Sonoma County Bankruptcy Lawyer Blog

The Windsor woman who embezzled $179,000 from Healdsburg attorney Michael Villa is going to jail for a year, The Press Democrat reports. It turns out April Hale is a serial embezzler who stole from previous employers, as well.

Sonoma County Superior Court Judge Dana Simonds aptly said in sentencing Hale:

"Something is terribly wrong in your thinking process for you to think this is OK."

Hale kept two sets of books, siphoning off $6,000 a month to her personal accounts.

Ms. Hale buried me alive for 42 months while systematically looting my business," an emotional Villa said in open court. "This was a tragedy. It was a life-altering experience."

It came out that Hale also stole from Sonoma Image in 1999-2000 and from another employer subsequent to that. That sealed her fate for jail time. The judge denied her request for house arrest, noting that her husband could care for her nine-year-old son.

When Hale is free, she will not be permitted to take any job involving the handling of cash or finances, the judge said. "The behavior you have demonstrated is something you need to get some help with," Simonds said.

SANTA ROSA, CA -- I was speaking with Brian Barboza today about folks who come into talk about bankruptcy but then don't follow up. Six month, nine months later, you get a call -- they want to file bankruptcy and right away! That's a sure sign they got sued or had their wages garnished, or some other crisis.

Their bankruptcy filings didn't have to be an emergency and they could have avoided unnecessary collection calls, credit card payments and the stress of a last-minute filing.

Similarly, San Francisco bankruptcy attorney Jeena Cho, in a nice Q&A with the San Francisco Chronicle, points out that people typicallly wait much too long to file. She says:

The situation I hate seeing the most is when I meet with a client who completely depleted their retirement savings, are close to retirement age and they still have to file for bankruptcy because it wasn't enough to repay all the debt. This is harmful for three reasons: 1. your retirement savings should be used for retirement - not paying off your credit card, 2. there is often tax consequences for early withdrawal. Recent tax debts are generally not dischargeable (forgiven), so you've effectively traded in dischargeable debt for non-dischargeable ones. 3. retirement savings are protected in bankruptcy.

This goes to people's sense of the "immorality" of skipping out on debts through bankruptcy, but that's a topic for another post.

SANTA ROSA - The credit bureau Experian is now including positive rental payment data on consumers' credit reports. And later this year, they'll include negative data, as well. The credit bureau hails this as a great benefit to consumers, who will be able to build up their credit ratings merely by paying their rent, as the LA Times reports.

It's "one more thing that lenders, landlords, insurance agents and even employers can learn about you," said Bill Hardekopf, chief executive of LowCards.com, a credit card comparison website.

Hardekopf added, "This could be great news for renters who dream of owning their own home."

Is it really? I think that really depends on the economy. For the vast majority of renters who routinely pay the rent on time, sure, it could really help build up the credit rating -- especially if you're renting after foreclosure or bankruptcy. But if people continue to have trouble making ends meet, late rent payments on your credit report could be as bad as an eviction.

Retailers were shocked by a California Supreme Court decision that retailers cannot ask for and store ZIP codes when customers pay by credit card. The Sacramento Bee reports that the Court held that ZIP codes are part of an address that allows others to identify an individual.

The Court said that with a name and a zip code, retailers can and do manage to identify addresses and phone numbers, in violation of California privacy laws.

Richard Holober, executive director of the Consumer Federation of California, hailed the ruling as "a great victory for consumer protection and common sense. It's nonsensical that a retailer can collect bits and pieces, turn them over to a data aggregation service and have a field day selling the information and otherwise using it for business purposes."

A strong victory for consumers and privacy rights and one that will limit merchandisers' ability to get around the law.

"I'm numb," is how Bankruptcy Judge Alan Jaroslovsky describes the number of debtor petitions in his Santa Rosa courtroom. According to the Santa Rosa Press Democrat, there were more than 5,000 filings last year, triple that of just three years ago.

"The driving factor is real estate," said Jaroslovsky. "Real estate values are going down and they're not coming back."

In Chapter 13, debtors create a five-year payment plan in which unprotected income goes to pay off creditors at a reduced rate, perhaps 50 cents on a dollar. In such a plan, you may be able to keep your home by paying off the arrears during the life of the plan. Chapter 13 filings have gone up almost fivefold since 2007.

If you're thinking about bankruptcy to hold onto your home, think long and hard. If your home is seriously underwater, do you really want to be making payments with no prospect of equity? Will you be able to make the plan you set up?

On the other hand, if stripping your second would make your life easily affordable and you're willing to make some payments to creditors, Chapter 13 could make sense.

Chapter 7 or 13? Shoot me an email or call me to discuss the options.

Check out my new commercial - a first! - which will run on Santa Rosa's KFTY Channel 50, soon to be available on Comcast. What do you think? Send me an email in the box to the right.