Law Offices of Lady Justice Bankruptcy Attorney Thu, 20 Nov 2014 20:59:41 +0000 en hourly 1 San Bernardino Council votes to file Bankruptcy Thu, 26 Jul 2012 18:00:51 +0000 admin If you haven’t already heard, San Bernardino will become the third California city to file for bankruptcy this year, after officials conceded the city might not even be able to cover payroll through the summer. Faced with a budget shortfall of $45 million and city coffers that have already been drained, the San Bernardino City Council voted on Tuesday to file for bankruptcy. Andrea Travis-Miller, the interim city manager, told Council members before the vote that the city had very few options left. “I am concerned about our ability to make payroll, not only in the next 30 days but also in the next 60 to 90 days,” Ms. Travis-Miller said. “A major restructuring of this organization is needed.” Ms. Travis-Miller said it would take 30 days before city staff would be prepared to file the paperwork in bankruptcy court. Under a California law passed this year, cities must hire a third-party mediator to negotiate with employee unions and creditors before filing for Chapter 9 bankruptcy protections. However, cities can avoid this mediation process if they instead declare a fiscal emergency, which Mayor Patrick Morris said that San Bernardino planned to do. Karol K. Denniston, a partner at the law firm Schiff Hardin who helped draft the mediation legislation, said a long and difficult bankruptcy case might follow, because the city had skipped the mediation process. With 15 percent unemployment in the city, and a foreclosure rate in San Bernardino County that remains among the highest in the state, San Bernardino has been pummeled by the recession. As a result of the current City of San Bernardino’s financial hardship, many individuals will be forced into filing for either Chapter 7 or Chapter 13 Bankruptcy.

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The Post Office Having to go Through Bankruptcy? Thu, 24 Nov 2011 04:37:55 +0000 ladyjustice The United States Postal Service that we all take for granted could be at risk of bankruptcy. With most written communication switching from letters to the Internet and more people going with UPS and Fedex the Postal Service is losing money. While the other shipping businesses are free to make any changes they deem necessary to keep their business going, the Postal Service is restricted in its options. Unlike many of the other government agencies the Postal Service doesn’t receive any tax money to keep its operations afloat. They also have to set aside health benefits for their employees well in advance of retirement and they are restricted in their ability to close down offices that are performing poorly. All of these restrictions make it even more difficult to make a profit in this horrible economy.
With all of the financial difficulties that the Postal Service is facing they have no choice but to hike up their prices yet again. On top of the standard stamp price increase, they are also raising the price of their priority mail shipping and their overnight. Priority mail prices will be going up by around 3 percent and overnight shipping will be switched to a flat rate model of 40 dollars a package. The overnight shipping is up from a sliding plan that starts at 13 dollars a package and increases depending on the weight of the package. Even with the price hike the Postal Service will only gain a little headway and could face an eventual collapse without help from the government.

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The Debt Supercommittee Close to Failing Tue, 22 Nov 2011 02:45:48 +0000 ladyjustice The debt reduction committee that was established specifically to dissolve Washington’s congressional gridlock, is on the verge of failing altogether. The committees failure makes nearly $1.2 trillion in spending cuts a likely possibility.

According to a Democratic aide working with the committee it is highly unlikely that the committee will be able to reach an agreement on the deficit savings. The aide is not permitted to discuss the case and wished to remain anonymous. In the email from the aide, it is stated that the likelihood that the committee talks can be salvaged is very poor.

The Congressional Budget Office is set to receive information allowing them to score a proposal in advance of the November 23 due date that the supercommittee is supposed to be completing a deal. Mitch Mcconnell, Republic Senate Leader, declared that “failure is not an option” for the created supercommittee panel that was thrown together in August after a heavy session of conflicted voting by Congress. The panel was thrown together after debating about raising the nation’s debt limit and the issue received a dismal 9 to 14 percent approval by congress.

Both Republicans and Democrats got on the radio on November 21 to point the finger at each other for not reaching a deal in time. The Democrats claimed that Republicans would not budge on their anti-tax agreement and Republics claimed that Democrats would not go along with their revenue raising offer that will also cut spending.


Pointing the Finger

Jon Kyl, U.S. Senator of Arizona, said that the Democrats turned down a deal that would create $250 billion in revenue by getting rid of a few tax breaks. The deal would generate all of that money while lowering the income tax rates at the same time. Kyle said that the Democrats are a group of people unwilling to cut spending unless they are raising income taxes at the same time.

John Kerry a well known Massachusetts Democrat says that Kyl’s statement just isn’t true. He exclaimed that the Democrats were willing to agree to a deal that cut $917 billion in spending without any additional revenue. The agreement went along with the August plan to raise the debt limit. The most recent Republican plan results in the highest tax cuts since the Depression.

On November 21 European stocks took another drop for the third consecutive day. The U.S. futures backed off in fear of a Congressional impasse. Both the Stoxx Europe 600 Index and the MSCI Asia Pacific Index lost 2.1 percent and 1.3 percent respectively. As the U.S. futures backed off the Treasuries advanced.

The standard and Poor’s 500 futures fell by 1.4 percent and the benchmark gauge for the American equities declined by over 3.8 percent in the past week. The equities decline was the largest loss in the past two months and French, Italian and Spanish bond yields increased over the same period of time. Fitch ratings believes that the poor economic condition of Europe creates a risk for American banks as well.

A Fade of Optimism.

The supercommittee members barely retain any hope that their efforts will result in an actual deal, but nobody wants to give up hope states Jeb Hensarling on Fox Sunday News. The reality is slowly beginning to overtake the committee’s hope.

If the committee fails to come up with an agreement soon there is 1.2 trillion dollars in spending cuts set to take place on both defense and domestic programs. The lack of a deal will provide President Barack Obama with a method for offering insurance benefits and a payroll tax cut for unemployed Americans, both of which expire at the end of 2011.




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Bankruptcy Judge is Releasing $520 million to MF Global Customers Sat, 19 Nov 2011 06:44:42 +0000 ladyjustice The judge that has been in charge of the bankruptcy of MF Global Inc. is approving, and releasing around $520 million to the trading customers within the brokering firm whose accounts were frozen since October 31 due to the bankruptcy. This means that 60 percent of the funds being awarded by the judge are going to be returned to customers in a group in their cash only bank accounts. This money is supposed to start moving to these accounts before Thanksgiving Day.

This can prove to be a difficult task due to the fact that there are over 38,000 accounts that were frozen, and these accounts all need to be verified before money can be placed within them. The judge wants to eventually reward all of the funds back to the accounts which is estimated to be close to $600 million. MF global is New York based, and is led by Jon Corzine, a former NJ governor. He also is known for being the CEO of Goldman Sachs. They made the one bet on European debt, and this was the wrong move for the company which led to their bankruptcy in October.

It is still under investigation on whether or not the company used money from private, clients accounts to float the business as their condition became worse. This is a violation of the security rules of the company, and of the law. The Chicago Mercantile Exchange are the ones in charge of transferring the money to all of the accounts. These accounts are used for trading, and this is an important aspect for the country.


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Florida Bankruptcies Down 17%, but Still No. 3 in the Nation Wed, 16 Nov 2011 21:13:34 +0000 ladyjustice This is something that is shocking. As the bankruptcies are going down, and not up, the District is still number 3 on the top of the list of all bankruptcies. Florida’s bankruptcy rate was down over 17% from the last year. This means that it is much slower than it has been, but their spot on the records is not moving. They are at a stand still.

Still, within this year alone, the Middle District of Florida had close to 57,000 bankruptcies. This is much lower than the Central California District that came in at closer to 140,000 filings. The entire U.S. Filings went down a little over 8% this year, but the total of bankruptcies were still up over 1 million. There are a few factors to why the percentage has dropped over the last year, and they include, but are not limited to: more jobs being widely available, stabilization in the economy, federal programs that are there to assist the homeowners having trouble, and banks taking more care in fixing problems before moving forward with the process.

This does not mean the recession is over, or that no one will file for bankruptcy, but it does mean that the bankruptcies filed because of recession might be behind us. Those that have debt to file for bankruptcy with have already done so, and those that are unemployed and not able to pay off the debt are waiting until they can afford to do so. A lot of the people that are filing for bankruptcy are small business owners with failed businesses. Of course, it is not getting worse, but it is also not getting any better.


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Alabama Filing for Bankruptcy, it is Painful, but Not the Last Chapter to go Through Sat, 12 Nov 2011 16:21:11 +0000 ladyjustice The same debt issues have been circulating in Alabama, and they still have not been resolved with the creditors. There is a lot of negotiating, but they are not paying their balance down. Since a lot of the government’s money is put into roads, run the courts, perform public services, and other things that help the state function, there is nothing that can be liquidated or removed from the process in order to make the money to pay the creditors that are owed. They are continuing to pay everyone that is owed, and to continue business as usual while Chapter 9 sorts out a payment plan for the state. Going through municipal bankruptcy is painful and very expensive so they wish to stay away from it as much as they can and try to get the creditors their money.

California filed for bankruptcy in 2008, and emerged from the long process only earlier this very month. The total that was spent on lawyer fees, not counting the amount that was needed to pay creditors back summed up to around $10 million in the end. The interest of the bonds that the state owns is what is holding them down when it comes to paying off their debt, and being able to get out of the debt that they have. This is because the percentage of the interest keeps increasing over time, and this is a lot for the state to keep up with. They are hoping not to have a municipal market meltdown because of the underfunded pensions, falling tax revenue, and excessive debt.

A lot of the debt came from fraud within the system that has since been taken care of, but the debt remains. Several of the county commissioners ended up in prison because of this wrong doing, but there was not much that could be done to undo what they already did. They are trying to continue public services, but the levels that are received are drastically cut in half. They are forced to cut anywhere from $40 to $100 million in their budget for these types of things throughout the state that they once did not have a problem with. Just in the past year the state laid of several hundred employees, and cut the County Sheriff’s office and limited them on what they could do, on top of other cuts and stipulations.



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The ‘Future’ of Ice Cream – Dippin’ Dots – is Filing for Bankruptcy Wed, 09 Nov 2011 01:16:49 +0000 ladyjustice Dippin’ Dots is hoping to keep off foreclosure by filing for bankruptcy protection. This is because of their debt of over $11 million in borrowed money. They filed for a Chapter 11 reorganization in order to help their company out, and by them a little more time. They are hoping to use cash collateral to continue the business and pay off the debt. This will not harm creditors, one of their biggest being the Regions Bank, they are owed around $11 million alone. This bank sued the company in February, they stated that the company allegedly defaulted on many different loans through their bank. This suit is still pending.

A 48 hour notice came through to the company stating that they intend to foreclose on the loans. This moved Dippin’ Dots to file for this bankruptcy protection. They are hoping to refinance the debt that they are owed. The company does not intend to borrow money from any other source, and they must be able to use the cash collateral in order to continue functioning as a business. It is just a difficult time in the economy right now, and many businesses are filing for bankruptcy protection because they are not able to make ends meet at this point in time. The company currently lists over $20 million in assets, and more than $12 million in their liabilities. The income is over $25 million per year and steadily growing.


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Is America Trying to Hurdle Over Student Debt? Fri, 04 Nov 2011 00:51:11 +0000 ladyjustice Since the debt ceiling is to rise, a lot of students fear that their interest rates are going to sky rocket. A lot of students that have been out of college for years now are still paying back their debt for going. The skyrocketing amount of student loan debt is one cause for concern. This is one hurdle that seems it will never be crossed over. They are calling it America’s next bubble. Student loan debt has grown over 500 percent over the past 12 years, and continues to steadily grow. The other debt from credit cards, households, mortgages, etc. have only climbed 100 percent in the same amount of time.

So what does the outstanding student loan debt look like now? We are looking at over $930 billion in student loans, and is expected to reach around $1 trillion by the time the year ends. The student loan debt is affecting the economy. A lot of students that graduate are delaying the other things in their life such as buying cars, houses, getting married, and having children because they have a lot of student loan debt to hurdle. Those that cannot pay their student loans are making the debt rise, but honestly with the economy and jobs in a downfall, who can blame them?

Student loans have become to much available for those students out there, and the risk of this is that if they do not pay it back then everyone can suffer from it. Although, with the economy at its worst, who is to say that are actually able to pay it back instead of paying for their rent or mortgage payments. People are choosing to spend their money on their other housing bills to continue living.


For more information about America’s next bubble, check out Fox News.


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What is Going on with America’s Debt? Wed, 02 Nov 2011 00:24:20 +0000 ladyjustice By Federal law, Congress has to authorize borrowing any money for the government that might be needed in order to pay for programs or laws that Congress passes. The debt limit or ceiling has been bumped up a few times because of this, making the ceiling much higher. This was one of the least popular things that the Congress wanted to be a part of. The question has been raised a thousand times, but the debt ceiling was a battleground and something had to be done.

They continued to push the debt ceiling away, and then the country had to default on their debt. This left America stunned and rather scared at the same time. This has not happened, and now there is no plan to get the country out of debt. They want to try a second run of deficit reduction, and get as much as they can out of it in order to get out of the debt. America’s credit is falling, and this means other countries are less likely to loan money out since America does not have anything to back their finances up with.

Cuts have been made in military spending, Medicaid and Medicare, education, and transportation. They want to save as much money as possible when it comes to the country. This only cuts spending without raising revenues. This could be a problem if they are trying to get out of debt. Cutting this type of spending could initially slow down any type of recovery that America once had. There is not going to be another debate about the debt limit and the recession until 2013, what do you think the country is going to do until then?


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Congress and Obama Reach a Debt Deal Wed, 26 Oct 2011 23:52:12 +0000 ladyjustice President Barack Obama has announced the agreement made with the Republican congressional leaders about the compromise made between the two to avoid the nation’s first financial default. This new deal is going to cut over $2 trillion from the federal spending over a decade. Having this type of default on the nation would have had one of the most devastating effects on our economy.

They are giving lawmakers the time to review the package and the deal that they have came up with. Both parties have been on board with this agreement in order to make the country a better place overall. All votes are expected to be in through Congress on Monday. All the votes are going to be round up. They do not think this is the greatest deal in the world, but they think that it will help the country out in the end. This agreement means that there is going to be the lowest amount of domestic spending that there was since Dwight Eisenhower was in office.

It seems that the two sides disagree on almost everything that is brought up. In the end however, a lot of people should agree on what we made an agreement on this time. Those reasonable people should also be in agreement with this. The United States cannot take a chance when it comes to defaulting on the debt, this could risk the United States financial collapse and could mean a world-wide depression for everyone involved.

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