October 2011 Archives

North Bay Tenant Accused Of Evading Rent For Years - Santa Rosa Landlords Beware!

October 28, 2011, by Law Offices of James V. Sansone

Dark-Evil-41164.jpgAs reported by CBS 5,

As the California rental market heats up, landlords need to do their homework.

Connie Cook bought a Sonoma County property eleven years ago, hoping to spend her retirement years there. Her plan was to rent out the converted barn to help pay the mortgage.

That plan was working well, that is until a single mother moved in with her teenage son in 2009.

Soon afterward, Gwen Smith, the new tenant, started complaining that a gas leak and unhealthy water were making the apartment uninhabitable.

Then, Smith stopped paying rent. But when Cook tried to evict her, Smith, who has a law degree, fought back in court by filing motion after motion - all while paying no rent.

A judge eventually ruled that Smith's conduct was "malicious," and her numerous court filings amounted to "tactical delay." He awarded Cook $49,000. But, unfortunately for Cook, Smith appealed the judgment, and that case is still pending.

It turns out this wasn't the first time Smith had stopped paying her rent.

As Connie Cook's finances dwindled, she turned to her local legal aid office, which told her they knew Gwen Smith. They called her "notorious."

Sebastopol homeowner Barbara Wilt rented part of her house to Smith in 2008.

A few weeks after moving in, Smith allegedly changed the locks, and began complaining that the apartment was uninhabitable.

But, when Wilt tried to enter the house to fix the alleged problems, she was met with a nasty surprise: the police.

Smith had called the police claiming someone was trying to break in. In one encounter, Smith even pepper sprayed Wilt.

"I just felt this liquid on my face, started swelling up, couldn't see, it was horrible," said Wilt.

When Wilt took Smith to court, Smith countersued, claiming she and her son suffered "property damage, illness, infections, and emotional trauma" - all from living in Wilt's "hellish basement."

Wilt eventually won a default judgment for more than $42,000. But Smith appealed that judgment as well.

A month ago, after three years of legal battles and a trip to the Supreme Court of California, the Supreme Court ruled in Wilt's favor, upholding the judgment against Smith.

And that's just two cases. CBS 5 found a total of eight judgments in eviction proceedings against Smith in four states.

Smith's law degree helped her work the system, but experts say California's tenant protection laws worked to her advantage.

According to attorney Jim Sansone, tenants can withhold rent while a case is pending. Faced with motion after motion, most landlords, he said, simply give up.

"I have a lot of landlords who come to me and say, you know what, I am going to figure out what the cost of defense is, and I am going to offer that to the tenant and waive all my rights," said Sansone.

CBS 5 offered Smith a chance to share her side of the story. After two weeks we tracked her down to the small town of Forestville.

Smith wouldn't speak with us, and her most recent landlord didn't want his name used. But, he did tell CBS 5 that Smith stayed for three months without paying rent.

The day after our encounter with Smith, she moved out of the Forestville home. Her whereabouts now are unknown.

Meanwhile, Barbara Wilt is still waiting to collect on her judgment.

"I still am just so flabbergasted and shocked and so disappointed and disillusioned with our justice system," Wilt said.

Connie Cook is still waiting for her money too. But, even if she gets it, it is already too late. Living on Social Security and with no rental income, Cook fell behind on her mortgage payments and lost her farmhouse to foreclosure.

"It breaks my heart, just breaks my heart," Cook said.

Continue reading "North Bay Tenant Accused Of Evading Rent For Years - Santa Rosa Landlords Beware!" »

Credit Card Delinquencies Continue to Drop - Santa Rosa Bankruptcy

October 27, 2011, by Law Offices of James V. Sansone

First-Savings-Credit-Card.jpgCredit card delinquencies have reached a six-year low, according to the latest Credit Card Index from Fitch Ratings according to Consumer Bankruptcy News. The report also shows credit card charge-offs ticking up for the first time in the past several months.

Credit card accounts more than 60 days past due dropped to 2.15 percent in August, marking the 19th straight month of decline from a record high of 4.5%. Accounts on which consumers have missed one payment declined from 3.34% to 3.02%.

Credit card defaults increased from 6.33% to 6.41%. The Fitch Ratings Report said the increase was driven by two of the larger trusts--Citibank and Bank of America--posting higher losses. The report added that charge-off rates of 6% are considered normal.
Consumers repaid 21.14% of their credit card debt in August. That figure was less than the 21.76% paid in July, but was well above the index average of 16.3%.

Some may point to this as an indication that the economy is improving. I'm not convinced. Is it possible that credit card delinquencies have decreased because credit is harder to get? Can it be that credit is no longer considered an American citizen's right but a qualified privilege?

If you are suffering from an unhealthy amount of credit card debt the Law Offices of James V. Sansone can help. We are located in Santa Rosa, California and serve clients with their bankruptcy needs throughout the North Bay area of California, including Sonoma County, Mendocino County, Lake County, Santa Rosa, Napa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport and Kelseyville.

401(k) Contributions May Increase Postpetition - Santa Rosa Bankruptcy

October 25, 2011, by Law Offices of James V. Sansone

401k.jpgChapter 13 who are repaying loans from their 401(k) retirement plans when they file for bankruptcy do not necessarily need to step up their plan payments after the loans are repaid. They may be able to increase their plan contributions instead.

In this case the debtor's attempted to avoid filing for bankruptcy by taking out loans from their 401(k) plans. The payments for those loans were included in the debtors Means Test deductions. The debtors intended to increase their 401(k) contributions when the loan payments ended. The trustee objected on the basis that the amount of the loan payments needed to be added to the plan payments when the loans were paid off. The trustee did not object to the continuation of the 401(k) contributions being made prepetition, but argued that the debtors could not increase those contributions postpetiton.

In disagreeing with a holding in the 6th circuit, the Court stated, in part, "section 541(b)(7) contains no language from which this Court may infer a basis to adopt a per se rule prohibiting the debtors from increasing the amount of their postpetition contributions to their respective 401(k) plans," Judge Magdeline D. Coleman stated in In re Egan, 22 CBN, 2001 WL 3902817 (Bankr. E.D. Pa. 08/30/11). Finding that all the debtors disposable income was committed to plan payments, the court overruled the trustee's objection to confirmation.

So debtors may still be able to adjust their retirement savings to a higher amount even in a Chapter 13 Bankruptcy.

The Law Offices of James V. Sansone is located in Santa Rosa, California and serves clients with their bankruptcy needs throughout the North Bay area of California, including Sonoma County, Mendocino County, Lake County, Santa Rosa, Napa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport and Kelseyville.

Can You Lien Strip In A Chapter 20 Bankruptcy In The 9th Circuit?

October 20, 2011, by Law Offices of James V. Sansone

Underwaterhome.jpgI recently wrote a blog post entitled "No Lien Stripping in Chapter 20 Cases In The Ninth Circuit - Santa Rosa Bankruptcy". In that post, I overstated the meaning of that case when I represented the issue is now settled in the 9th circuit. As the case I was discussing, In re: Ricardo and Jenny Victorio, was a bankruptcy district court case, it is not binding on other California Bankruptcy Courts, it is only persuasive.

In fact, another bankruptcy court in the 9th circuit has come up with a different opinion. In the case of Jose Manuel Garcia and Maria Garcia, Judge Stephen Johnson held that a debtor may lien strip in a Chapter 20 bankruptcy.

Judge Johnson held that the availability of a Chapter 13 Discharge is not a predicate to lien stripping in Chapter 13. In coming to this conclusion the judge relied, at least in part, on Judge Jellen of the Oakland Division analysis of this question. Judge Jellen analyzed this question of whether a debtor in what has been called a "no discharge" chapter 13, (aka Chapter 20), can confirm a plan which modifies the rights of secured creditors using sections 506(a) and 1325(a) of the Bankruptcy Code. Judge Jellen found that the power to strip off wholly unsecured junior liens on real property is not conditioned on a debtor's right to a discharge under section 1328(f), but on the debtor's compliance with chapter 13 plan and confirmation requirements under sections 1322 and 1325.

So what is the answer to this question? Can you lien strip in a Chapter 20 Bankruptcy filing? Right now, it depends on who you ask. This question is sure to make its way up to the United States Supreme Court in time.

The Law Offices of James V. Sansone is located in Santa Rosa, California and serves clients with their bankruptcy needs throughout the North Bay area of California, including Sonoma County, Mendocino County, Lake County, Santa Rosa, Napa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport and Kelseyville.

Support Growing Among Policymakers For NACBA's Principal Paydown Plan

October 18, 2011, by Law Offices of James V. Sansone

images.jpgUnder the current state of bankruptcy law, a debtor can't cram down the mortgage on the principal residence in a Chapter 13 Bankruptcy. However, a Principal Paydown (PPP) bill may soon pass thanks to the National Association of Consumer Bankruptcy Attorneys (NACBA). Thirty-two members of the California delegation in the U.S. House of Representatives sent a "call to action" to President Obama that read in relevant part:

"One promising possibility would be a temporary reduction in the interest rates of certain homeowners who file for Chapter 13 bankruptcy, so that the entirety of their monthly payments would go to paying down their principal balances for five years. Coordination with the bankruptcy process would make these reductions more likely to succeed than other types of loan modifications, while also limiting the program to those who truly need it and avoiding the administrative failures that have plagued many other initiatives. Such a plan could be implemented for mortgages held by Fannie Mae and Freddie Mac, as we believe that such a plan would be entirely consistent with FHFA's obligation to minimize taxpayer losses in the Enterprises. This plan could also be implemented as part of the nationwide settlement currently being negotiated by a group of state attorneys general."

Continue reading "Support Growing Among Policymakers For NACBA's Principal Paydown Plan" »

Facing Cuts, a City Repeals Its Domestic Violence Law - Santa Rosa Family Law

October 13, 2011, by Law Offices of James V. Sansone

what-is-domestic-violence.jpgAccording to the New York Times, the startling vote came up at a City Council meeting in Topeka Kansas on Tuesday, provoked by a run-of-the-mill budget dispute over services that had spun out of control: decriminalize domestic violence.

No one could decide which branch of local government should be responsible for paying for prosecution of misdemeanor domestic violence cases.

City leaders had blamed the Shawnee County district attorney for handing off such cases to the city without warning. The district attorney, in turn, said he was forced to not prosecute any misdemeanors and to focus on felonies because the County Commission cut his budget. And county leaders accused the district attorney of using abused women as pawns to negotiate more money for his office.

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California Is A Community Property State, What Exactly Does That Mean? Santa Rosa Divorce

October 11, 2011, by Law Offices of James V. Sansone

index.jpgCommunity property is generally defined under current law as "all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in [California] ...," except as otherwise provided by statute.

The concept of community property includes both assets and obligations. This is of particular significance in characterizing debts incurred by the parties, both from the standpoint of third party creditors' rights, and from the standpoint of dividing debts on marital dissolution or legal separation.

Community property has special characteristics or "incidents" that distinguish it from other types of property interests. The most important incidents include the following:

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What Type of Damages Can A Santa Rosa Landlord Obtain In An Action For Unlawful Detainer?

October 6, 2011, by Law Offices of James V. Sansone

evicdep.jpgI consult with many landlords who are surprised to learn that they can't obtain a judgment against a tenant for property damage to the subject rental unit. This is because the statutory primary purpose for an unlawful detainer action is possession, nothing more.

In addition, but only incidentally, the landlord may obtain:

1) A declaration of the forfeiture of the lease (tenancy agreement);

2) The amount of any rent due and unpaid (together with interest), if the ground for eviction is nonpayment of rent;

3) Damages for occupancy during a holdover period (up to the date of entry of the judgment); and

4) Statutory damages, if the tenant is guilty of willfully holding over after expiration of the tenancy term.

Continue reading "What Type of Damages Can A Santa Rosa Landlord Obtain In An Action For Unlawful Detainer?" »

Drug Dealing Debtor Keeps Discharge - Santa Rosa Bankruptcy

October 4, 2011, by Law Offices of James V. Sansone

drug money.jpgA couple was arrested with possession of and trafficking in heroin and crack cocaine after receiving a Chapter 7 discharge. What is that? It is an elimination of debts as if they never existed. A "discharge," when granted by the Court, terminates all liability for repayment, all obligations, rights and duties associated with the claim.

The U.S. Trustee (UST) attempted to prove that wife and debtor Lisa Shiloh, illicitly sold drugs and profited from doing so in order to revoke her discharge. The debtor was found guilty on six counts of delivery of a controlled substance, one count of criminal conspiracy, four counts of criminal use of a communication facility, and one count of child endangerment.

The UST used evidence documents from the criminal trial that revealed the amount of drugs and the frequency of the purchases but there was no proof of the amount of money Lisa allegedly accrued from the sale of drugs up until the filing of her Chapter 7 petition.

The court said there was testimony regarding the sale of drugs but the UST did not prove that Lisa derived income from the transactions during the prepetition period. The court noted that the state needed to prove only that the debtor sold drugs, not that she earned income from doing so, which they didn't. The moral of the story, even criminals can receive a discharge.

The Law Offices of James V. Sansone is located in Santa Rosa, California and serves clients with their bankruptcy and criminal defense needs throughout the North Bay area of California, including Sonoma County, Mendocino County, Lake County, Santa Rosa, Napa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport and Kelseyville.