Law Offices of Nicholas Gebelt

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In a recent issue of the L.A. Times, Liz Weston compared bankruptcy and debt settlement as ways to deal with overwhelming debt.  Her column was good, but given the limited space she had, it was a bit brief.  In this post I will expand on her discussion.   I.  Debt Settlement   The idea behind debt settlement is pretty simple:  You ask the creditor to accept less than you owe in full satisfaction of the debt. …
Suppose you’re driving home from a New Year’s Eve celebration.  At the party you had one too many glasses of Krug Champagne.  Suddenly a light pole leaps in front of you and you hit it.  You’re badly injured.  You get fine treatment at the hospital, and later receive a bill for $100,000 for the care.  You can’t pay it, so you file for bankruptcy protection.  Is the medical debt dischargeable? Notice that the party who…
For those of you who have been living in a cave without access to any news of the day, I would bring you up to speed on the ever expanding sex abuse/sexual harassment scandal that implicates many famous Hollywood types, politicians, religious leaders, big business execs, . . . , and the list just keeps on growing; but if you’re still living in your cave, you probably won’t read this post. For those of you…
I have written several times about discharging income tax debt in bankruptcy.  Some time ago I wrote a post that dealt with the question of whether a return filed after a substitute for return is a return for bankruptcy discharge purposes.  At the time, I reported that the question hadn’t been addressed by the Ninth Circuit Court of Appeals.  That statement is no longer correct.   Martin Smith v. IRS   I watched the…
In today’s LA Times, Sean Pyles wrote a nice summary of the problem of zombie debt. He began with the observation that when the statute of limitations has passed on debt collection actions, creditors are estopped from suing you to collect.  However, I suspect that in the interest of saving columnar space, he elided over some of the details.  One of my previous posts fills in the lacuna: According to Cal. Civ. Proc. Code §
I have written several times about discharging income tax debt in bankruptcy.  My most recent post on this topic dealt with the question of whether a return filed after a substitute for return is a return for bankruptcy discharge purposes.  I reported that the question hasn’t been addressed by the Ninth Circuit Court of Appeals.  That is about to change. In a society with a government class and a nongovernment class, the government class…
I have written several times about exempting assets in bankruptcy.  The gist is that in a Chapter 7 bankruptcy, the debtor gets to keep all assets that are exempt using the appropriate exemption table, but the Chapter 7 Trustee assigned to the case is empowered to seize and liquidate the nonexempt assets for the benefit of the debtor’s creditors.  And in other chapters the value of the nonexempt assets is one of the factors…
Some time ago I wrote in great detail about a split among the circuits over whether the Bankruptcy Code preempts the Fair Debt Collection Practices Act (“FDCPA”). The gist of the split is over whether a debtor can simultaneously sue a creditor under both the Bankruptcy Code and the FDCPA for violating either the automatic stay of 11 U.S.C. § 362(a) or the discharge injunction of 11 U.S.C. § 524(a). In my previous…
Some time ago I wrote in great detail about personal Chapter 11 bankruptcy.  In that post I discussed the application of one of the complexities of Chapter 11 bankruptcy to individual (as opposed to business) cases.  That complexity is the absolute priority rule.  At the time of the post, we had a patchwork of inconsistent case law on the topic, making the success of a personal Chapter 11 case dependent, in part, on the…
I’ve written before about IRS scams involving a call or robocall supposedly from the tax agency demanding immediate payment and threatening arrest if the payment isn’t made.  However, I’m still getting calls from anxious clients rattled by these calls.  Let me repeat, the IRS will never call you to demand immediate payment over the phone. Here’s what the IRS has to say about this scam: The IRS will never: Call to demand immediate payment…