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By John Clark
Actress Kelly Rutherford, who is embroiled in a very public custody battle with her former husband, Daniel Giersch, is filing for personal bankruptcy, according to a report from CBS News.
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Sources say the costs of the prolonged divorce battle, as well as the subsequent fight over child custody, has simply drained the finances of the former star of “Gossip Girl.”
Former Gossip Girl Files for Personal Bankruptcy Help
According to sources, Rutherford has paid roughly $1.5 million in legal fees during her effort to split from Giersch and retain custody of the couple’s two children, Hermes, 6, and Helena, 4.
Thanks to more than $2 million in debt, which would never be repaid with Rutherford’s current monthly income, which is reportedly just $1,279, the actress decided to file for Chapter 7 bankruptcy in California last month, according to reports.
In her bankruptcy petition, Rutherford claims that her assets are only worth a little more than $23,000, which pales in comparison to the more than $2 million in unpaid debts she reportedly owes, sources say.
And the actress has taken a significant pay cut since the end of “Gossip Girls,” the popular television drama for which she reportedly earned $486,000 during her final season of work.
To make matters worse, Rutherford also owes more than $350,000 to federal and state tax authorities, and has roughly $25,000 in credit card debt, according to sources tracking her bankruptcy filing.
In court documents, Rutherford claims to only have $11,487 in her checking account. Her other assets include $5,000 worth of furniture, $5,000 worth of clothes, and $1,500 worth of jewelry, sources say.
And according to sources, Rutherford has been forced to borrow tens of thousands of dollars from family and friends just to keep her head above water.
Bankruptcy Filing Follows Emotional Child Custody Dispute
Rutherford’s bankruptcy filing comes after she has spent several months fighting a decision by a Los Angeles judge that allowed her former husband to take the couple’s children to live with him in France.
Her former husband, who has been prohibited from visiting the United States because his visa was revoked, now lives in France, and the judge’s decision meant that Rutherford was travel long distances to see her children.
In a recent interview on ABC, Rutherford said her life has been “crazy,” and that her daughter recently told her that she wants to “come home” and “come back to New York.”
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for June 27, 2013 Atlus at risk after parent company announces bankruptcy If Detroit opted for bankruptcy, experts say wouldn’t encourage others Pfizer’s Quigley Can End Nine-Year Bankruptcy, Judge Says
Understanding differences between bankruptcy chapters can make a big difference in helping you obtain a favorable outcome for your situation. Most bankruptcies filed by individuals and small businesses include Chapter 7 and Chapter 13. When it comes to understanding which chapter you should file, your debt, income, assets, and financial goals will have a significant [...]
Great news for families needing to file bankruptcy in Fresno! In order to qualify for a Chapter 7 bankruptcy, most families have to pass the "means test". In very simple terms, the "means test" takes a family's income which is then reduced by certain expense allocation. If a family's net income is less than the established guidelines, the family qualifies to file a chapter 7 bankruptcy. If the income is higher than the set guidelines, then it becomes much more difficult to successfully complete a chapter 7 case.
The recent good news is that the median income guidelines were raised. Thus, more families qualify for chapter 7 bankruptcy. If you are single, the new median family income is $48,415. It used to be $47,433. A family of 2 is allowed $63,030. It was $61,752. A family of three is $67,401. It was $66,034. A family of four is now allowed $75,656. It used to be $74,122. If you have a larger family, add $8,100 for each member in excess of 4. You can view the guideline table at the United States Department of Justice's website: http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm
Using the means test properly is important to a successful outcome. About two years ago, I had a family that did not qualify under the means test. However, the wife was pregnant. I waited to file their case until after their baby was born. Their family size increased by 1. Thus, I was able to use a higher median income and they passed the means test.
The new "means test" data changes frequently. These numbers should be good until November 1, 2013.
Modern day rebels have defeated the Imperial Storm Troopers, a.k.a. Midland Funding LLC!
A debtor sued by Midland Funding, LLC won at trial and is has now sued Midland Funding LLC for unfair practices and malicious prosecution.
In Fresno County and the rest of California’s Central Valley, Midland Funding, LLC, has filed thousands of cases on behalf of credit card companies and other creditors. Most of the time Midland hopes that the defendant never responds to the lawsuit. However, if the defendant responds, they hope to settle the case before it ever goes trial.
In Samuels vs. Midland Funding, LLC, 2013 Westlaw 466386 (S.D. Ala.), defendant Samuels fought Midland Funding. He did not settle the case but forced them to trial and won!. He then sued Midland funding. This case looked at whether it was permissible for Samuels to sue Midland after it lost at trial. So far, the court is saying that Samuels has a valid lawsuit against Midland Funding.
Before looking at the details in this case, let’s take a step back. Midland Funding is notorious throughout the country for buying debt in bulk. Just like how you can go to Costco and buy a 100 rolls of toilet paper in bulk, Midland Funding purchases blocks of debt at a discount. It then tries to collect on the debt. Their goal is to collect more money from debtors than it cost them to buy the debt. They are very good at what they do. The problem bulk debt purchasers have is that they sometimes fail to obtain the documents, or understand the facts well enough to win at trial.
In the Samuels case, the debtor was smart. He figured out that Midland Funding could not prove its case and refused to settle with them. By refusing to settle, Samuels forced Midland to trial. They were completely unprepared for trial. They showed up with no witnesses or documents to show the debt was owed by Samuels. Like many “bulk purchasers” of debt – they were hoping to settle the case or that Samuels would ignore the lawsuit so that it would not have to prove their case in front of a jury, or judge. They must have been shocked Samuels took them all the way to trial because they showed up with no witnesses or evidence to prove the debtor owed the debt. Needless to say, the Samuels won the case.
But, the story does not end here for Midland Funding. Samuels went on the offensive. He filed a second lawsuit against Midland Funding for violation of the Federal Debt Collection Act and malicious prosecution. Midland Funding’s high powered attorneys tried to kick the case out before it was tried by a judge or jury. However, they lost the motion and tried to win on appeal. However, they lost again. The court held that it was concerned with bulk purchasers of debt that were unable to prove their cases. Now it looks like Midland Funding has to convince Samuels to settle his case against them by paying money to him. I hope Samuels takes this case to trial. It would serve Midland Funding right if it is proven they were never in a position to win their case at the trial level.
The lesson to take from this case is to not be afraid of these national debt companies. Defend yourself! Make sure the claim is valid and that the debt collector can prove its case at trial. If they cannot do this before trial, they likely will fail at trial as well. It is unfortunate that very few defendants in Midland Funding cases know this. Do not be one of them.
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We don’t have any savings because we’re paying for yesterday using tomorrow’s money. Let’s get off the roller-coaster.
BankRate releases a study telling us that 27% of people surveyed have no savings whatsoever. In other words, one missed paycheck – or even a check that’s slightly short of what’s expected – can throw you into a financial death spiral.
The study, of course, is all hype and very little substance. After all, the survey included a mere 1,000 people.
You can find more than 1,000 people in a Costco on a Saturday afternoon.
I think a wider audience would reveal far worse numbers.
Too Much Money Goes Out The Door
Our national savings rate is in the toilet, largely because we’ve been struggling with huge unemployment figures for the past five years. The government doesn’t count people who have simply given up on looking for work, but if it did then I wouldn’t be shocked to find out that 25% or more of able-bodied adults were out of work for a chunk of that time period.
Our debts are enormous. Student loans come in at more than $1 trillion. Mortgage payments eat a huge chunk of our take-home income. Car loans and credit card payments leave us with a pittance to sock away for the proverbial rainy day.
The cost of health care is laughable. Until recently we were covered under COBRA through my wife’s former employer, and my heart stopped every time I had to write a check. To say nothing of the copayments and deductibles. One sniffle and most people are in deep trouble.
Forces Conspire Against Us
We’re all living longer now than at any other time in the history of humanity.
Social Security was created with an actuarial table that’s now completely useless, which means the system isn’t going to provide us with the safety net we were originally promised.
Banks charge interest at rates far above the rate at which they borrow money, which enables them to profit from the spread in ways that would make a loan shark sweat.
Mortgage lenders are caught cheating the system at every turn.
The cost of education outstrips starting salaries by ever-greater amounts each year, yet we’re continually sold on the notion that higher education is a ticket out of poverty for our children.
Don’t Think You’re Alone
Your neighbor’s driving around a brand-new car and talking about that kitchen renovation. It doesn’t make him or her wealthier than you – remember, fewer than 25% of people in this country have enough money in their savings account to cover at least six months of expenses. 50% have less than a three-month cushion and 27% have no savings at all.
That car’s financed to the hilt, and the only way that renovation is happening is if the refinance comes through.
Mr. Moneybags down the block is strangling himself. And if you believe anything different, you’re fooling yourself.
You Need To Find Your Own Better Way
You’re on a treadmill, running continuously yet going nowhere.
It’s time to sit down, assess your financial situation, and resolve it in a way that’s best for you – not the banks or the nameless, faceless, “them.”
Can’t pay your debts without starving yourself? Look into bankruptcy.
Mortgage strangling you? Sell the house, take whatever equity you’ve got, and move to a place you can afford without forgetting your long-term savings.
Your neighbor’s got a more expensive car or a bigger house? That makes your neighbor an idiot who measures his or her self-worth by trying to outshine everyone else on the block.
Worried about the impact on your credit score? Does a high credit score put food on the table and medicine in the cabinet?
Someday, you won’t be nearly this young or quick. Your body will slow down, and you’ll want to spend some time enjoying what time you’ve got left on this earth.
Do it in poverty or wake up and take some action. Your choice.
Image credit: theilr
Why Most Of Us Don’t Have Two Nickels To Rub Together was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Written by: Robert DeMarco
Yes, you can settle your credit card debts without paying someone to help you. There is no legalistic formula. No special skill set is required. The only thing you need is a telephone and the desire to end your debt nightmares.
Prepare
However, before you begin you need to be organized and prepared. First, locate your last credit card statement. There should be a telephone number on the credit card statement for “customer service” or “billing inquiries”. Call the number and request a breakdown of your bill. You will want to see how much of your bill reflects: (a) purchases, (b) cash advances, (c) interest, and (d) fees (late, over the limit, etc.).
Second, prepare a budget. You need to understand how much money actually comes into the household and how much goes out. While tempting, do not kid yourself. Be realistic with your budget. Also make sure you budget and plan for onetime expenses like car and HVAC repairs.
Third, after you have completed your budget prioritize your expenses. Expenses like food, shelter and transportation take priority. At the bottom of the list would be credit card expenses and other unsecured debts.
Fourth, set up a bank account from which the settlement funds are to be transferred from – if a settlement is reached. This account should be set up at a bank where you do not currently have a checking account and to whom you owe n money to. This way, you are in complete control of the process should it go south.
Make the Call
Now you are ready to make the call. The customer service representative who answers the telephone likely will not have the authority to settle your account. Nonetheless advise them of the purpose of your call and request to speak with the department that handles settlement arrangements, or workout arrangements.
During this process, it is important to take notes of who you communicate with. Keep a notebook for this purpose. Remember, the persons on the other end of the phone are making notes of every conversation as well. Once you get someone from the loss mitigation department or workout department, get the person’s name, ID number (if there is one) and a direct dial number or extension. When you finish the call, jot down a brief summary of the conversation with the date and time.
What to say
Be candid. Chances are there is some life event that brought you to this point. Whether it was a divorce, medical bills or job loss, explain your situation. Express your desire to pay while at the same time explaining the financial challenges you are facing. Try to get the creditor to make the initial offer.
After the creditor makes the initial offer, thank them and advise them that you will get back to them shortly. When you call back, advise the person who answered the phone who you were speaking and what they had offered. Nonetheless, advise them that you are considering alternative methods for settling the debt (only if true). At this juncture, make a very low counter-offer – one which you know will not be accepted and should be about 15% to 20% of the outstanding obligation. When rejected, express your appreciation for their assistance and advise them their proposal is just more than you can afford.
At this juncture, you should have a good idea of the settlement parameters and they should have an understanding of your financial challenges [perhaps a bankruptcy or the need to borrow from retirement funds or family members]. Call them back after a few days and make an offer of about 25% to 30% of the outstanding debt. At this point take heed in their response and attempt to come to a mutual agreeable number. When close to a deal offer the creditor an immediate cash settlement and offer to allow a wire transfer from a bank account you previously established
The 1099 and Tax Implications
Chances are, if your offer is accepted and consummated, you will receive a 1099-C form from the credit card debt holder. This form indicates that you received income by way of debt forgiveness. There are, however, two exceptions to the incurring of such a liability: 1) bankruptcy; and 2) debt settlement where you remain insolvent. Nonetheless, it would be wise for you to review Publication 908 (Rev. October 2012) from the Internal Revenue Service and/or consult with your accountant.
Miscellaneous
Do not get overly concerned about your credit rating. If you are reading this, your credit is less than satisfactory. It is never “worth it” to pay more to receive some alleged positive rating resulting from debt settlement. Settle for the neutral rating that the debt is settled. I would never “pay cash” to potentially improve my credit rating. After all, it was your credit management, or the lack thereof, that created the present predicament.
If you are facing financial challenges stemming from a divorce or other financial challenges, bankruptcy may be a viable option, and the lawyers at DeMarco•Mitchell, PLLC, are here for you. Feel free to call or email us for a free initial consultation to discuss your financial condition and how we can help.
DATED: June 26, 2013
Many who file for bankruptcy qualify for protection of their 401(k), while being able to discharge or eliminate debt. This is common concern debtors have for a number of reasons. Some who are thinking about filing may receive funds from their 401(k) as their only form of income, especially if they are retired. Some may [...]
After a collector obtains a judgement against you, the collector can obtain an order that requires you to appear in court to answer questions about your income and assets in order to determine whether there a. Note: If you file bankruptcy prior to the date of the judgement debtor exam, you will not need to appear at all. If you are not filing bankruptcy prior to the judgement debtor exam, there are three things to remember:
- The judgement debtor exam is a court-ordered appearance. Repercussions for missing the examination, though unlikely, at least theoretically include a contempt order or arrest. If you do not want to appear, it is important to relay a written excuse for postponing the examination. The court is likely to grant your request.
- If you do appear, tell the truth as your answers will be under oath.
- If the collector finds assets or income unprotected by law at your judgment debtor exam, the collector is likely to quickly obtain a court order enabling it to seize those unprotected assets?
If you have a collector that is sufficiently vigilant to set and appear at a judgment debtor examination, it’s time to resolve the debt issue itself. Retain an attorney to determine whether there really is any non-exempt equity for the creditor to pursue.
If you and your attorney determine that there really is a risk of seizure, have your attorney either pursue a stipulated agreement for repaying all or part of the judgment in a manageable fashion that does not require you to come in for examinations or evaluate your financial situation to determine whether bankruptcy might be the appropriate solution.
Please feel free to contact our Oregon and Washington consumer law/bankruptcy law offices. We have offices in Portland, Salem, Vancouver or Seattle and we would be more than happy to help.
The original post is titled Judgement Debtor Examinations in Washington and Oregon , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
You can protect your home in Chapter 7 bankruptcy. Under California law, you may be able to protect real estate from creditors even if you don’t live there. But when you walk into bankruptcy court, the game changes.
The client called from Los Angeles, where she lived. Work had taken her from her home in San Diego, where she owned a home. But the work wasn’t paying enough to cover the bills, and she wanted to file for bankruptcy.
She insisted that she could protect her house using the homestead exemption provided for under California law.
This, in spite of the fact that she was living in a rental in Los Angeles – about 3 hours from the place she was trying to protect.
And in spite of the fact that she had no intention of ever going back there. She was about to get married and settle in Los Angeles, and was renting her property out to help cover the costs.
Under the bankruptcy laws, you can protect your primary residence in Chapter 7 provided that the equity doesn’t go over certain limits.
Because this woman didn’t live in the home, she outsmarted the law by getting her homestead protected in a different way.
Automatic Homestead In California
If you live in a a home that you own, you are automatically given homestead coverage.
You don’t need to do anything, no flag need be planted in the ground and no grand declarations made.
In fact, California Civil Code 704.710 recognizes a homestead to be your principal dwelling.
You say it’s your home, and the law recognizes it as such.
Easy peasy.
Declared Homestead In California
In addition to the automatic homestead provision under California law, you can elect to declare your homestead under California Civil Code 704.910.
To declare your homestead, all you need to do is be either an owner or spouse of an owner and record a homestead declaration in the office of the county recorder of the county where the dwelling is located.
From and after the time of recording, the dwelling is a declared homestead for the purposes of the law unless the homestead is abandoned.
Abandoning A Declared Homestead
There are two ways to abandon a declared homestead under California law.
You can sign a declaration of abandonment. That’s easy enough.
You can sign a new homestead declaration on different property.
That’s it.
Declare Your Homestead On A Rental Property?
If you’re going to route of declaring your homestead under California law, you must reside in the property on the date the homestead declaration is recorded.
There’s no requirement that you actually or continuously reside in a declared homestead after the declaration.
Move out, keep the homestead protection under California law.
Rent it out, same deal.
But Bankruptcy Is Different
My client, smart as she was, couldn’t outsmart the bankruptcy system by declaring her homestead on a rental property.
If you file for bankruptcy and are required to surrender property, that’s a forced sale – not a voluntary one.
The declared homestead provisions of California law apply to voluntary sales only, not to forced sales.
This woman was out of luck. The system declared shenanigans.
Maybe she would have had a better argument if she was away from the home temporarily. Or if she intended to go back there.
But not under these circumstances.
I gave her credit for thinking on her feet, though.
By the way, here are the controlling bankruptcy decisions in case you’re interested:
- In re Kelley, 300 B.R. 11, 19 (9th Cir. BAP 2003).
- In re Anderson, 824 F.2d 754 (9th Cir.1987).
Image credit: thepipe26
Can You Save A California Rental Property By Declaring A Homestead? was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
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