Category Archive: Filing Bankruptcy


Filing Bankruptcy


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Bankruptcy Basics – “Will I Lose My House in a Chapter 7 Bankruptcy?”

Almost daily I meet with families that have avoided filing for bankruptcy because they fear they will lose their home as part of the process. In this article I will discuss how you can know if your house will be put at risk by filing bankruptcy and discuss the different ways secured and unsecured debts are treating in the bankruptcy process.

Will I Lose My House?

Secured debts are treated different in bankruptcy than an unsecured debt. A secured debt is a debt that is secured by property or collateral of some sort. The most common secured debts are car loans and home loans. With these types of loans if you dont make the payment the care will be repossessed or the home foreclosed on.

For the most part it is no different if you file a chapter 7 bankruptcy. You must keep making the monthly payment on your home if you want to keep it while you are going through the bankruptcy process. If you dont make the house payment then, just like it would be if you werent in bankruptcy, the bank can ask the bankruptcy court to permit it to start the foreclosure process.

What if I have Equity in My House?

Over the last 4-6 years it almost seemed laughable that someone would have equity in their home here in Arizona. Due to the Great Recession nearly all Arizona homes were upside down where there was more owed on the home than it was worth.

As the housing market has improved I am starting to see families that do have equity in their homes, and sometimes quite a bit of equity. In Arizona you are permitted to have up to $150,000 in equity in your home that creditors cannot touch. This is true if you are going through bankruptcy as well.

So long as you continue to make the monthly house payment and dont have more than $150,000 in equity you are fine and you will not lose your home simply because you filed for bankruptcy.

What If I am Behind on My House Payment?

If you are behind on your house payments or if your house is in foreclosure then chapter 7 may not be the best chapter of bankruptcy to file and keep your house. You would likely want to file a chapter 13 case which is better suited to helping consumers get caught up on their missing house payments and begin making the regular payment going forward.

So, if you are dealing with large amounts of credit card debt or medical bills and you need some relief bankruptcy can be a good option to eliminate the unsecured-type debts, keep your home, and get your fresh start.

Thinking of Bankruptcy? Want More Information? Check out My Bankruptcy Video Course!

This on demand video course will give you all the nuts and bolts of a chapter 7 and chapter 13 bankruptcy and help you in your decision process. Click HERE for more information.


Filing Bankruptcy


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How to Rebuild Your Credit After Bankruptcy

Filing for bankruptcy can stir up a mixture of emotions. It may feel like a personal failure, a big relief, or it could cause feelings of anxiety about your financial future. One area you may be anxious about is your credit. Your credit score will take a pretty big hit after a bankruptcy filing, so it will take some time to rebuild. The key is to stay committed to taking the steps necessary to move toward an ideal credit score. Although bankruptcy negatively impacts your credit, in some cases it can help you get back on the road to financial health sooner.

“Ironically, a bankruptcy may help you start building good credit sooner than if you don’t file for bankruptcy and continue to struggle with more debt than you can pay, especially if you wind up filing bankruptcy later anyway. Eliminating or reducing debts through bankruptcy will help you (when the bankruptcy is over) to meet the two most important goals for a good credit score: making your payments on time (35% of your score) and not using most of your available credit (30% of your FICO score), said Robin Leonard and Margaret Reiter in the book Credit Repair.

Here are four tips for attaining healthy credit after a bankruptcy.

1. Build savings

Not having enough savings is likely a big part of what got you to the point where you needed to file for bankruptcy. It will be important to begin putting away at least six months of savings so you can have enough cash on hand for emergencies. This way you won’t have to rely on credit to get through a tough financial situation. You can start by having a set amount of money automatically withdrawn from your checking account and placed into savings each pay period.

2. Add positive information to your credit report

Have you taken a good look at your credit report lately? There may be positive information missing that could help boost your score. This is one of the simplest ways to improve your credit. You can write a letter to the credit reporting agencies, requesting that positive information, such as an account in good standing, is added. Sometimes a creditor will submit your account details to one major credit reporting agency, but forget to send this information to the other two. If this is the case, you will have to send a copy of the credit report that has the complete information to the other two major agencies. Include a letter asking for the information to be included. You can also contact your creditor directly and ask for unreported accounts to be reported to the agencies.

3. Consider a secured credit card


Filing Bankruptcy


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David Cassidy Reacts Strongly To Anchorman’s Question About His Bankruptcy …

David Cassidy is being described as an angry person who lashed out on the anchors of ITVs This Morning. The circumstances surrounding the retaliation, however, show a different side of the story.

In the recent airing of an interview with This Morning, former musician David Cassidy rebuked co-anchor Eamonn Holmes for rubbishing him. Cassidy appeared on the morning talk show via satellite from Florida. He appeared to be quite cordial, but seemingly lost his cool, when Holmes persistently asked him about his current financial status. The actor appeared quite agitated when he was directly questioned about filing bankruptcy.

Though Cassidy held his ex-wife responsible for his financial setback, he mentioned it had nothing to with him declaring bankruptcy. Incidentally, David Cassidys $1.8 million Florida mansion was recently put up for auction and the sale could hint at an attempt to recover from insurmountable debts. But, Cassidy was insistent that selling his mansion and filing bankruptcy had no correlation.

It had nothing to do with declaring bankruptcy, that was a totally separate issue. Im doing it because Im in the middle of a divorce.

A persistent Holmes lingered on the issue and asked if selling of the mansion would help clear some of Cassidys debts, reported MSN. Cassidy offered his response.

When you declare bankruptcy in this country, its something you do in order to reorganize what you have, your assets, so Im not going to discuss that. I have and I still have fantastic assets. Are you trying to rubbish me?

When the anchorman tried to speak, Cassidy snapped back.

Waithellip;.. Dont interrupt me. When you are trying to separate the assets over 25 years [of marriage], you must do what is necessary and thats whats necessary. Donald Trump has declared bankruptcy a number of times and it doesnt mean hes poor, hes simply reorganizing things. I got my advice from my attorneys who said, This is the opportunity you have because youre going through a divorce.

After the interview concluded, Holmes took to Twitter and declared his interview with David Cassidy his worst.

The 65-year-old singer has been through a lot during and after his divorce. At one point, David Cassidy was arrested for driving under the influence of alcohol. For a cordial conversation, Holmes choice to ask about Cassidys divorce, bankruptcy, and mansion auction might not have been the ideal line of questioning.

[Photo courtesy of ITV, This Morning screen capture]


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Can I give money to my son before filing bankruptcy?

I want to give my son $20,000 for a wedding present, probably by borrowing from my 401K account. But I also need to file bankruptcy. Would that be a problem?


Filing Bankruptcy


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Bankruptcy: Is it the right decision for you?

Deciding if bankruptcy is right for you can be one of the most important decisions you’ll ever make in your life. As much as possible, most people try to avoid it, of course. But sometimes, the hole you’ve dug up is too deep that there is no other way out. For example, perhaps you owe so much that there’s simply no way for you to ever repay your creditors. Filing bankruptcy, although not your first choice, may be a better alternative to remaining stuck in debt for the rest of your life.

The answer, of course, doesn’t always come quick and easy. Most people will postpone making a decision until they have their back into a corner and they feel like the walls are caving in. If you are in this situation, I know how you feel. At what point does it make sense to file bankruptcy and get legal protection? If your financial situation is causing you a lot of stress and worries, perhaps bankruptcy is the best solution for your mental well-being if you’re already doing your best but it’s still not good enough.

Filing bankruptcy provides immediate debt relief because it automatically stops collection actions against you and your property. That means no more collection calls, lawsuits, wage garnishments and no more sheriffs at your door.  For the first time after a long while, you can finally breathe better and feel like a human being again. In Chapter 7, credit card debts, personal loans, medical bills and other unsecured debts are erased completely. Although in Chapter 7 non-exempt property can be taken to pay creditors, this is very rare because most Chapter 7 cases are no-asset cases. If your case is such, you lose nothing but your debts and you get to keep your home, automobile, bank accounts, retirement plans, etc.

In Chapter 13, you agree to repay all or a portion of your debts over 3 to 5 years. In most cases, you can cut your current credit card payments in half or even more, depending on your income and expenses. So, rather than struggling to pay your debts and the ridiculous interest rates that the credit card companies are charging you, you can be out of debt in a much shorter period of time while paying zero percent interest on your credit cards.  Trust me. With the interest rates of 22-29% that the credit card companies are charging you, you are likely to be in debt for the rest of your life if all you can afford is to make minimum payments.

If filing bankruptcy makes sense for your situation, it may be the only way you will ever get a fresh financial start. If there are ways to avoid it, I can help you review your options. For a free consultation, call my office at Toll-Free 1-866-477-7772. We have offices in Los Angeles, Pasadena, Cerritos and Valencia.

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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772. 


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It all just hit me when a bill collector called me

B. is a single woman and felt that the world was crashing in on her because of her financial situation. She sent a touching story to about someone who took action completely in secret. This is what she said:

I’m single. I’ve been in and out of the hospital for the last few years, and the medical bills continued to pile up. There never seemed to be any relief. I know a lot of single women who will relate.

I’m not in the high-income bracket, and I am barely making it as it is. My checking account is proof I’m always in the hole. It seems almost every check I write is related to a bill. Essentially life is a struggle, but I know there are people out there who have it worse.

A few months ago, it all just hit me when a bill collector called me. I felt like I was drowning. When your debt far exceeds your income, and youre working two jobs and one of those jobs is very physically demanding, you start to lose hope. You eventually get worn down.

The gentleman on the other end of the line was my lifesaver. I had just lost my driver’s license and was going to replace it when he called. In other words, it was a bad day. He talked with me and really seemed to care. In fact, he seemed like the only person in my life who cared.

We talked about my debt, he offered advice, and I felt better for talking to him. When we discussed how much my debt was, he went silent. I could tell he felt my pain. There really was no point in filing bankruptcy. I was stuck. He offered me some more advice and suggested that I pay at least $5 on each bill. I agreed and promised to do so. That ended our conversation.

A few months went by and I hadnt heard from that company. That is, until yesterday, I received a letter in the mail. Someone sent in a check and paid off the entire total of my debt with that company of $1,500.

I sat in my car and I just sobbed. To this anonymous person who helped me out, that was the nicest thing anyone has ever done for me. Even as I write this, I have tears of gratitude in my eyes. I dont know who you are. Maybe you are the man with that company I talked to or maybe not.

Whoever you are, I dont think there is an adequate way for me to express how thankful I am for you. Fifteen hundred dollars is a great deal of money, and I dont know what I did to deserve that kindness from you but thank you. Thank you so much. I pray that God will bless your life, the way you have blessed mine.



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Bankruptcy Filings Decrease by 12 Percent in 2014

The American Bankruptcy Institute reports that continued low interest rates and high filing costs deter consumers and businesses away from filing bankruptcy.


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Even the “cleverly insidious” lender cannot prevent its borrower from filing …

Put your lenders hat on. Wouldnt it be great if you could prevent your borrower from filing bankruptcy in the first place? Unfortunately for lenders, a recent decision demonstrates how hard it is topreventbankruptcy filings.

InIn re Bay Club Partners-472, LLC, 2014 Bankr. LEXIS 2051 (Bankr. D. Or. May 6, 2014),the debtor was a manager-managed Oregon limited liability company which owned an apartment complex. In order to acquire the property, the debtor had borrowed approximately $23 million from the lenders predecessor in interest. The debtors operating agreement contained a provision prohibiting the company from filing bankruptcy until it had paid back the loan. This provision was included in the operating agreement at the request of the lender. There was no such bankruptcy prohibition contained in any of the loan documents.

After the bankruptcy filing, the lender filed a motion to dismiss the bankruptcy petition on the grounds that the operating agreement prohibited the filing. After finding that the lender had standing to file the motion, the court nonetheless ruled that the provision in the operating agreement prohibiting the filing was against public policy and unenforceable. While this ruling should not have been much of a surprise given prior appellate court rulings in the Ninth Circuit, what was particularly troubling from the lenders perspective was the courts criticism of its tactics. The court found that the lender had been cleverly insidious by choosing not to include the bankruptcy prohibition in the loan agreement, but requesting that it instead be included in the operating agreement. This, the court found, was no less the maneuver of an astute creditor to preclude [the company] from availing itself of the protection of the Bankruptcy Code.

Interestingly, the court found that representatives of all members of the debtor had signed the operating agreement containing the bankruptcy prohibition, but that there was no evidence that the members had discussed the prohibition.

Where does this leave lenders? Clearly, lenders face an extremely uphill battle arguing in favor of the enforcement of bankruptcy prohibitions. However, the battle is not insurmountable. The likelihood that a bankruptcy waiver will be enforced increases to the extent that:

  • the bankruptcy waiver is made at a time when the company is not under duress;
  • there is no evidence of coercion by the lender;
  • the company availed itself of counsel in the negotiations over the waiver; and
  • the bankruptcy waiver is conspicuously set forth in the loan documents.

Nonetheless, no lender should count on a bankruptcy waiver being enforced. Instead, the prudent lender should insist on the normal protections afforded a secured creditor, namely sufficient collateral.


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Swets bankruptcy will cost libraries time, money

Librarians at dozens of colleges have been scrambling to reorganize their subscriptions to academic journals after a company that manages subscriptions abruptly filed for bankruptcy this fall.

The Netherlands-basedcompany Swets Information Services BV declared bankruptcy in September in Amsterdam. The companys North American branch filed for Chapter 7 bankruptcy in New Jersey at the end of November.

That means recentorders and payments made to Swets from libraries may not reach publishers, who will likely lose money, andlibraries that had money tied up in Swets accountslikely will see only part of it returned, possibly without the subscriptions they paid for.

Swets#39; bankruptcy filing lists more than 100 colleges among its creditors. That number doesnt include large state systems with multiple contracts among their campuses, such as theState University of New York and California State University. Several Canadian colleges are also listed among the creditors.

About 20 of the largest research libraries in the US were significantly affected by the companys failure, said Ann Campion Riley, president-elect of the Association of Research and College Libraries.

Riley is the Associate Director for Access, Collections and Technical Services at the University of Missouri at Columbia libraries, which has a claim amount of $1,051,224, according to the filing.

Local news reports about the University of Colorado at Boulder and Utah State University said legal teams at both universities are working to recoveras much of the $3 million and $2 million, respectively, that they paid to Swets.

Virginia Commonwealth University said in a statement that itslawyers are working with outside counsel to decide how to proceed. The university has $1,467,240 at stake.

Other universities with more than a million dollars in claims, according to the filing, include Michigan State University, the University of Southern California, the University of Missouri at St. Louis, Massachusetts Institute of Technology and Washington University in St. Louis.Many other colleges have claims ranging from a few hundred dollars to a few thousand.

Some publishers have announced theyll honor subscriptions even if they havent received a payment from Swets, Riley said. Otherwise, libraries will have to call publishers and ask for payment plans or a grace period of a few months.

Thats no small task, either. Large university libraries could have between 20,000 and 40,000 journal subscriptions. One large publisher may oversee a couple thousand journals, but for a library operation the size of the University of Missouri at Columbias, the staff is looking at calls to probably 800 different publishers, Riley said.

The timing of the bankruptcy in the journal subscription renewal cycle fell just as libraries were paying their fall invoices for a Jan.1 subscription start date, Riley said.

Her library still has a few weeks of work ahead to contact all the publishers with whom it has subscriptions. Shes optimistic that there wont be any gap in access to journals, but other colleges and universities –particularly those that cant get additional money to pay publishers –will likely see at least a short pause.

Swets was a big player in the world of subscription agents. The company was well-established and had a reputation as a solid serials vendor, Riley said.

The company claimed just over $4 million inassets and nearly $98 million in liabilities in its bankruptcy filing.

Swets 2013 annual report said the company failed to meet its requirements for long-term financing and closed fiscal year 2013 with a net loss of 51.1 million euros ($61.9 million), according to Library Journal. (The Swets website, where the annual report was posted, doesnt appear to work any longer.)

Part of the explanation for Swets#39; failure is likely an overall shift in the market as the cost structure of publishing has changed, Riley said. After the influx of digital journals, there are fewer dollars flowing through vendors, because publishers can manage those themselves.

The bankruptcy should force libraries to be more cautious depositing money with vendors, said Kevin Smith,director of the Office ofCopyright and Scholarly Communications at Duke University libraries and a blogger about library issues.

Some libraries will lose money they paid to Swets that was owed in invoices. Others, though, likely were in the habit of sending in large deposits to the company in anticipation of placing orders in the future, Smith said.

Smith understands why libraries feel the need to do that, since they could lose unspent money if they close out the fiscal year with a surplus. But its risky, and as unsecured creditors,libraries are at the back of the line for repayment, he said.

Smith thinks the ultimate solution is requiring a system in which money deposited with a vendor is secured in a type of escrow account. He wrote about the suggestion in a blog post for Library Journal.

This isnt the first time libraries could be on the hook forhundreds of thousands of dollars because of a third-party bankruptcy.

In 2003, RoseCom and its Faxon Library Services filed bankruptcy. Initial loss estimates for US libraries ranged from $30 million to $80 million, although publishers, who granted access without being paid, ended up taking the biggest hit.

A few years later, after all the court proceedings were settled, the library Smith worked for at the time received about 30 cents on the dollar of what it had paid to the company.

Even for those colleges that didnt have money tied up in the company when it declared bankruptcy, the fall ofSwetsis still a game-changer, Smith said. Any college that usedSwetsto manage its journal subscriptions will have toplace orders directly with publishers orswitch to a newagent.Thatmeans that the largest companies, such asEBSCO Information Services, will get larger,putting more influence overscholarly publishingin the hands offewer companies, he said.


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6 Ways to Use Mindfulness For Real Leadership

Youre dangerous, you know.

Leadership, of any kind, isnt cultivated from a bullet point presentation, or a sound bite. It encompasses the very essence of who you are, and what youre here to accomplish.

Youre holding the power — or its holding you.

You, with all your humanness and its notorious ego, which insists on reducing the infinite complexities of the universe into little black-and-white boxes, are running this show.

I got so caught up in the dangerous stories I was telling myself about what I deserved in my career, and when I deserved it, that I forgot to pay attention to where I actually was.

Ive sold out my professional dreams and aspirations more than once because I hadnt yet learned how to stop scurrying around, and settle into leading from my heart.

Being of a somewhat stubborn nature, I figured if I kept on powering through all the challenges, Id be wearing my super-hero cape by the end of the week.

Can I just tell you, I spent months weeping into my pillow when I woke up in the mornings, years pretending away the truth, eventually filing bankruptcy, before I woke up.

Bruised and battered, Id forgotten a lot of things, including how to ask the good questions, and listen for the right answers.

Ask Good Questions

As the master poet and international corporate leadership teacher David Whyte says:

The marvelous thing about a good question is that it shapes our identity as much by the asking as it does by the answering. Nine years ago, I wrote a poem called Sometimes in which I talked about the questions that can make or unmake a life.. questions that have no right to go away.
[…] They almost always have something to do with how we might be more generous, more courageous, more present, more dedicated and they also have something to do with timing: when we might step through the doorway into something bigger, better — both beyond ourselves and yet more of ourselves at the same time.


  • Are you willing to accept what youre afraid to receive?
  • Where does your sweet spot meet that of the needs of the larger world?
  • What are the questions that wont leave you alone?

Because, if you dont know who you are, where youre going, who you want to go with you, and why you think youre going there — well, youll end up getting blown sideways through your life.

Thats not leadership.

In my case, Id gotten so ensnared in the trap of overwhelm, crippling self-doubt
and almost breaking myself apart in attempts to force the timing, that I lost it all.

I was not generous or present or courageous. Instead, I was desperately busy trying to build a protective wall around myself so I could feel safe. And to make it all happen, right now. Now, dang it!

That is decidedly not leadership.

Cultivate the Wildness of the Edges

In permaculture, the edges between one space and another are often the wildest, containing a richness of biodiversity not found in more contained areas.

The same principal applies to leadership. The truth is that everything cool and rich and wild happens at the edges: fresh creative ideas, and innovative ways of implementing those ideas.

Passion + ambition + fear + creative thinking + self-doubt + confusion = the rich, messy edge waiting for me to cultivate.

Thanks to bankruptcy, I started messing around with the edges. The edges of questions that wouldnt leave me alone, and the deep-seated fears that kept me from answering those questions and achieving my goals.



It has, quite simply, saved my ass. The first time was a few years ago, after a spectacular selling out of my career goals. Learning to meditate allowed me to remember who I was, what I more deeply wanted, and how to start creating a structure to realize them.

Mindful meditation created enough space within my panicked thinking to feel once again feel the presence of hope and possibility.

All along the way, I was forging real leadership skills.

6 Ways to Use Mindfulness for Real Leadership

  • Start telling the truth, first to yourself, then to your clients and customers.
  • Hold the pain of telling the truth; this allows you to deepen and grow into yourself without giving up.
  • Ask for help.
  • Balance the brains built-in negativity bias by noticing all the good stuff
    everywhere around you.
  • Cultivate more flow experiences, which creates more happiness, which results
    in stronger, better leadership.
  • Aim for your sweet spot, using all these strategies to set and achieve results.

Mindfulness was my e-ticket for learning how to show up in the world, consciously crafting the qualities of a real leader. If I can do it, so can you. I promise.