Category: Bankruptcy News

student loan forbearance ends 2022

Student Loan Payment Pause Extended: Deferment Thru June 2023

Student Loan Payment Pause & Deferment Extended thru June 2023

Student Loan forbearance and payment pause extended to July 2023; there are still options

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.

Will student loans be deferred again in 2022?

As we get closer to election season, it looks like there may be more student loan deferments. Back in August 2021, the Department of Education called the student loan pause a “final extension.” In December 2021, the White House confirmed that the student loan payment pause will not be extended. Then earlier this year and again, today, that’s exactly what the Biden administration did.

What action items should I do?

Update your contact information with your student loan servicer. While you’re there, let them know that you want to resume automatic payments if that’s your goal.

Alternatives to paying unaffordable student loans

Apply for student loan forbearance

If you can’t afford to pay your student loans, you can still apply for student loan deferment or forbearance. While it’s been automatic the past two years, student loan forbearance or deferment is still an option in 2022.

Income-driven student loan repayment plans

Also, there are income-driven repayment plans such as IBR, ICR, PAYE, or REPAYE. These programs set your student loan payment based on what you can afford, which state you reside in, and family size. These income-based repayment plans are not guaranteed acceptance, and not every loan type is eligible for each program.

Will bankruptcy help with my student loans?

You probably heard that, as a rule, you cannot discharge student loan debt in bankruptcy. However, there are three things to consider with student loans and bankruptcy.

First, in extremely rare situations, you can discharge student loan debt in bankruptcy. You may have heard that the standard is undue hardship, and that’s exactly what you’ve got. However, courts have ruled that everyone filing bankruptcy has a hardship, and to show it’s undue is difficult, challenging, and very unlikely in most cases.

Second, filing Chapter 13 bankruptcy gets you a five-year deferment on repaying your student loans directly. You don’t generally need to apply or ask for the forbearance; it’s automatic. The student loan debt shares in the debt consolidation plan payments.

Third, there’s a Fresh Start bill in Congress which may change student loan forgiveness and allow some student loans to be discharged in bankruptcy. As 2022 begins, this S2598 bill is still in the Senate and hasn’t moved since August.

Contact us for a consultation

If you’re in the Los Angeles County area, contact us and let’s arrange for a no-obligation Zoom consultation to see if bankruptcy would help your student loan situation.


    open door to easier bankruptcy forgiveness of student loans

    Student Loan Forgiveness in Bankruptcy: Top Keys for DOJ Guidance

    Explaining DOJ Guidance on Student Loan Forgiveness in Bankruptcy

    Bankruptcy attorney explains new DOJ guidance from the Biden Justice Department to make it easier to get student loan forgiveness in bankruptcy

    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.

    Current law of student loans in bankruptcy

    The way things are right now, student loans in bankruptcy are almost impossible to eliminate. This is because Congress has added a requirement to show not just hardship (as many people in bankruptcy experience), but an undue hardship. Courts have interpreted this very strictly, and, as a result, it’s extremely difficult to discharge student loans in bankruptcy.

    Does the Biden student loan initiative change bankruptcy law?

    Student loan debt in bankruptcy
    Student loan forgiveness may now be easier to achieve in bankruptcy

    No, the Biden student loan forgiveness plan does not change the law. That would take an act of Congress, literally. Unlike other Biden administration plans on student loan forgiveness, which have faced legal challenges, this current plan doesn’t change existing law or otherwise change existing contract law. It’s merely guidance from the head of the executive branch to the Department of Justice, in the executive branch, on how it can try to steer student loan discharge bankruptcy cases.

    So the Department of Justice decides student loan forgiveness?

    Bankruptcy judges make the ultimate decisions about student loan dischargability. The Biden administration plan for student loans in bankruptcy doesn’t change that. It just intends to make it easier for student loan forgiveness in bankruptcy by issuing recommendations to the bankruptcy court.

    Then what does the Dept of Justice have to do with bankruptcy?

    The Department of Justice is very involved in the bankruptcy process. One might think that the IRS is the government agency that rules bankruptcy, because they’re both connected to money. However, the DOJ administers the bankruptcy process through various trustees.

    Under the arm of the DOJ, the United States Trustee is the program which ensures the integrity of the bankruptcy program by prosecuting fraud, perjury, hidden assets, and other bankruptcy crimes. This is why the 341(a) Meeting of Creditors is so critical in every case, and why you should read my 12 crucial tips of do’s and don’ts before filing bankruptcy. But back to the DOJ.

    In other words, the Department of Justice doesn’t decide student loans in bankruptcy. However, under the Biden process for bankruptcy and student loans, the DOJ and Department of Education (also in the executive branch) would review bankruptcy cases with student loan discharge issues. They would then give the bankruptcy judge the agencies’ thumbs-up or thumbs-down.

    Biden student loan forgiveness bankruptcy
    The new student loan forgiveness in bankruptcy opens the door to an easier path to discharge

    To get there, the DOJ and Dept of Ed would review a few key factors to determine whether they will recommend discharge to the bankruptcy judge, who ultimately makes the final decision. Bankruptcy judges are independent thinkers who deliberate, consider applicable law, and provide much thought to the cases and the unique facts before them. It’s not clear how much weight bankruptcy judges will give to this government recommendation, as each judge and each case is different.

    The factors the Dept of Justice and Dept of Education reviews for student loan discharge

    Consistent with current case law of Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2nd Cir 1987), the agencies will review factors to determine if they will recommend discharge to the bankruptcy judge. It’s not all or nothing, as a partial discharge of student loan debt is possible. In re Saxman, 325 F.3d 1168 (9th Cir. 2003). These factors, in no particular order or weighting known at this point, are:

    Present ability to pay

    First, to evaluate this factor, DOJ attorneys will compare debtor’s expenses to two different things.

    1. To start off, the IRS has standards about what is considered reasonable expenses, and the Justice Department will compare those against the debtor’s bankruptcy petition and schedules.
    2. Next, assuming expenses are “reasonable,” Justice Department lawyers will compare debtor’s budget expenses to debtor’s income. If expenses exceed income, this step is satisfied.
    Future ability to pay

    Second, the Justice Department attorneys will then review various factors such as the debtor’s age, unemployment history, education status, and others. Assessing these variables, and based upon the debtor’s unique circumstances, the DOJ will try to predict whether it is likely that debtor’s financial position will stay the same, making it hard to repay student loans in the future. If they exist, certain variables are considered presumptions for future inability to pay.

    These include if the debtor: is 65 years of age or older; has a disability or chronic illness which impacts earning potential; has been unemployed 5 of last 10 years; has failed to get a degree in the field the student loan debt was for; has had the student loan in “payment” status for at least ten years. These factors create a presumption, and as always, can be rebutted.

    Good faith efforts

    Third, the Department of Justice will look at whether the debtor has made a good faith effort to repay the debts. Did the person contact their student loan servicer or provider for repayment options? Did they try to repay the debt? Have they responsibly managed their expenses? Was there enrollment in an income-based repayment plan? If not, is there a good reason?

    At least one of the following steps can be evidence to demonstrate good faith: making a payment; applying for a deferment or forbearance; applying for an IDRP loan or federal consolidation loan; responding to outreach from a student loan servicer or collector for the student loan debt; engaging with the Department of Education or one of their loan servicers about payment options, forbearance or deferment options, or loan consolidation; engaging with a third-party debtor believed would help them manage their student loan debt.

    The good faith standard also looks at whether the debtor’s efforts to obtain employment, maximize income, and minimize expenses.

    Assets of Debtor

    Lastly, the Justice Department will analyze debtor’s assets. Just because a debtor happens to own a home or other real estate shouldn’t be slam-dunk evidence that there’s a lack of undue hardship. However, the DOJ can look at and suggest debtor liquidated assets which are not necessary for the support of debtor and their dependents’ support and welfare. Exempt property does not escape analysis, but Dept of Justice lawyers are cautioned about using it in an undue hardship analysis.

    Can I reopen an old bankruptcy case and try to discharge my student loans under the new Justice Department guidelines?

    The new procedures and standards are only for future cases. If you filed a bankruptcy with student loans in the past, you cannot apply these new guidelines to the old bankruptcy. Footnote 22 of the DOJ guidelines:

    This memorandum applies only to future bankruptcy proceedings, as well as (wherever practical) matters pending as of the date of this Guidance. This Guidance is an internal Department of Justice policy directed at Department components and employees. Accordingly, it is not intended to and does not create any rights, substantive or procedural, enforceable at law by any party in any matter.

    However, while you cannot open a old bankruptcy to apply this Justice Dept guidance, you may be able to try to discharge them in a new bankruptcy. As there are time requirements you have to wait between filing bankruptcy of various chapters, consult with a bankruptcy attorney to discuss your specifics.

    Procedurally, does the new DOJ guidance on student loan bankruptcy automatically happen for all filings, or is action needed?

    A few things have to happen to kick off the Biden student loan bankruptcy process. First, of course, the person, or debtor, has to file bankruptcy. Note that this Biden student loan program doesn’t change the median income eligibility requirements for Chapter 7 and the means test. Someone still has to qualify for Chapter 7 bankruptcy. The alternative would be a solution with the student loans in Chapter 13, which can still be beneficial.

    Next, in the Chapter 7 bankruptcy, the student loan discharge process is not automatic. The debtor has to file additional paperwork, which is like suing the student loan lender in something called an adversary proceeding. It’s additional time and work, and if there is a bankruptcy lawyer involved (and there really should be), this will likely mean contracting for these extra services and an additional fee.

    Finally, after the adversary proceeding has been filed and served on the student loan company, there is an attestation form the debtor completes and submits to the government. The Department of Justice and Education Department will then coordinate their resources to help determine their recommendation to the bankruptcy judge.

    Results not guaranteed, but there’s hope

    We really don’t know how successful this new Biden student loan bankruptcy guidance will be. You have to qualify for bankruptcy, then the government has to make a recommendation, and then a judge decides.

    It’s ultimately unclear how cooperative the Department of Justice and Education Department will be with student loan borrowers under this new bankruptcy process. However, there is tremendous potential for the government applying the process with an eye on compassion and working with the borrowers who most need debt relief, a fresh start, and student loan forgiveness.

    If you have student loan debt and think you fit the above factors and are in Los Angeles County, Orange County, or Ventura County, please contact me for a case evaluation. Thank you for reading.

    time of bankruptcy filing determines homestead exemption

    9th Cir: To Avoid a Judgment Lien, Use Exemptions at this Time

    9th Circuit: Lien Avoidance Homestead Determined at Time of Bankruptcy Filing

    If someone wants to avoid a judgment lien in bankruptcy, is the homestead exemption the one at the time the lien attached, or at the time of the bankruptcy filing? The Ninth Circuit Court of Appeals has recently weighed in, and the answer can affect thousands of dollars of liens on your home.

    Why it matters

    Liens in bankruptcy don’t usually go away. But there are times we bankruptcy lawyers can reduce or avoid liens. You may have heard that the California homestead exemption got a massive increase in 2021. This protects more home equity than ever before for people filing bankruptcy.

    Now couple that with the fact that some liens in bankruptcy can be avoided if they impair an exemption. So, the bigger the exemption, the better the chances you can avoid a judgment lien and make thousands — or tens of thousands — of dollars of judgment liens disappear forever.

    It’s very common for bankruptcy attorneys to be asked to remove an old judgment lien from a property. This can be done by reopening an old bankruptcy case where the lien then existed but wasn’t known, or filing a new case if the lien now impairs an exemption. But for a new case on an old lien, given that the homestead law just changed; there can be confusion which timing — and exemption amount — is used.

    The question then is: to determine if the judgment lien impairs an exemption (a simple math problem), do we use the puny California homestead exemption at the time of the lien attaching where the lien won’t impair an exemption? Or the massively humongous homestead at the time of filing? It will determine the very question as to whether the lien can be removed in bankruptcy.

    The Ninth Circuit, citing the Supreme Court, clarified which timing counts

    In the battle of the clock, bankruptcy lawyers fight over which timing to use. The Ninth Circuit Court of Appeals just clarified the answer. It ruled that, “we must look to the amount of the homestead exemption that Boskoski could have claimed if, as Section 522(f) commands, the Greek Village lien against his property is disregarded.” Barclay v. Boskoski, WL 16911862 (9th Cir, Nov. 14, 2022).

    In doing so, the Ninth Circuit relied on the U.S Supreme Court case of Owen v Owen, 500 US 305 (Supreme Court, 1991). The Owen case involved a 522(f) lien avoidance issue also. In that case, a judgment was entered against debtor. Creditor then recorded a lien against debtor’s property, and then state law changed to better protect debtor with a homestead exemption.

    The Supreme Court ruled, “To determine the application of § 522(f) they ask not whether the lien impairs an exemption to which the debtor is in fact entitled, but whether it impairs an exemption to which he would have been entitled but for the lien itself.” Id. at 310-311. Or put differently, the language of 522f looks to the exemption the debtor would have been entitled but for the judgment lien.

    And if there was no “old” judgment lien, the debtor “would be entitled” to today’s (larger) California homestead exemption. And that exemption is large enough where the lien would impair the exemption, and therefore can be avoided by 522(f).

    A note about Wolfe v Jacobson

    The creditor here, Barclay, argued that the Ninth Circuit was bound by Wolfe v Jacobson, 676 F.3d 1193, 1198 (9th Cir, 2012). It wanted “the entire state law” followed, per Jacobson at 1199. This Jacobson reading would have had the Barclay appellate court “apply all limitations that a state places on its exemptions when conducting the Bankruptcy Code’s lien avoidance calculation—including California’s limitations on the application of its homestead exemption.”

    But the Ninth Circuit avoided that, and then pointed back to Owen, quoting the Supreme Court: “the Bankruptcy Code’s policy of permitting state-defined exemptions is not ‘absolute.'” Id. at 313. It found that the Owen case, involving lien avoidance, was a closer match than Jacobson, which doesn’t.

    The 9th Circuit continued: “Anticipating the issue we address today, the Court held that ‘it is not inconsistent’ for the Code to allow states to define their own exemptions but ‘to have a policy disfavoring the impingement of certain types of liens upon exemptions, whether federal- or state-created.'”

    In doing so, the Ninth Circuit in Barclay distanced itself further from Jacobson. Note that just a few months ago, new California SB1099 law was passed, which contained provisions which some speculate will limit Jacobson in other areas. By going out of its way to distinguish Barclay from it, it seems the Ninth Circuit is eroding the Jacobson holding without overturning it (yet).

    The Ninth Circuit Already Ruled on Timing of Exemptions

    The In re Barclay ruling is consistent with another case the Ninth Circuit affirmed on a very similar topic.

    “It is well-established that the nature and extent of exemptions is determined as of the date that the bankruptcy petition is filed.” In re Chiu, 266 B.R. 743, 751 (9th Cir BAP, 1999), later affirmed, 304 F.3d. 905 (9th Circuit Court of Appeals, 2002), citing White v Stump, 266 U.S. 310, 313 (Supreme Court, 1924).

    The Ninth Circuit in Barclay vs Boskoski, without going into much detail, gave a hat tip in passing to Stump above and its “snapshot rule.”

    So, everything points in the same direction and lands at the same place. Exemptions are decided at the time of filing, and not the time of the (much) earlier lien attaching. This is consistent with the holdings of the 9th Circuit in Chiu, the Supreme Court in White v Stump, and the Supreme Court in Owen, which got there using different rationale and analysis.

    All in all, good news for debtors!

    sb1099 new california exemptions good news

    SB1099: New 2023 California Bankruptcy Exemptions Increase

    SB1099: New California Bankruptcy Exemptions Increase for 2023 | 5 Major Wins

    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.

    Note that SB 1099 and the 2023 California exemptions are different from the 2021 increase in the California homestead exemption which is tied to Los Angeles County median home prices. Last year’s homestead exemption boost strictly involved homes. In contrast, the 2023 exemption hikes for California improves protections for homes, cars, savings, support, and accrued leave and wages.

    Caution: as the new law has been in effect for just a few days, it’s likely that creditors and trustees will challenge key portions of it in court. As such, reliance on it and its changes should be done with caution until it’s established with some history and caselaw.

    While the changes in the new California exemptions of SB 1099 are many and wide-ranging, below are some key highlights.

    Home equity appreciation now goes to debtor, not the estate

    The provision

    A key provision of the new California exemptions law is that postpetition appreciation in the home equity of debtors cannot be taken to repay debts. Section 2 of the SB 1099 says:

    [I]n a case where the debtor’s equity in a residence is less than or equal to the amount of the debtor’s allowed homestead exemption as of the date the bankruptcy petition is filed, any appreciation in the value of the debtor’s interest in the property during the pendency of the case is exempt.

    This has the possibility to addressing the horrible, terrible, no-good decision of In re Jacobson, 676 F.3d 1193 (9th Cir, 2012) which provided the perverse result that debtors had a contingent homestead exemption.

    New California exemptions provide more protection for home and appreciation
    New California exemptions provide more protection for homes and their appreciation

    There, the Ninth Circuit ruled, “That right was contingent on their reinvesting the proceeds in a new homestead within six months of receipt. Cal.Civ.Proc.Code § 704.720(b). The Jacobsons did not abide by that condition and thus forfeited the exemption.” Jacobson at 1199.

    Now, with SB1099 becoming law, regardless which way the housing market goes after homeowners file bankruptcy, appreciation in their house is theirs, and not that of the trustee who previously could take it to pay their debts. However, there is a countering argument that the legislature here says exemptions are not fixed on the filing date, which agrees with Jacobson, and thus, perhaps the case and its ruling are still valid. We’ll have to see how that plays out in the courts.

    November 2022 update: Did the Ninth Circuit just chip into Jacobson, in a gradual erosion towards the ruling’s demise?

    A Note on Preemption and SB1099

    Section 541(a)(6) says that the estate is entitled to postpetition appreciation. The Ninth Circuit BAP has held that to be the case, even if there is no equity on the date of filing. In re Viet Vu, 245 BR 644, 649 (9th Cir BAP, 2000). Creditors can challenge the new state law of SB1099 (or at least this portion of it) as being preempted by federal law, and even 9th Circuit authority on the point. It remains to be seen what courts would do.

    Also, 11 USC 521(a)(2) says that a debtor must perform his or her stated intention about the collateral and secured debt with the filed petition. The options in the federal statute are: reaffirm, redeem, or surrender. Lenders can assert that state law SB1099 is preempted by federal law of Section 521. One counter to this is that, by and large, debtors in California have not been reaffirming mortgages, which are also secured debts that fall under 521. Perhaps treating vehicles the same way, pursuant to California statute, will be similarly allowed.

    Ride-through for Cars is Back in California

    Bankruptcy ride-through is where debtors can have their car loan “ride through” their bankruptcy without having to sign a new contact. In 2005, the bankruptcy reform known as BAPCPA required debtors in Chapter 7 bankruptcy to sign reaffirmation agreements if their lender provided one. This meant that the debtor owed the car loan, even if they lost the car to repossession after bankruptcy. With SB 1099, the debtor doesn’t need to sign the reaffirmation agreement, and the car loan can “ride-through” the bankruptcy case. Ridethrough was the norm before BAPCPA, and now in California, it has returned. The ride-through policy protects debtors from being liable for a big debt if they eventually default on the car loan.

    The “ride-through” bankruptcy part from the new CA law helps debtors. In short, no longer is the person in bankruptcy gambling that they won’t suffer some future hardship and lose the car, and still be stuck post-bankruptcy with thousands of dollars in a car loan they can’t afford. Ride-through in bankruptcy for cars is back in California.

    Car Exemption is Increased to $7,500

    The new SB1099 law also increases the car exemption amount to $7500, regardless of which exemption scheme is chosen. The California exemptions have two tracks: in the 703 and 704 sections of the California Code of Civil Procedure. Each section previously has a different amount for protecting equity in a vehicle. Now, regardless which scheme debtors choose, they can protect $7,500 of equity. This is crucially important in this era of record prices for used cars.

    Sick leave & family leave time protected up to $7500

    Family leave, sick leave, and vacation credits are now exempted up to $7,500, as these terms are defined in Section 200 of the Labor Code.

    Alimony and support

    Pre-existing law included an alternative exemption for the debtor’s right to receive alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor. This new California exemption adds a general exemption matching the existing alternative exemption.

    And there are more.

    New California Exemptions of SB1099 help debtors … a lot.

    While the list goes on and on, these are the key provisions. It amends Section 2983.3 of the Civil Code, Sections 703.140, 704.010, 704.050, and 704.113 of, and to add Section 704.111 to, the Code of Civil Procedure, and amends Section 22329 of the Financial Code, which relates to bankruptcy. The bottom line is the newly-enacted SB 1099 California exemptions protect homeowners, car owners, people receiving support, and sick pay. It’s a win for Californians, and those who lose out are the credit card companies. Rejoice, California!

    California eviction moratorium

    California Eviction Moratorium Ends, L.A. Renters Still Protected

    California Eviction Moratorium Ends, Renters Have Protections

    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.

    How We Got Here: September 30 Deadline

    Bill Signed

    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.

    Legislature on Break

    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.

    What Renters Can Do When California Eviction Moratorium Ends

    Los Angeles County Eviction Moratorium

    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.

    City of Los Angeles Moratorium on Evictions

    Also, there’s anLA eviction moratorium protecting renters in the City of Los Angeles until August 1, 2022.

    Court Protections for Some California Renters

    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.

    Bankruptcy Can Protect Renters in Some Cases

    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.

    cdcbaa logo

    cdcbaa Moderator Hale Antico Hosts Chapter 13 Trustee Panel

    cdcbaa Moderator Hale Antico Hosts Panel for Chapter 13 Trustees

    Program focuses on Variances, Particularly in the Age of Covid

    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.

    chapter 13 antico
    Chapter 13 Trustees’ Counsel Share A Lighter Moment with cdcbaa President Attorney Antico

    Hale Andrew Antico has been keeping busy being a cdcbaa moderator or host of the bankruptcy association programs. On 9/18/2021, cdcbaa President Hale Andrew Antico will moderate a panel with attorneys for Los Angeles bankruptcy Chapter 13 trustees. The two-hour talk will focus on policy changes during the COVID-19 pandemic. Further, the focus will be ontrustee variances between the offices. This will help bankruptcy attorneys know how to best work with each respective office.

    The cdcbaa is the largest local association of bankruptcy attorneys representing debtors in the nation. Mr. Antico is Chair of the Chapter 13 Committee for the cdcbaa.

    Chapter 13 Trustees and cdcbaa Coordination

    In March 2020, the coronavirus pandemic started causing quarantines and lockdowns. Many people in Chapter 13 bankruptcies couldn’t continue making their payments. This caused a lot of concern. This caused the Chapter 13 trustees to have to adjust their policies. The trustees’ offices started developing policies about suspending payments, or keeping tax refunds. That’s the good news.

    The challenge came from each trustee’s office doing things differently. The policies were difficult to track. So, one benefit of a free-ranging panel discussion is to learn which office expects what. Consequently, This will allow attorneys to better anticipate what’s needed or expected. Also, it will make the trustee’s offices operate more efficiently.

    During the two years as president of the group of Los Angeles bankruptcy attorneys, Hale Antico has hosted over a dozen webinars. These information sessions have featured prominent bankruptcy lawyers, trustees, and judges. As cdcbaa moderator, Mr. Antico also takes questions from the group’s members, and tries to stir helpful discussion.

    If you’re not a member of cdcbaa, you can buy tickets for Saturday’s program from the lawyers’ association website.

    cdcbaa president's message fall 2021

    President of CDCBAA’s Message from Hale Andrew Antico for Fall 2021

    CDCBAA President’s Message for Fall 2021

    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.

    Membership Total Increases

    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.

    2021 Central District of California bankruptcy filings statistics

    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.

    Changing Legal Landscape

    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.

    Educational cdcbaa MCLE Programs

    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.

    Calvin Ashland Awards Dinner And Honoring Chief Judge Maureen Tighe

    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.

    The Tremendous Board of Directors

    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.

    Closing Statement: A Strong Organization Poised for Growth and Success

    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 almost 20 years.

    eviction moratorium california

    Eviction Moratorium 2021, California, and Supreme Court

    Eviction Moratorium 2021, the Supreme Court, and California

    Supreme Court Rules on Eviction Moratorium

    Sept 30 Update: 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.

    What about the Eviction Ban and California?

    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

    Bankruptcy and Evictions

    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.

    fresh start through bankruptcy act of 2021 bankruptcy for student loans

    Fresh Start Through Bankruptcy Act of 2021: Student Loan Reform

    Fresh Start Through Bankruptcy Act of 2021: Bankruptcy for Student Loans

    Student Loan forgiveness may be an option soon in bankruptcy

    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.

    Bill Summary

    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.

    Deeper Dive into FSTBA

    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.

    Sworn in President Hale Antico

    Hale Andrew Andrew To Lead CDCBAA, Los Angeles Bankruptcy Lawyers

    Hale Andrew Andrew To Lead CDCBAA, Los Angeles Bankruptcy Lawyers

    Los Angeles bankruptcy attorney Hale Andrew Antico was named president of one of the nation’s largest groups of bankruptcy lawyers in late 2019. 2021 Update: Attorney Antico was honored to be chosen by some of the top attorneys in Los Angeles to lead this prestigious bankruptcy lawyers’ association for a second term.

    The CDCBAA, a group of Southern California bankruptcy attorneys, elevated and swore in Attorney Antico to lead the group at its annual Calvin Ashland Awards Dinner. It’s an honor to be chosen to lead such a talented and dedicated collection of bankruptcy professionals.

    Below is Hale Antico’s first president’s message for the CDCBAA‘s January 2020 newsletter.


    President’s Message

    Happy new year, and allow me the word play of wishing you great “2020 vision.” As incoming President of the CDCBAA, it’s easy to see an organization that is vibrant, successful, and thriving.

    This success is due, in large part, to past presidents, including my immediate predecessor, Roksana Moradi-Brovia. As her Vice-President the past two years, I was privileged to see up-close how much Roksana cares about the CDCBAA as evidenced by her contagious passion, enthusiasm, and tireless efforts on behalf of the organization. Roksana will remain on the CDCBAA board of directors, and continue helping provide the excellent programs to which we’ve grown accustomed.

    Looking Back

    With some recent hindsight, I look back at the success in November of the Calvin Ashland Award Dinner. The CDCBAA Trustee of the Year in 2019 was Howard Ehrenberg. Howard was introduced by a wonderful speech from Peter Anderson, the United States Trustee for Region 16. Howard himself gave an amusing but insightful address, where he highlighted the time-consuming, but often-fruitless search for assets in many offbeat types of cases which Chapter 7 trustees have the duty to perform. Our bankruptcy system relies on a balance of judges, trustees, and attorneys, each important for its smooth operation. Howard’s sense of professional courtesy, compassion, and fairness make him a key member of our community.

    The Present

    Looking around at the present, we see a bankruptcy landscape where filings remain down overall (28,861 new chapter 7 cases filed in 2019, just above the year prior), continuing a decade-long trend since the Great Recession. The CDCBAA is a valuable community of information-sharing, knowledge, and learning. Members can stay informed with important case decisions, news that affects consumer lawyers (both nationally and locally), and dive deeper in lesser-known areas of our specialty. The slowdown in filings creates an opportunity to invest time in the CDCBAA and to share knowledge with and learn from the community.

    Moving Forward

    Peering ahead into the future, 2020 is sure to be an exciting year. We are about to kick off the year with the always-popular Ninth Circuit Review of the prior year’s bankruptcy cases, and the James T. King Symposium coming up this summer, with other valuable programs in between. Later this year, we’ll honor a Judge of the Year, and I’m excited to see who this will be. But mostly, I look forward to the CDCBAA keeping a sharp focus on strengthening the bonds between the debtor bar and the judges and trustees, in elevating the practice of bankruptcy law, and keeping our goal of benefiting the consumer debtor who needs our help, truth, and compassion.

    Hale Andrew Antico is President of the CDCBAA, and has practiced bankruptcy law in Palmdale and Santa Clarita for over 15 years.