Los Angeles Bankruptcy Law Monitor : Los Angeles Bankruptcy Lawyer & Attorney : Christine Wilton Law Firm : Southern California Chapter 13 & Chapter 7 Bankruptcy, Foreclosure

I remember watching the Wizard of Oz movie every Thanksgiving Day as a child growing up here in the southland.  After sticking my fingers into the black olives and then eating them from my fingertips and stuffing my belly fully of all the trimmings that make up every traditional holiday meal, the family would then gather around the television and watch the Wizard of Oz. I always looked forward to eating my piece of pumpkin pie with whipped cream while watching this classic film.

Now, as a bankruptcy lawyer, I find myself breaking every illusion I can find about money, the banking system, wall street and the government. Last week, I was pointed to the Secrets of the Wizard of Oz and Our Current Economic Crisis. This article breaks down the symbolism presented in the original book and the movie and explains the entire illusion and how all the systems play a roll in keeping the American people in slavery (Debt).

I see a sequel to this: Dorothy (a baby boomer) is dying and her children take up her cause and become the hero protagonists that lead the munchkins (American public) out of debt and liberate the masses from the wicked witches (banks and wall street) through bankruptcy. In order to do this, they must break the illusion that bankruptcy is the worst thing for their credit scores because the masses still believe FICO is really important.  They must learn that the only thing their credit score tells them is how well they manage DEBT (how ridiculous is this illusion now?).  If there is no individual debt then what importance does their credit score hold?

One of Dorothy's children is a bankruptcy lawyer in southern California (I volunteer to be a hero) who, through her blog, continues to break down the walls and expose the lies being told about bankruptcy and one client at a time, she leads the people to FREEDOM (financially speaking). The moral of the story is that the banks won't win in the end and the monetary system as we know will implode if the Wizard does not retire and if we don't kill the Wicked Witch of the East (again).

Bankruptcy is a valuable tool that dates back to the Bible. Financial freedom from debts permanently is the level of transformation that is needed here. If the American people take back Oz by refusing to do business with them (MasterCard and Visa) then they will "melt."

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 Back in July, 2010 I reported on the 9th circuit case of Mwangi v. Wells Fargo Bank, N.A., "Wells Fargo Won't Stop Freezing Bank Accounts." Our local group of attorneys here in the Central District of California have it on good word from sources inside Wells Fargo's bankruptcy department that the bank continues to freeze accounts while the litigation case is reviewed by the bankruptcy court in Nevada.  The Mwangi case has been remanded back to the bankruptcy court to determine whether Wells Fargo's continuation of the administrative freeze and retention of the account funds claimed exempt, in the absence of instructions from the trustee, was reasonable in light of the debtor's demand that the subject account funds be released for their use.

This is a case to watch as it affects all debtors filing bankruptcy, clients of Wells Fargo Bank, N.A. and the Automatic Stay under 11 U.S.C. § 362(a).  On January 21, 2011 Christopher P. Burke, Esq. and Scott C. Borison, Esq. attorneys for Eric Mwangi and Pauline Mwicharo [Plaintiffs] filed case no. 11-01022-bam in U.S. Bankruptcy Court for the District Court of Nevada this Adversary Class Action Proceeding.  

The allegation from the complaint alleges that Wells Fargo Bank acted in Willful Violation of 11 U.S.C. §362(a)(3).  If the court determines Wells Fargo's conduct was a willful violation of the stay under §362(a), then the bankruptcy court will need to determine what, if any, damages the debtors are entitled to under §362(k)(1).  We will keep you posted on the progress of this pending case and the outcome.  In the meantime, don't bank where you owe money.

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Today is all about love. As I stroll through my local grocers, I am swimming in a sea of red; red roses, balloons and candies all remind me that it's Love Day.  So, why is a bankruptcy lawyer writing about love?  Well, I'm a compassionate soul and I believe that Money is a Matter of the Heart.  So much so, that I wrote a white paper on this very subject apropriately entitled, Money Is A Matter Of The Heart.

As a practicing attorney in consumer bankruptcy, I hear your stories and cries for help. I hear, "I've done everything right," "I always pay my bills," "I can't believe I'm in this mess," "I don't want to file for bankruptcy."  You're not alone and you're not entirely to blame for your situation. The question is not, "How did we get here?," but rather, "What do we do with this situation we're in?"

Too often people spend down savings, borrow against a 401k or cash in retirement plans to support a lifestyle that can no longer be afforded. What is important to remember is that the moment your income drops, you absolutely must preserve your cash. If you don't, you'll end up filing bankruptcy broke. The truth is, you can keep the trustee from taking retirement savings and other savings accounts and still file bankruptcy. Talk to your local bankruptcy lawyer today if you've experienced a significant loss in income. I call this Self Love.

The reason why so many people delay the inevitable bankruptcy is the moral and emotional stigma attached. One has failed if they must file bankruptcy is such a misnomer. While bankruptcy is not the right choice for everyone, it is a powerful tool to provide a fresh start to those facing a complete inability to pay their debts, or those looking to restructure their debts and stop foreclosure on their home.

It's time to stop the vicious cycle and feelings of "moral obligation" to pay your debts.  If you cannot afford it, then you must file bankruptcy. Remember that indecision is also a decision and you must take action to resolve your current situation. Money is a Matter of the Heart  will take you on a journey from your head to your heart and bring your wallet with you. I hope you enjoy reading it.  Happy Valentine's Day.

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 Have you heard of Judicial Estoppel?  Well, you need to if someone owes you money and you're thinking of suing while contemplating bankruptcy. The doctrine of Judicial Estoppel generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase. What this means is that what you disclose on your bankruptcy papers become public record in a legal proceeding; a judicial record.  So, if you're owed money or have a potential creditor harassment suit and you fail to list these potential claims on your bankruptcy papers and later file suit, that subsequent lawsuit can be dismissed on a judicial estoppel theory.

A recent 6th Circuit case, White v. Wyndham Vacation Ownership, 617 F.3d 72 (6th Cir. August, 2010) illustrates this point.  The question presented before the court was whether the failure of the debtor to disclose in her schedules, a sexual harassment claim she had was grounds to dismiss the harassment case on the basis of judicial estoppel.  The court held yes. In this case, the Debtor filed bankruptcy under Chapter 13 but did not list a sexual harassment claim she had against the defendants in this district court action. About a week after the plan confirmation hearing, she file a lawsuit in district court seeking more than $1 million in damages. A month later, the defendants filed a motion to dismiss the harassment case on the basis of judicial estoppel. The Debtor later filed an amendment to her schedules disclosing the case, but not the amount. 

The court cited two  circumstances in which a debtor's failure to disclose might be deemed inadvertent or mistake as:

1.  Where Debtor lacks knowledge of the factual basis of the undisclosed claims; and

2.  Where the debtor has no motive for concealment and an absence of 'bad faith.'

The reasoning behind this important decision is that your creditors should be entitled to any proceeds or the value thereof in your bankruptcy case.  So, while you will likely be able to keep your stuff and claims too, it's wise to disclose potential claims to preserve your right to sue later. Remeber that you sign your bankruptcy papers under penalty of perjury that you have fully disclosed all assets, claims, debts and liabilities, so there's no having it both ways in bankruptcy.

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