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Corona California Legal Blog

Why are Chapter 7 bankruptcy filings so low?

Even though the process helps individuals re-establish their financial stability, many people in California still view bankruptcy in a negative light. Perhaps because of this viewpoint, recent reports that bankruptcy filings recently hit a 10-year low might seem like good news. While some people might be avoiding Chapter 13 or Chapter 7 bankruptcy because they are handling their debts well, many others might be facing obstacles that prevent them from seeking debt relief.

The Great Recession saw bankruptcy filings spike to significantly high rates. In Sept. 2010, 1.53 million people filed for bankruptcy. During Sept. 2018, less than 770,000 people sought bankruptcy protection. While a reduction in filings might be expected as the recession falls further back in history, this is not the only explanation for the sharp drop.

Popular cupcake chain files for Chapter 11 bankruptcy

Building a business from the ground up is no small feat, and many California business owners face financial ups and downs along the way. Recovering from those downs can be difficult though, especially for businesses that have expanded to include franchises that span multiple states. In some of these cases, a Chapter 11 bankruptcy filing might be the most appropriate option.

Gigi's Cupcakes is a popular chain of cupcake stores that was originally founded by Gina Butler, a former singer-songwriter. After she realized her dreams of making it big in the music industry was less than realistic, Butler turned to cupcakes and never looked back. Butler later expanded her business through franchises and was bought out by a larger company, although she still runs the original location.

Motor vehicle accidents: 3 dead in head-on collision

California police believe that alcohol was more than likely a factor in a recent deadly collision. The head-on crash left three people dead and another two seriously hurt. These types of motor vehicle accidents are often devastating for both surviving victims and the families of those who lost their lives, but most people have options for seeking justice.

According to authorities, a possible drunk driver drove the wrong direction in the northbound lanes of a freeway connector road. At approximately 3:30 a.m., the wrong-way driver collided with two other vehicles that were traveling in the correct direction. Both the driver and the passenger in the vehicle driving the wrong direction were killed in the wreck.

Reorganizing debts with Chapter 13 bankruptcy

Chapter 7 bankruptcy is a popular option for people who are ready to discharge their debts and move forward with their lives. Unfortunately, not everyone qualifies for this process. Individuals must earn less than the median California income to file for Chapter 7, which leaves many people still in desperate need of debt relief. For these people, Chapter 13 bankruptcy can be an excellent option.

Unlike a liquidation bankruptcy -- Chapter 7 -- Chapter 13 is a reorganization of debts. The plus side of this is that most people can keep their property rather than having it sold off to settle debts. Instead, a person will create a repayment plan for court approval that generally spans a period of about three to five years. Even if their income was sufficient to qualify for Chapter 13, it must also be regular and high enough to support a repayment plan of this length.

The role of fatigue in truck accidents

Many long-haul drivers would say that fatigue simply comes with the job. Sitting behind the wheel for hours a day can be more exhausting than people think, and then there is the possibility that a truck driver does not get good sleep or enough sleep when not behind the wheel. For these and other reasons, fatigue tends to play a role in many truck accidents whether they occur here in California or elsewhere.

Sleep deprivation tends to be in the top 10 when it comes to factors leading to accidents involving truck drivers. The federal government puts limitations on how long truckers can be on the road, but the regulations cannot force a driver to sleep. Even if a driver gets a few hours of sleep a night, it may not be enough to ward off fatigue. The longer that a driver is sleep deprived, the more dangerous he or she becomes.

What is an automatic stay? Can it help stop collection calls?

Have you found yourself sitting at the kitchen table looking over bill after bill while hoping your phone does not ring since it is most likely a collection call? To add to your frustration, you know that you have very little in your bank account to pay the bills and penalties and fees for being late continue to add to your debt.

This may be the point when you have decided to file for bankruptcy. A bankruptcy is like hitting the reset button on your finances. While it can be of great financial benefit to you, there are circumstances that come along with bankruptcy that are important to consider. However, one positive aspect from bankruptcy is the moment you begin working on your bankruptcy, an automatic stay on your creditors will begin.

Will Chapter 7 bankruptcy filings rise with credit card balances?

Avoiding credit card debt is often easier said than done. Whether a California consumer racked up a bill because of a medical emergency, an unexpected bill, regular spending or any other number of situations, paying a large balance off can be difficult. With the average household credit card debt on the rise, Chapter 7 bankruptcy might be the best option for those who are struggling.

Credit card balances seemed to decline in the years following the Great Recession, but they are on the rise again. With American consumers currently carrying a collective $949.9 billion on their credit cards, experts predict that balances could surpass those during the Great Recession as soon as 2019. When compared to the average credit card balance of approximately $2,000 in 1988, it might be hard for some people to not feel worried.

USA Gymnastics pursues Chapter 11 bankruptcy

USA Gymnastics apparently struggled financially after a web of corruption and abuse hit California headlines in 2016. The sports organization recently filed for Chapter 11 bankruptcy, which will allow it to restructure. It has recently been hit with many lawsuits from former gymnasts, but it claims that this filing will not affect any of the women's claims.

With the 2020 Summer Olympics feeling as if they are just around the corner, USA Gymnastics seems eager to resolve its debt issues. The organization did not disclose how much debt it is currently dealing with, but the financial issues are likely related to the rocky past two years. Not only was the company hit with claims of abuse, but it has since changed CEOs three times in under two years. One of those CEOs was even arrested for allegedly tampering with evidence related to those abuse claims.

Teen killed, others injured in fatal truck accident

Rainy conditions may have played a role in a recent fatal crash on a California highway. The fatal truck accident followed several other collisions, which had rendered multiple vehicles disabled and stuck on the roadway. However, the existence of prior accidents and rainy weather conditions does not erase any potential negligence exercised by the truck driver.

At approximately 2 a.m., an 18-year-old driver was unable to avoid a collision with a stalled vehicle that had been disabled in an earlier crash. Upon impact, the driver was tossed onto the roadway, suffering major injuries. Another 18-year-old had been in the vehicle as a passenger, and although he was also injured, he exited the car and moved to the shoulder. Two other passengers -- ages 18 and 17 -- remained in the vehicle, and it is unclear if they chose not to get out or whether they were unable to do so.

When medical debt is too much, consider Chapter 7 bankruptcy

Advanced medical care is truly a triumph of the technological age. Unfortunately, many of those advances have come with a hefty price tag. California patients often receive hefty bills after seeking treatment for serious medical issues, leaving many wondering if Chapter 7 bankruptcy could help them handle lingering medical debt.

The problem of overwhelming medical debt is so widespread and ubiquitous that one out-of-state news agency recently purchased and paid off $1.4 million worth of medical bills. For those struggling with harassing creditors and past due notices, the news of suddenly having their debt wiped free will likely come as an enormous relief. Unfortunately, it is not this easy for everyone.


Farhat Law Firm, APC
232 E. Grand Boulevard
Suite 202
Corona, CA 92879

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