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A party in a bankruptcy matter has the right to file an appeal if they believe the court’s order demonstrates an error in judgment. It is critical for a party seeking an appeal to comply with the proper procedure, though otherwise, their arguments may be disregarded regardless of whether they have merit. This was demonstrated in a recent opinion issued by a California court, in a matter in which the court affirmed the dismissal of the debtor’s bankruptcy case, in part, due to his failure to abide by the procedural rules. If you are interested in seeking debt relief via bankruptcy, it is smart to meet with a seasoned California bankruptcy lawyer to discuss your rights.

The History of the Case

It is reported that the debtor filed a voluntary petition for Chapter 13 bankruptcy in January 2019. A Chapter 13 trustee was appointed in his case, and two financial institutions were named as creditors. Two years later, the trustee filed a motion to dismiss the debtor’s bankruptcy case. The creditors filed a joint reply, and the debtor filed a response in opposition to the motion. Prior to the hearing on the matter, the court issued a tentative ruling granting the motion and advising the parties that their appearances were required at the hearing. Allegedly, however, the debtor failed to appear. The court granted the motion, dismissing the debtor’s case. The debtor then appealed.

Consequences of Failing to Comply with the Rules of Bankruptcy Procedure

On appeal, the court affirmed the bankruptcy court ruling due to the debtor’s failure to provide an adequate record. The court explained that the Federal Rules of Bankruptcy Procedure (Bankruptcy Rules) dictate the procedure parties must follow on appeal from an order, decree, or judgment of a bankruptcy court or in a United States district court. Continue reading

Yesterday, a local Sacramento man received a 17 year sentence for committing Bankruptcy Fraud after filing for Chapter 7. Steven Zinnel was convicted last July of hiding assets during his bankruptcy in an effort to avoid paying his wife significant support during their divorce.

Zinnell and his wife terminated their relationship in 1999 and engaged in a bitter divorce. Mr. Zinnell later filed his bankruptcy petition on July 20, 2005. He hid the assets by placing them in other individual’s names. Evidently, Mr. Zinnel concealed assets and income in order to avoid having to pay his wife spousal and child support. As the divorce intensified between the parties, Zinnel asked FBI to investigate his wife. Upon conducting their investigation, FBI agents uncovered multiple bankruptcy crimes committed by Zinnel and his attorney, Derian Edison. FBI agents uncovered an elaborate money laundering scheme whereby ZInnel funneled concealed assets back to his name by using his attorney’s trust account after receiving the bankruptcy discharge.

Upon his conviction, The Federal Court imposed a $500,000 fine on Zinnel and sentenced him to almost 18 years in federal prison. He was also ordered to hand over almost $3 Million in corporate assets to the US government.

People residing in the Sacramento metropolitan area must make many decisions when deciding to file Chapter 7 or Chapter 13 bankruptcy. I am often contacted by individuals who have already made his or her filing but now needs an attorney to review the case in order to correct the mistakes that have been made in the case. I will offer some suggestions to take into consideration for those who have considered filing for bankruptcy.

Using a bankruptcy “mill.”

In an effort to increase volume and reduce fees many local bankruptcy firms have established a “mill” approach to serve the demand the market has seen over the last few years. Because bankruptcy law involves significant paperwork firms are able to batch cases together and file them concurrently. While convenient for the attorney, this process does not serve the client well. These firms become overly burdened and often lose sight over the individual needs of their customers. The clients are batched in with other clients who are in a similar financial position and led through the process as if they were cattle. This mass production approach to bankruptcy reduces the potential benefits of the bankruptcy code for the individual client.

Ayer, la Asamblea Estatal de California bloqueo legislación propuesta por el Senado que proteger a los propietarios contra la exclusion propietario mientras persiguiendo, al mismo tiempo, una modificación de préstamo. La legislación fue apoyada fuertemente por los grupos de interés de los consumidores y la oposición de la industria bancaria de California y los intereses empresariales.

La Asamblea rechazó SB1275 hacia el final de su sesión diaria. Si la legislación fuera aprobada por la Asamblea y firmado por el gobernador Schwarzenegger, el proyecto de ley habría exigido prestamistas institucionales a considerar una modificación de préstamo a todos los propietarios en dificultades antes de tomar la decisión de embargar la propiedad. SB1275 difiere de la legislación federal, ya que crea una causa de acción contra el prestamista, si no tienen en cuenta una modificación del préstamo antes de la decisión de excluir. En este punto la legislación federal requiere que un banco que participa en Plan Hipotecario de Obama que se abstenga de Protección contra la exclusión propietario de una casa que está tratando de negociar una modificación de préstamo. Por desgracia, estas normas son voluntarias y no tienen ramificaciones si el banco decide ejecutar la hipoteca.

Los datos estadísticos demuestran que el 10% de los propietarios de California son de 60 o más días atrasados en sus pagos hipotecarios. Este número es casi el 4% más alto que los datos recogidos en todo el país. Más de un tercio de los titulares de la hipoteca de California deben más en sus hogares que el valor de mercado de la propia casa.

Ayer, el New York Times señaló que la Legislatura Estatal de California está considerando legislación que busca proteger a los propietarios que resulten en ejecuciones hipotecarias contra las sentencias deficiencia. Una deficiencia es la diferencia entre lo que el prestamista recibe en la venta de ejecución hipotecaria sobre la propiedad y el saldo pendiente de la hipoteca. Por ejemplo, si el prestatario tiene una hipoteca de $300.000 en su residencia y va a dejar de pagar por el cual el prestamista recupera $250.000 dólares en la venta de ejecución hipotecaria una deficiencia de $50.000 existe. En muchos estados un prestamista puede presentar una demanda contra el prestatario y tratar de recuperar esa diferencia. Si tiene éxito, el prestamista obtiene lo que se llama una sentencia en rebeldía.

La ley de California protege a los residentes de Sacramento contra las sentencias deficiencia en su primer hecho de la confianza. Esto significa que si usted sólo tiene una primera hipoteca entonces usted puede simplemente caminar fuera de su propiedad y usted no necesita preocuparse por la responsabilidad personal sobre la diferencia entre lo que debe por la propiedad y lo que el banco se recupera en la venta de ejecución hipotecaria. Sin embargo, si han refinanciado su propiedad para obtener una mejor tasa de interés o sacar un segundo préstamo contra la propiedad o la propiedad en dificultades es su segundo hogar, estas protecciones no se aplican

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