Sonoma County Bankruptcy Lawyer Blog

CNBC's recent report on student debt suggests that student debt is the next housing bubble. Most student loans are not dischargable in bankruptcy. But student loans are guaranteed by the government.

That has created massive incentives for for-profit schools like the University of Phoenix to push students into debt that they don't need and can't afford because the schools are going to get paid anyway. The CNBC report detailed in teary interviews the impact on people's lives when they're straddled with punishing debt.

Two-thirds of American college students will graduate with a sizeable debt; for the class of 2009, the average debt was $24,000. Add loans for graduate school and parent loans on behalf of their kids and the Kuipers' family estimate of $80,000 per student is typical, according to Lauren Asher, who directs the non-profit Project on Student Debt.

"The need to borrow has grown for all types of students at all types of schools," Asher said. "And the amount that students are borrowing is driven by the share of cost that students and families are expected to cover after aid. Now those costs have risen faster than family incomes, faster than available grant aid."

Continue reading "The crushing weight of student loan" »

For starters, here's how not to declare bankruptcy:

OK, it doesn't matter if you say it or declare it, you actually have to file a petition and schedules.And as Judge Paul Glenn of the Florida court explains here, those documents - and the testimony given as the Meeting of Creditors - is given under oath. Failing to disclose assets is grounds for losing the discharge and even facing criminal prosecution.

Santa Rosa-based attorney Jim Sansone notes that come January a new law will require additional notices to tenants in foreclosed homes. Under new Code of Civil Procedure 1161c, notices must state, among other things:

"You may have the right to stay in your home for 90 days or longer, regardless of any deadlines stated on any attached papers. In some cases and in some cities with a "just cause for eviction law," you may not have to move at all. But you must take the proper legal steps in order to protect your rights."

More importantly, San Francisco-based Tenants Together reported in October the new law protects foreclosed tenants from negative credit reporting just because a case was filed against them. Now, eviction cases are not reported, unless the foreclosing plaintiff actually prevails at trial.

Continue reading "New law offers protections for California tenants in foreclosed homes" »

The U.S. Attorney is prosecuting three southern Californians, who ran a scam that ripped off homeowners trying to forestall foreclosure by transferring fractions of homes to fictional people and then filing fraudulent bankruptcies on behalf of those non-persons, the L.A. Times reports.

In his plea agreement, Irving Cohen, 74, admitted transferring one-eighth ownership of one home to a bogus name, Marcus Lamont Collins, and then filing a bankruptcy petition under that name. He then used the bankruptcy filing to force Texas-based lender Ndex West to halt a planned foreclosure sale of the property for several months, Cohen acknowledged in the plea agreement.

A few days ago, I covered the basic eviction notices. What's more interesting is the defenses that can be raised on the different notices. Consider:

• Three-day notice to pay rent or quit. The primary defense to this notice is habitability. Every residential rental comes with an implied warranty of habitability. If the unit is uninhabitable (Civil Code 1941 details several factors that are clear proof of uninhabitabilty but the list is not exhaustive), then the duty to pay rent disappears.

  The question with habitability defenses is that even when the tenant prevails, the judge will determine how much rent is still owing. If it's more than $0, the tenant will have to pay the reduced rent. If she can't, the landlord will still win. The habitability defense is the right to pay rent.

• 30/60/90 notice to vacate. These notices don't give a reason for the eviction. They just tell you it's time to go. The only defense to these kinds of notices is that the eviction is retaliatory. That generally means there was a government inspection and the landlord was ordered to make some repair. Rather than making the repair, the landlord evicts you. That's retaliatory.

• No-recourse evictions. It's unusual to see notices where the landlord tells someone to get out in three days because their violation is so incurable. The defense is simply that the landlord cannot prove such extreme behavior. For instance, it's very difficult for a landlord to prove someone is dealing drugs, short of hiring an undercover PI.