Sonoma County Bankruptcy Lawyer Blog

The California Credit Law Blog reports, among others, that recipients of federal benefits will get new protections from creditors under a federal rule going into effect May 1.

The new rule was pushed by the National Consumer Law Center as a way to make technical protections into real ones. Under current law benefits are protected but in reality they can still be seized or garnished and it's up to the debtor to take legal action to claw them back.

The new rule prohibits the practice of denying beneficiaries access to these essential funds in bank accounts. It requires all banks to determine whether an account contains protected funds. If an account contains protected funds, the bank is required to protect two months of benefit payments from garnishment, according to an NCLC press release (PDF).

Small Business Bankruptcy Filings Take a Dive, the article is headlined and that seems like good news for the economy. A sign of a recovery, if small businesses are at least staying in business.

Then comes the kicker -- "The one exception was California, where economic turmoil remained high last year and accounted for nearly 20 percent of the country's business failures."

That is certainly the case in Santa Rosa and Sonoma County, where the local economy shows a lot of resistance to any forward movement. Just last month, The Santa Rosa Press Democrat reported on a local economist's findings that the local recovery is tepid at best.

"There's still a lot of uncertainty out there," Sonoma State economist Robert Eyler said. "That's what's keeping us from growing."

Speaking at the Economic Outlook Conference at the Sheraton Sonoma County hotel in Petaluma, Eyler said that the lack of bank lending was holding small businesses from hiring and growing.

That was exactly the story I was told by a restauranteur I recently did a Chapter 7 for. He had a successful small restaurant and things were going great until the credit crunch hit. Then he couldn't get enough credit to buy food and wine for the week and he couldn't pay the bills on his own. The inevitable result: a visit to a bankruptcy attorney.

No suprise then that small business filings aren't falling in Sonoma County.

One Tuesday at the Sonoma Superior Court's unlawful detainer calendar in Santa Rosa, I spoke briefly with a couple who were contesting their eviction based on their medical marijuana cards. Their argument was that they couldn't be evicted for having (growing) drugs on the premises because of California's med-mar cards.

Based on the current state of California law, that's pretty much a fantasy. The San Diego Union-Tribune ran a lengthy piece on the question on the question and concluded that unlike Arizona's new law, California law does not give tenants a clear right to smoke and grow in a rental unit.

The Arizona law states:

No school or landlord may refuse to enroll or lease to and may not otherwise penalize a person solely for his status as a cardholder, unless failing to do so would cause the school or landlord to lose a monetary or licensing related benefit under federal law or regulations.

Since Prop 19 failed -- and its dubious that even Prop. 9 would have allowed tenants to grow pot with impunity, as I wrote here - tenants are not in a great position to make that claim.
Perhaps tenants could challenge a drug-use eviction as discriminatory, but it would be an "uphill battle," says Alex Kreit, a law professor at Thomas Jefferson School of Law.

Continue reading "Legal perspectives on Santa Rosa renters' medical marijuana rights" »

Have you thought about walking away from your home? For many Santa Rosa, Petaluma and Rohnert Park homeowners, that has to be a kitchen-table discussion these days. The Santa Rosa Press Democrat reports that some 31,000 Sonoma County homes -- 29% of all homes -- are underwater.

That leaves people trapped in "negative equity" -- unable to sell and with little chance of ever breaking even on their loans.

Compared to the country, Sonoma County is running slightly worse. The U.S. has 29 percent of homes underwater.

All of this seems to indicate that there will be no shortage of distressed homeowners, who will have to face the prospect of walking away or trying to protect the home in a Chapter 13. I would challenge homeowners to take a careful look at whether preserving a home really makes sense, or if you crunch the numbers, renting is a better option.

Of course, every case is different, the other debt loads have to be considered and so on, but the depth of the equity crash in this county is sobering.

The San Jose Mercury News reports that Hall of Famer and ex-Oakland A Ricky Henderson is playing hardball with a former tenant over a $1,500 security deposit.

Henderson took time out from spring training to make an appearance in Alameda Superior Court to defend withholding $550 from tenant Timothy Ault because, although Henderson approved Ault's breaking the lease, Henderson had to find a new tenant.

Henderson, who according to www.baseball-reference.com made at least $44.5 million in his professional baseball career, told Rasch that he decided to keep a $300 pet security deposit Ault paid and $250 of a $1,550 security deposit because his management company never had a chance to check the apartment for damage between the time Ault left and a new tenant moved in.

How petty is this for a millionaire baseball player? Even if the tenant wins his whole $2550, what difference does that make to Henderson?

This is the story of tenants winning big -- and the Court of Appeals upholding that victory last month -- against an amazing scumbag -- Oakland landlord Richard Thomas, who besides intentionally withholding security deposits from hundreds of tenants engaged in super-aggressive legal tactics to stop tenants from suing him. He would countersue for an amount over the small claims limit, forcing tenants to drop their security deposit claims because they couldn't afford lawyers to represent them in civil court. Indeed, he has been deemed a "vexatious litigant." And he has sued virtually every attorney he's ever had.

Back in 2008, the Eviction Defense Center filed a class action suit against Thomas for 200 tenants and won more than $180,000 in damages and $5.5 million in punitive damages. The punitives were knocked down to $1 million, although Thomas was also looking at several hundred thousand dollars in attorneys fees.

He did what he usually does and appealed the case to the Court of Appeals. The Court upheld the verdict, punitive and attorneys fees amounts.

Now he's promising to appeal to the California Supreme Court, which, although the Court will likely decline to hear the case, will further delay justice.

Continue reading "Court of Appeals upholds class-action verdict against Oakland slumlord who ripped off hundreds of tenants" »

If you're scheduling your free consultation with us, please download and fill out this extensive worksheet before coming in. We realize you won't be able to fill everything out but doing this work before your first meeting will make the process SO much easier on everyone:

Bankruptcy Worksheet

It's a PDF file, so make sure you have Adobe Acrobat.

Bankruptcy Tips with Richard C. Koman, bankruptcy attorney in Santa Rosa CA.
Bankruptcy can only be used once every eight years so if you're going to file, you need to make sure this is the right time to file.
Two kinds of bankruptcy: Chapter 7 and 13. Chapter 7 is a full discharge of debt. Chapter 13 is really a payment plan where you use disposable income to pay off creditors.
The reason Chapter 13 is popular is that if your house is under water, the second loan can be stripped away and that can mean you can afford to keep your house.

The steps of bankruptcy: Specifically, you need to take a prefiling consumer education class, after filing there is a meeting of creditors where the trustee asks you questions about your assets and debts, and there's one more class after that, the debtor financial education class. After that you'll get your discharge in 3-4 months.

And of course everybody can always go to richardkoman.com to find out more about these steps.

How does this effect my credit? People coming in to talk about bankruptcy always ask that and the answer is, isnt your credit pretty much destroyed? If you look at bankruptcy as a curtain coming down, on one side you have all the late payments, nonpayments, writeoffs and the risk that the person is going to file. After the curtain comes down, all that debt has been wiped out so you can afford a little new credit and you can't file for eight more years. You can easily start to rebuild your credit. A few years down the road you start looking like a pretty good customer instead of a pretty bad one.