Bankruptcy Blog

Section 523(a)(5) of the Bankruptcy Code now makes all support obligations non-dischargeable in all chapters. In addition, all property settlement debts owed to a spouse, former spouse, or a debtor’s child are non-dischargeable in a Chapter 7. Therefore, a non-debtor spouse is no longer technically required to file an adversary complaint to block a debtor spouse from trying to bankrupt debt owed under a property settlement agreement. However, it still makes sense for a non-debtor spouse to file an adversary complaint. A non-debtor spouse should be completely certain that the debtor ex-spouse does not discharge marital debts owed under the agreement. Due caution should be exercised until the bankruptcy laws on these issues are settled. The ability to pay and the balancing tests have been eliminated from Section 523(a)(15) of the Bankruptcy Code, and Section 523(c) of the Code was amended so a property settlement discharge proceeding is no longer required to be brought into the bankruptcy court. It is important to emphasize that these types of debts still remain dischargeable in a Chapter 13 case. Therefore, most future bankruptcy litigation over family law debts will be contested in a Chapter 13 case rather than a Chapter 7 Case.

The Law Office of Thomas Hogan is a bankruptcy & divorce law specialist who is prepared to help help you. Call (209) 214-6600 to speak with our Modesto Divorce Attorneys.

Bankruptcy Concerns

Written on: August 14th, 2013

It is not uncommon for potential bankruptcy clients to come in for a consultation with their own pre-conceived ideas that are not always fact.  It is always our goal to get these concerns out in the open so we can try and relieve some of the burden  and get down to the facts. Below I have listed a few of the most widely held concerns that I have been asked about:

1)      That once a bankruptcy is filed, I can not keep any assets- that the home, cars and dog will have to go- this is not the case- actually, in most cases, we are able to protect all of the clients property and all of the debt is wiped out in the bankruptcy filing.

2)      That once a bankruptcy filing takes place that they will not be able to get any credit for next 7-10 years- not true- in many cases, once the bankruptcy has been completed and the debt discharged, most individuals receive offers of new credit right away- low balances to start, but generally decent interest rates- this allows individuals the ability to begin rebuilding their credit right away.

3)      That once a bankruptcy is filed, I can not keep my financed home or car(s)- also not true- as long as your payments are current on your financed assets,  you can keep them and continue to pay the lenders- this will allow the individual to continue rebuilding their credit post bankruptcy.

4)      That once a bankruptcy is filed, I will not be able to buy a house for 7-10 years- not true- it is a common rule of thumb that once a bankruptcy has been discharged, after two years, individuals would be eligible for FHA insured loans with competitive interest rates.

5)      That if an individual is married, they can only file bankruptcy if their spouse files- this is also not true- individuals have the right to file a bankruptcy singly even if they are married- community assets held by the married couple must be considered in the bankruptcy filing to ensure the assets are protected and then the individual can achieve debt relief. It is , in most cases, best to file jointly, but it possible for married individuals to file singly.

It is our goal at the Law Office of Thomas Hogan to get all the facts and concerns from our potential clients and do our very best to put them at ease during this difficult time- no one ever wants to have to proceed with a Bankruptcy filing, but in some cases it may very well be the best decision for getting a clean start.

Sacramento, CA — With the presidential election coming up along with the ballot voting for the new tax hike in November and the overwhelming budget deficit,  Governor Jerry Brown and his Democratic Party lawmakers have been inundated with threats and warnings on what will happen if the proposed tax hike to cut the deficit should fail come November.

California's New Budget -- Sink or SwimA $91.3 billion state budget has been created and on the other hand  $6 billion worth of cuts has been signed by the lawmakers and Governor Brown in case their initiative fails. That would mean less funding for the local police, shorter school years, and potential tuition fee increases in the California State University systems and the University of California.

The new state budget has been designed so that the people will vote for the tax initiative or else  it or else the consequences will be pretty much catastrophic. These budget cuts will impact the public education system a whole lot and the public school districts are already struggling despite accounting for more than half of the state’s expenses. In the new proposed plan,  the school year could be reduced from the current 175 days to 160 days (of course, there will be some happy students when they hear this). If in case this goes through, California will be 20 days behind from the national average of the 180 days school year.

This new budget plan did not also sit  well with the Republican Party. State Sen. Anthony Canella, R-Ceres, questioned why the budget for education must be reduced to $5.4 billion when the state revenue for this year is higher than that of last year’s. He further added, “maybe you’ll let the kids out of school but the teachers will still be employed and in addition to that, they’ll get their full retirement for the year.

Connie Conway, Assemblyman Republican Leader has this to say, “It’s a disgrace that Democrats  are playing politics with the budget to sweeten the appeal  for ill-fated  taxes at the ballot box.”

Despite the rabid comments of the Republicans based on the recent polls, Governor Brown’s initiative was leading with 52% in favor of the tax initiative and 35% opposing it but the scary part is that the voting is still in November and opinions might change.

Part of the initiative is to provide additional funding to the public universities provided that the tax initiative passes voting and that the schools do not increase their tuition fees. Schools like the University of California are agreeing with Governor Brown’s plan and has agreed to not pursue the 6 percent tuition increase this fall.

According to UC spokesperson Dianne Klein, ” We do think that it’s a positive step toward bringing stability to funding for the University of California but it’s going to take some extraordinary measures to balance our budget without a fee increase.” But if the initiative fails come election day, the California State University and University of California school systems will end up $250 million short of funding from the state which will then create a situation for a mid-year tuition fee hike.

California is almost in dire straits, with Stockton going belly up and being gang banged by economic problems, it is not hard to imagine that the entire state of California might as well end up filing for bankruptcy one of these days. With the new California budget, people are caught between the devil and the deep blue see in their choices. It’s damned if you do, damned if you don’t.

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