane Report.

The bottom line is that the economy isn't improving fast enough. One strategy for consumers is to hold out hope that things will get better quickly -- you may be fortunate to find a job and begin paying back your debt. It could happen.

But short of that happening anytime soon, one other approach would be to set up a consultation with an experienced Los Angeles bankruptcy attorney who can provide legal advice relating to your finances. There are ways for consumers to get help on how to get finances in order in this tough economic climate.

One of the biggest problems in the Los Angeles area has been a lack of well-paying and full-time jobs. The Los Angeles Times recently reported that the unemployment rate dropped to 11.3 percent in November, the fourth straight month the state's number has dipped. But the nation's rate is 8.6 percent, well below California's number.

Job loss has been a problem for many Americans. A huge chunk of job-seekers have been out of work for months at a time. In that period, many people have had major debt problems that they have never had to deal with before. Some families who haven't had to consider debt management issues before are now staring them straight in the eye.

But there are some ways to help. One New Year's resolution to attempt to keep is working on your financial future and attempting to make some positive changes that could provide for a better lifestyle.

Cut back on unhealthy habits that increase insurance premiums
Studies show that smokers pay about 14 percent more than other health insurance policyholders, while people who are obese pay a whopping 22.6 percent more than others. Cutting back on unhealthy food choices and habits, and quitting smoking can put some extra cash in your pocket.

Shop smarter
Some people are hooked on name brands, but consider trying generics to help save a few bucks and see how it works out. In most cases, they are cheaper and provide equal quality and nutrition.

Use technology to your advantage
Simplify your budget by setting up online accounts and automatic bill pay instead of having to write checks and buy stamps.

Get smarter about money
Don't keep your head in the sand about money issues. Rather, study up so you know how you can invest and make a buck or two.

Plan for the unexpected
Major, unexpected events can thrust people into debt. Put together a savings account and maintain it for bad times.

Pay down your debt
Avoid late fees and high interest rates by paying down the debt with the highest interest rate. This can save you money in the long run.

Create a basic budget
It doesn't have to be complex, but spending without knowing your income is a recipe for disaster. Monitor your progress.

Continue reading "New Year Means New Outlook on Debt Management and Possible Los Angeles Bankruptcy Filing" »