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In this article, you will discover: The 2024 changes to the California Homestead Exemption Law. When it’s necessary to file a homestead declaration. How to maximize the homestead exemption when filing for Chapter 13. What Changes Were Made To The California Homestead Exemption Law In 2024? In January 2024, California increased to the maximum equity exemption for your principal residence from $600,000 to $699,421, if you live in either Los Angeles County or Orange County. This is because the median sale price of a home in each of those counties is more than $699,421. If you live in a county… Read More →

Bankruptcy is a delicate topic to discuss. Even in Los Angeles country, it may carry a stigma that helps perpetuate myths and misconceptions about the process. This article aims to tackle five of the most common myths about Chapter 7 bankruptcy, including:  Why your spouse will not necessarily have to file for Chapter 7 bankruptcy if you do.  Why unpaid medical bills must be included in your bankruptcy.  The real impact of bankruptcy on your credit score and ability to get a loan. Myth #1: If I File For Chapter 7 Bankruptcy, My Spouse Has To File Too. Answer: No,… Read More →

Chapter 7 bankruptcy offers vital relief for individuals facing overwhelming debt, but navigating the process requires transparency. In this article, we explore how fraud can occur in bankruptcy filings, the legal consequences of dishonesty, and practical steps to avoid accidental fraud. Keep reading to learn more about how to protect your bankruptcy filing and avoid common pitfalls throughout the entire process. In this article, you can discover… How to better understand bankruptcy fraud and its components. Steps you can take to avoid accidentally committing fraud. The consequences of leaving assets out of your Chapter 7 bankruptcy petition. How Is Chapter… Read More →

Some creditors are not entitled to postpetition interest on their claims.  For example, general unsecured creditors typically don’t get postpetition interest pursuant to 11 U.S.C. § 502(b)(2). Other creditors are entitled to postpetition interest. I.   Interest On Unsecured Priority Taxes    A.  Chapter 11 For example, in Chapter 11 taxing authorities are entitled to postpetition interest on their unsecured priority claims.  See, e.g., § 1129(a)(9)(c), IRM 20.2.11.6.1.3(6)., and IRS pub. 908 at pages 26-27.    B.  Chapter 13 However, the IRS is not entitled to postpetition interest on unsecured priority claims in Chapter 13, unless the debtor has sufficient disposable… Read More →

What is cash collateral?  Perhaps the best starting point to understanding the concept is with a relatively common example.  Suppose the debtor has a rental property encumbered by a mortgage.  The note undoubtedly has an assignment of rents provision.  This means that the creditor has a lien against the debtor’s stream of rent payments.  That stream of payments belongs to the creditor and is called cash collateral because it serves as partial collateral for the debt — the real property is the other portion of the collateral.  As long as the debtor makes the monthly payments, the creditor will take… Read More →

This post assumes familiarity with my last three posts (Part 1, Part 2, and Part 3) this multi-part series.  Thus, while you can certainly read this post without reading those previous ones, you’ll get more out of it if you read those posts first. Lien Valuation We have already discussed motions to value liens.  What good are they? First, if the goal is to strip off a wholly unsecured junior lien, it is important to establish that the junior lien really is wholly unsecured.  Therefore, getting a determination of the value of the senior lien(s) and an appraisal of the… Read More →

This post assumes familiarity with my last two posts (Part 1 and Part 2) of this multi-part series.  Thus, while you can certainly read this post without reading those previous ones, you’ll get more out of it if you read those posts first. V.  Some Other Issues Associated With Liens A.  Is The Lien Perfected? Suppose the debtor and all the debt’s assets are in Los Angeles County at the time the creditor records a lien in Orange County against the debtor’s principal residence in Los Angeles.  Is the creditor’s claim secured?  No.  The lien must be recorded in the… Read More →

This post assumes familiarity with my last post (part 1) of this multi-part series.  Thus, while you can certainly read this post without reading that previous one, you’ll get more out of it if you read that post first. III.  Avoidance Of A Partially Or Wholly Unsecured Lien In Chapters 11 And 13 11 U.S.C. § 506 is used to determine the extent to which a claim is secured.  Rather than delving into the wording of the statute, let’s informally say that if the value of the collateral is less than the sum of the liens against it, then at… Read More →

This is the first of a four part series on lien avoidance.  I developed these notes for a presentation I gave to the Central District Consumer Bankruptcy Attorney’s Association, Los Angeles, California. A lien is a claim or legal right against assets that are typically used as collateral to satisfy a debt.  A lien serves to guarantee an underlying obligation.  If the underlying obligation is not satisfied, the creditor may can seize the asset that is the subject of the lien.  In essence, a lien creates an in rem claim against the assets of a debtor against whom the creditor… Read More →

IV. The Constitutional Problem With A § 706(b) Motion I thank Daniel Press, an attorney practicing in Virginia, Washington, DC, and Maryland, for giving me his notes, which served as an afflatus for some of today’s post. A. Historical Background  1. The Chapter 13 Context When Chapter 13 was enacted in 1978, it provided that only an individual could be a Chapter 13 debtor (11 U.S.C. § 109(e)), imposed limitations on the amount of debt a Chapter 13 debtor could have (11 U.S.C. § 109(e)), and — most important for today’s discussion — included postpetition earnings in the bankruptcy estate… Read More →