Bankruptcy news about recent developments in the area of insolvency law, both in the process and about new cases and changes in bankruptcy law itself.
Attorney Hale Andrew Antico was voted President of cdcbaa for a third term, serving in 2024. Mr. Antico, a President-Elect who is also Immediate Past President of the prestigious bankruptcy attorney association, has proudly served on its board of directors for well over ten years.
Continue reading “Hale Antico Voted CDCBAA President for Third Term”
The Department of Justice just announced that the first drop in median income for Chapter 7 bankruptcy in a while is happening on November 1, but the negative impact will be significant only for 1-person households in California.
Continue reading “Chapter 7 Median Income Drops November 1, Impacting Means Test”
November 2022 update: The student loan payment pause has been extended again, for the sixth time, to June 30, 2023. The pause may end and payments resume if lawsuits are resolved first. If the June 30 2023 student loan pause lapses without litigation being resolved, payments will resume 60 days after that. Also big news in Nov 2022: the Biden Justice Department (DOJ) has announced new guidance which will make it easier to discharge student loan debt in bankruptcy.
April 2022 update: The student loan payment pause was set to end May 1, 2022, but the Biden administration extended it through August 31, 2022. It was previously set to end on May 1, 2022. Since March 2020, millions of student loans were given forbearance and deferment with no payments due, interest stopped accruing, and there have been no collections against those in default due to the student loan payment pause.
Now, all that student loan relief changes back to normal on Sept 1, 2022.
Continue reading “Student Loan Payment Pause Extended: Deferment Thru June 2023”
Yesterday, the Justice Department announced a new plan for student loan forgiveness in bankruptcy. The change could make it easier for people to eliminate — or “discharge”– student loan debt and to finally achieve student loan forgiveness and a fresh start in bankruptcy. Here is what it all means.
Continue reading “Student Loan Forgiveness in Bankruptcy: Top Keys for DOJ Guidance”
SB1099, the new California exemptions increase which gives debtors in bankruptcy more protections, is now law. The new California exemptions for 2023 help people in bankruptcy keep more of their assets, including their cars, their home, money, support pay, and sick leave. The bill was signed by the governor yesterday, and takes effect 1/1/2023.
Continue reading “SB1099: New 2023 California Bankruptcy Exemptions Increase”
The California eviction moratorium ends September 30. Foreclosures have spiked as those moratoriums ended. Student loan deferment ends January 2022. But for renters, there are still options, particularly locally with Los Angeles County and City of Los Angeles moratoriums on evictions.
Back in June, California governor Gavin Newsom signed legislation extending the California eviction moratorium. While federal eviction protections ended last month, California was still protected. The end date for Calif renter protections is September 30, 2021.
The COVID-19 Delta variant is running rampant. You’d think that the California state legislature would pass a bill extending the deadline. In June, legislators beat the deadline with days to spare before June 30. However, now, there are just hours to go.
The legislative session ended weeks ago on September 10. So the people California sent to Sacramento are not there to extend the moratorium.
Regardless, it appears that state representatives don’t have the will to extend the protections again. “I believed our eviction protections for tenants should be extended beyond September 30. The Delta variant and the end of many unemployment benefits make that more urgent. Unfortunately, some of my colleagues feel differently, and there’s not consensus for that,” said David Chiu of San Francisco.
So, California’s legislature is out of the picture. This leaves Gov. Newsom as the last hope to extend the landlord restrictions. However, earlier this week, Newsom signed an affordable housing package. Missing in that and his statement was any indication he’d extend the protections.
First, the Los Angeles County moratorium on evictions is still in place. The Los Angeles County Board of Supervisors extended it to January 31, 2022.
Also, there’s an LA eviction moratorium protecting renters in the City of Los Angeles until August 1, 2022.
Further, California renters still have hope. A renter can submit a declaration that they’re unable to pay the full rent. City of Los Angeles renters can apply for relief of 100% of rent and utilities owed. Statewide, beginning Oct 1 and going through March 31, 2022, renters earning 80% of the area median income will be protected by a process through the courts . If facing eviction in state court, renters will need to show evidence they applied for rental assistance, so this is a key step.
Finally, if there’s the ability to make some sort of monthly payment on back-rent, a Chapter 13 bankruptcy can maybe be an option. Because landlords are sacred cows in bankruptcy, renter protections are thin. But it could mean working out a deal if you have enough income to make normal rent payments, cover living expenses, and still have money left over for catching up quickly.
In short, while not perfect, it seems the best shot for CA renters with the looming end of the California eviction moratorium is the state program. This is not a guarantee that this will protect renters from a future eviction if taken to court. However, it’s at least one measure California renters can take to try to have a defense.
Post-Seminar Update: It was a fun, two-hour cdcbaa program, and the Chapter 13 trustees’ attorneys were very open with their policies. For instance, the panel shared a lot of information in an engaging format. Also, one of the trustee lawyers said it helped to have them share information; they learned a more efficient way to do things. Finally, the bankruptcy lawyer attendees were very involved, asking questions and even bantering with the Chapter 13 trustees’ lawyers.
Continue reading “cdcbaa Moderator Hale Antico Hosts Chapter 13 Trustee Panel”
The following was provided to the newsletter of the cdcbaa, the largest organization of Los Angeles bankruptcy attorneys serving consumer debtors, by its two-term President, Hale Andrew Antico.
We’re approaching autumn. That means the start of school, football, pumpkin spice everything, and this: welcome to our final cdcbaa newsletter of 2021, and the last of my second term as President of cdcbaa. We thought we were turning the corner against the pandemic. But, the dreaded Delta variant has affected many people, causing a new wave of cautions. With it, we as a society, and yes, attorneys helping people, have become somewhat accustomed to a new normal. This means embracing doing business remotely while trying to balance with safely connecting in-person.
With that, the cdcbaa is proud to announce that our membership total continues to increase to over 215 members, despite the fact that the year is almost three-quarters over. The cdcbaa hasn’t seen membership levels this high seen since the Great Recession almost ten years ago. Much credit for our growth goes to Membership Chair David Shevitz, the cdcbaa board members on his committee, and their stalwart outreach efforts.
We’re almost two years into a global pandemic. One would think that with rising membership in a bankruptcy organization, consumer filings would be spiking with an anticipated surge. Yet, filing numbers continue to surprise expectations. In 2021, filings for all chapters in the Central District are down about 13% from lockdown year 2020. And that year showed a total 27% lower than 2019. Thus far in 2021, only two months have broken 2,000 Chapter 7 filings. In contrast, during the 2020 pandemic, eight months last year surpassed that benchmark.
The California eviction moratorium, which has protected so many renters, is set to expire on September 30, 2021. Mortgage forbearance programs are set to also end on that day. September 30th is also the expiration of student loan forbearance. If not extended, any one of these events may impact consumers and filings, and we must be ready to help those who need it with compassion and skilled expertise.
There’s some promising news which could help college graduates in the U.S. Senate. Two senators introduced a bipartisan bill which would make many student loans dischargeable in bankruptcy by amending 11 USC 523(a)(8). This potential student loan reform through bankruptcy is long overdue. The Fresh Start Through Bankruptcy Act is still in committee. However, it’s our hope that this bill will become law to help millions of struggling people discharge their school debt, so stay tuned.
One way to keep informed in this fast-changing world is the cdcbaa’s very popular MCLE programs. This month, I’ll be moderating a panel of Chapter 13 trustees’ staff attorneys. We’ll be discussing their offices’ measures in response to the pandemic such as the CARES Act. We’ll also take a look at their standard procedures, and where there is variance and agreement among the divisions to better help Chapter 13 bankruptcy attorneys.
Under the leadership of M. Jonathan Hayes and Roksana Moradi-Brovia, the cdcbaa continues to put on timely, informative, and popular programs to inform its members about developments in the law in an everchanging landscape. In May this year, Judge Mark S Wallace and Judge Wayne Johnson led a discussion of lien-stripping and family law-bankruptcy crossover with CDCA.
In June, we had fantastic programs on the developing issue of 706(b) conversions, as well as state court litigation. July saw two panels: one presenting on postpetition sales and another on nonattorney professionals in bankruptcy. A judge in attendance remarked both hours formed the best program they ever attended! The cdcbaa is appreciative to all those who give their time to present and help keep our members informed with the latest and best information.
Under the leadership of cdcbaa board member Keith Higginbotham (who also serves on the Bar Advisory Board), the cdcbaa is looking forward to gathering to host our annual Calvin Ashland Awards Dinner this November. We’ll be the awarding the honor of Judge of the Year to a deserving Chief Judge Maureen Tighe. This gala will be held in a ballroom atop the Universal Sheraton with a spectacular view overlooking the San Fernando Valley and Hollywood Hills, so you won’t want to miss out this November.
As always, I’m appreciative of the cdcbaa board of directors. Together, we accomplished so much these past two years. Marcus Tiggs led us on a migration of our popular listserv and added our recorded programs to our upgraded website. Under the stewardship of Treasurer Jeff Hagen, the cdcbaa is financially healthy and strong. Hard-working Daniela Romero edited this newsletter, and many others the past two years. And of course, my vice-president Lucy Mavyan has been key in helping out with numerous projects. She and Tamar Terzian have reached outside of our district to partner with consumer groups in other states.
And all this doesn’t even mention how tremendous the cdcbaa board of directors was in adapting to sudden change. Responding to pandemic measures and social distancing, we went from an educational organization that presented primarily in person, to one that pivoted to be transformed overnight to online-only, with eight webinars a year, each attended by hundreds of people. The feedback gathered by board member Gary Wallace shows that all this was done by providing outstanding customer service. And for that, I can only give enormous credit to the longtime heart and soul of our organization, celebrating her 10th year helping people, our skilled and talented administrator, Linda.
It’s been an exciting two years, and the cdcbaa is in fantastic shape to face a future that’s as unpredictable as life since 2020 has been. It’s been my honor serve cdcbaa and its members while working shoulder-to-shoulder with our many stakeholders and partners as we weathered through a devastating global pandemic. I’m humbled by our members and board to have been provided this honor, and I look forward to continuing to support the cdcbaa in the years ahead.
Hale Andrew Antico is President of the cdcbaa and practices bankruptcy law in Palmdale and Santa Clarita for over 20 years.
Sept 30 Update:Â There are still some renter protections now that the California eviction moratorium ends today. Click for more details.
In 2021, eviction moratorium by the CDC has been in place since for about a year-and-a-half. It’s been protecting people and keeping them in their homes during a global pandemic. You probably heard that the Supreme Court ruled on the eviction moratorium, ending the protection. What does the Supreme Court ruling mean, and especially to California renters?
The Supreme Court ruled in a 6-3 opinion that the eviction moratorium was not constitutional, with the three liberal justices dissenting. A key part of the ruling said
“It would be one thing if Congress had specifically authorized the action that the CDC has taken. But that has not happened. Instead, the CDC has imposed a nationwide moratorium on evictions in reliance on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination. It strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts.”
Bottom line is that the Supreme Court said that if the eviction ban were to continue, the right way to do it would’ve been through Congress, not the CDC.
The good news is that the eviction moratorium in California is still in place, for now. Back in June, California governor Gavin Newsom extended the existing California eviction ban until September 30, 2021.
After yesterday’s ruling , the California governor wrote, “California renters will NOT be impacted by this news, the state’s eviction moratorium remains in effect. We’re focused on ensuring tenants and small landlords get the rent relief they need under California’s renter assistance program, the largest in the country.”
As a result, despite the Supreme Court ruling, the California eviction moratorium protects Californians until September 30, 2021. Given Governor Newsom’s statement yesterday, it seems that he’s ready to extend protections for California renters into October and beyond.
READ MORE: Successful court ruling for Los Angeles eviction moratorium
When the California eviction moratorium ends, it’s not clear if bankruptcy can provide much help. In some cases, a Chapter 13 bankruptcy could help cure rental arrears. However, debtors must repay the arrearages for executory contracts and unexpired leases “promptly” in the Chapter 13, per 11 USC 365(b)(1).
Here’s where it gets interesting. Most Chapter 13 cases are 5-year terms. That doesn’t seem very “prompt.” Given the nature of rental agreements, five years isn’t a reasonable time to cure a one-year lease. Experience shows that it sometimes can be done in six months.
Most landlords don’t want vacant property, or to have to go find a new renter. Sometimes some money is better than none. A 6-month period has worked in some Los Angeles bankruptcy cases, but it needs to get the consent of the landlord. Unfortunately, there’s nothing to compel the landlord to be reasonable. Each case is different, so it may be worth contacting a local bankruptcy attorney for a consultation.
2022 update: Fresh Start Through Bankruptcy Act of 2021 is still in committee, and nothing appears to be happening with it. However, the Biden administration just gave the Justice Department and Department of Education guidance to make it easier to discharge student loans in bankruptcy. Unlike the FSTBA, the Biden plan doesn’t require anything of the new Congress.
The Fresh Start Through Bankruptcy Act of 2021 was introduced into the Senate this week. What’s startling about this is that it’s a bipartisan bill, helping its future. The impact of the Fresh Start bill (or FSTBA) is that it would provide student loan forgiveness in bankruptcy. Bankruptcy for student loans hasn’t been an option for decades now, being a massive burden. This student loan bankruptcy reform would change that.
If the Fresh Start bill becomes law, it would eliminate student loan debt in bankruptcy for those student loans that were first due ten years prior. The undue burden test would apply for those newer than ten years. It’s still going to be tied to the means test, making a Chapter 13 a good solution for those who can afford to pay some, but not all.
In short, bankruptcy for student loans is on the table. But as of August 2021, student loan reform is still in the future. Write or call your senator and if/when it passes, contact your member of Congress. The Fresh Start bill still needs to become enacted into law. Now that student loan forbearance is set to end in 2022, perhaps Congress can get busy on this.
If you’re interested to learn more about the text of this student loan forgiveness bill and more precise information how it would work, I did a much more detailed write-up on the Fresh Start Through Bankruptcy Act of 2021 here.