San Jose Bankruptcy & Fair Debt Collection Practices Act Lawyer Blog

The issue of whether someone who files bankruptcy in San Jose has to go to court keeps coming up, so I thought I would write about it here.

Do I have to go to court?

The Quick Answer
You will need to attend a short hearing about 4-6 weeks after you file.

For directions to the U.S. Bankruptcy Court in San Jose, CA click here.

The Long Answer
About two weeks after you file your bankruptcy petition you should receive a notice in the mail from the court. The notice will tell you that a bankruptcy has been filed, and will also tell you the date it was filed, your case number, and the date, time and location of your hearing.

What will happen at my hearing?

The Quick Answer
At your hearing the bankruptcy trustee, and any creditors who show up, get the chance to ask you questions regarding your petition.

The Long Answer
What will the trustee do?
At your hearing the bankruptcy trustee will ask you, "do you promise to state the whole truth and nothing but the truth." You should respond "I do" (assuming that you will state the truth).
The trustee's job is to review your bankruptcy papers to make sure that you have listed all of your property, and that you have honestly and accurately valued your property. The trustee may even want to ask you while you're under oath whether or not you honestly and accurately valued your property. Sometimes, the trustee will spend more time on a case that involves a lot of property, than a case with little or no property.

Common questions from trustees
Common questions trustees have regarding property are: "How did you decide the value of your house?" "Whether you plan on keeping your cars?" Whether or not anyone owes you any money?" "Whether you expect to get a tax refund?" "Whether you expect to get any inheritance in the next 6 months?" "Whether you are still at the same job?"

Additionally, the trustee will want to make sure that the laws you used to protect your property (known as exemption laws) are being used properly. If you do not use the right exemption laws to protect your property the trustee may have a problem with your bankruptcy. If so, some changes may be necessary. Just because the trustee is asking you questions regarding your property doesn't mean that there is a problem.

For those filing bankruptcy in San Jose, CA the laws are favorable enough that typically you can protect most or all of your property. But you should check with a qualified bankruptcy attorney if you have any questions about any property you are concerned about protecting. Also, the trustee may want to find out if you have given away any property before you filed your bankruptcy, or paid off any creditors while ignoring others. The trustee can review your papers to find that out, or may just simply ask you a few questions about your financial dealings the past year or so.

In San Jose the bankruptcy trustee will also want to make sure you read the Bankruptcy Information Sheet. Don't panic about what's mentioned on the sheet, a qualified bankruptcy attorney can help you better understand it.

Will any creditors be at my hearing?
After the trustee is done asking questions, creditors are given an opportunity to ask you questions. However, most creditors, including major credit cards do not bother showing up at the hearing.

Questions which you won't be asked
Don't be confused by myths you may have heard, or by movies you may have seen. Because the answers are self evident, you are usually not asked why you are filing for bankruptcy or why you can't pay your bills.

I remember seeing in a movie where someone who filed bankruptcy went to their hearing and the court stamped "BANKRUPT" on the person's paperwork. In all of the hearings I have gone to I have never seen that happen. Nor do I believe that it is even legally possible since your bankruptcy case cannot be concluded until 60 days after your hearing. Also, since there is no judge at the hearing, I don't think there is anyone there to declare you bankrupt!
I think it's safe to say that the exciting image of a courtroom that everyone has, based on Hollywood's theatrics, is far more entertaining and intimidating than anything you'll see if you choose to file bankruptcy.

If you have been confused by all the rumors, then I strongly suggest you speak to a qualified bankruptcy attorney who knows first hand what happens at a hearing. DON'T rely on someone who doesn't know. Many professionals will be willing to meet with you at no charge to help you learn more about the process.

Despite the fact that more than 1 million people file bankruptcy in the U.S. each year, there still seems to be a lot of confusion about bankruptcy. So, I took a moment to answer some common bankruptcy questions.

Of course, the information below is not intended to be specific legal advice. when considering bankruptcy you should meet with a qualified bankruptcy attorney. For more information look at www.e-bankruptcy.com, or call San Jose bankruptcy attorney Ronald Wilcox, at 408-296-0400.

What kind of bills can I wipe out in bankruptcy?
Generally, if you go through bankruptcy, your goal is to wipe out your unsecured debts. Your unsecured debts are typically major credit cards, medical bills, or any other money you may owe someone that is not secured.

Can I keep my house and my car?
Many people filing bankruptcy can keep their homes, their cars, and all of their property (we have helped many people in San Jose protect their property).

Can I get rid of taxes in bankruptcy?
You may have heard that you cannot wipe out taxes in bankruptcy. THAT IS NOT ALWAYS TRUE! Under certain conditions you may be able to wipe out taxes in bankruptcy.

How long does it take and who will be told?
Typically, you can expect your case to take three to four months from the day you file your papers (known as the bankruptcy petition) 'till the day your debt is discharged. For the most part, notices will only be sent to those you owe money.

When will those ruthless bill collectors stop calling?
In most cases, the day you file your bankruptcy, a restraining order goes into effect against your creditors. This restraining order is called the automatic stay. Generally, the automatic stay prohibits any attempt by a creditor to try to collect a debt which you had before you filed your bankruptcy.

Do I have to go to court?
You will need to attend a short hearing which, in San Jose, is about 4-6 weeks after you file.

Do I have to talk to a judge?
Your bankruptcy hearing is typically run by a trustee, not a judge. That means you can be more relaxed since things are less formal. In fact most trustees sit at a table with you,
rather than those intimidating court rooms you have seen on T.V.

What will happen at my hearing?
At your hearing the trustee, and any creditors who show up, get the chance to ask you questions regarding your petition. However, these days creditors rarely show up.

When will I know when my debts are discharged
Approximately 60 days after your hearing, the court will mail discharge notices to you, your attorney, and all of your creditors. The discharge notice will say that your dischargeable debts have been discharged.

What if I have used my credit cards just before bankruptcy?
If you intentionally run up your credit cards in the hopes of wiping them out in bankruptcy, you have committed fraud. However, if you made purchases for reasonable living expenses it may not be fraud.

Can I go to jail if I can't pay my bills?
Typically, you won't go to jail because you are unable to pay your bills (although you should talk with an attorney if you owe child support debts).

What affect will bankruptcy have on my credit?
Bankruptcy may appear on a credit report for up to 10 years. But, that doesn't mean you can't obtain new credit during that time.

Can I rebuild my credit after bankruptcy?
Yes. You may have heard about people who have filed bankruptcy two or three times. Maybe they are the best proof that people can actually get credit after bankruptcy. If they weren't able to get credit after their first bankruptcy, they would not have had to file bankruptcy again!

What is a Chapter 13 reorganization?
A chapter 13 is a type of bankruptcy where you reorganize your finances and repay some, or all, of your debts over time.

What Court Will My Case Be Filed In?
For the U.S. Bankruptcy Court near you in California, see the links below:
U.S. Bankruptcy Court Northern District of California
U.S. Bankruptcy Court Eastern District of California
U.S. Bankruptcy Court Central District of California
U.S. Bankruptcy Court Southern District of California

Bankruptcy Fees Increase

The Northern District of California, U.S. Bankruptcy Court (which has courthouses in San Jose, San Francisco and Oakland), has announced that bankruptcy filing fees will increase on November 1, 2011.

• Chapter 7 bankruptcy filing fees will increase from $299 to $306.
• Chapter 13 bankruptcy filing fees will increase from $274 to $281.
• Chapter 11 filing fees will increase from $1,039 to $1,046.

The bankruptcy filing fees are only increasing by $7, but it's an increase nonetheless.

Other fees, such as filing an Adversary Complaint, Motions regarding the Automatic Stay, and others, will also be increasing by differing amounts.

Bankruptcy Filing Fees are Separate From Attorney's Fees

The above fees are paid to the court clerk. They are always in addition to any attorney's fees for representation in a case. Most attorneys will give you a FREE consultation to first see if bankruptcy can help you.

Adjustments for costs of living, etc., are not unusual in the bankruptcy world. On January 1, 2010 the homestead exemptions rose to $75,000 for those who are single, and $100,000 for those who are married (that's the law that lets you protect equity in your home, i.e., if the equity in your home is $100,000 or less, you can protect it and creditors cannot take it away).

Most people filing bankruptcy in San Jose can typically protect all of their property, including their house, since California's exemptions laws are favorable to consumers. There are many different exemptions that help people protect their property when filing bankruptcy. While the federal bankruptcy code provides a list of exemptions, these exemptions are not available in California. California law requires you to use the exemptions found in California state law -- not the U.S. bankruptcy code.

One exemption scheme in California allows a "wild card" exemption. That lets you protect anything you own up to a certain amount (currently more than $23,000). However, whether or not you are trying to protect equity in a house affects your wild card exemption. To put it simply, most people filing bankruptcy in San Jose can protect their house, car, personal property, paycheck and retirement accounts. A qualified bankruptcy attorney can help you figure out what bankruptcy exemptions apply to your particular circumstances.

Note: California's exemption amounts are no longer updated in the statutes themselves. California Code of Civil Procedure section 740.150 deputized the California judicial council to update the exemption amounts every three years. (The last revision was in 2010; the next will be 2013.) The current exemption amounts for personal property can be found on the California Judicial Council Website. http://www.courtinfo.ca.gov/forms/documents/exemptions.pdf

How to Get the Value of Your Home
Zillow.com is a helpful tool that shows home values in your neighborhood. Just click on the link to Zillow.com and enter your street address to get an estimate of the value of your house, and all others in your neighborhood. Zillow.com also shows a listing of the average home value in your zip code. (Note: Does not serve all areas, and valuations are imperfect estimates only.). However, Zillow.com does provide estimates of home values in San Jose, California.

Michael Lewis, author of "Moneyball" and "Liar's Poker," has a lengthy article in the November issue of Vanity Fair magazine about how dire California's public finances are.

Lewis also talks about how the City of San Jose is on the verge of bankruptcy. He goes into detail about how San Jose mayor Chuck Reed and Vallejo Fire Chief, Paige Meyer, are trying to avert catastrophes in their respective cities.

One of the experts interviewed for the article says that people want more services, they just don't want to pay for them. Another perspective is that those providing such services (those working in the prison systems, police officers, fire fighter's, etc.) have been unrealistic in their demands for salary and benefits.

The article goes into great depth about what happened in California, but if you want just a summary, here it is:

• In 2011, California will spend $32 billion on employee pay and benefits. In 2010 California spent $6 billion on prisons and another $4.7 billion on higher education. Over the past 30 years the state's share of the budget for the University of California has fallen from 30% to 11%. In 1976 a Cal student paid $776 a year in tuition, and in 2011 now pays $13,218.

• The head parole psychiatrist for the California prison system was the state's highest paid public employee; being paid $838,706 in 2010.

• Lewis claims San Jose is nearly bankrupt, despite its AAA bond rating from Moody's. He fears the $245 million San Jose has to pay out in pensions and health-care for retired city workers "are more than half" the yearly budget and eventually, they consume the entire budget.

• San Jose's budget turns on the pay of its public-safety workers: the police and fire fighters now make up 75% of discretionary spending. Lewis writes that over the past decade the City of San Jose repeatedly caved to the demands of its public-safety unions. As result of higher pay and benefits, San Jose has now been forced to lay off thousands of city workers, closed libraries three days a week, and cancel plans to open a new community center.

• In Vallejo 80% of the city's budget was wrapped up in the pay and benefits of public-safety workers. Since Vallejo's bankruptcy the police and fire departments have been cut in half.

• From 2006-2010 Vallejo saw its real-estate values fall 66 percent. Vallejo then declared bankruptcy in 2008.

• Vallejo has a population of 112,000, and the Fire Department receive13,000 fire calls per year. That's 8.7 fire calls per person. Or 37 fire calls each day. There are 67 firefighters in Vallejo's fire department. So thats 194 calls per firefighter. Fortunately, they aren't all fires.

• In Vallejo all the traffic lights are set to blink; there are no more cops to police the streets.

The bottom line was a housing-price collapse in California lead to a decline in property tax revenues. Lewis offers an explanation of how this all snowballed:

"From 2002 to 2008, the states had piled up debts right alongside their citizens': their level of indebtedness, as a group, had almost doubled, and state spending had grown by two- thirds. In that time they had also systematically underfunded their pension plans and other future liabilities by a total of nearly $1.5 trillion. In response, perhaps, the pension money that they had set aside was invested in ever riskier assets. In 1980 only 23 percent of state pension money had been invested in the stock market; by 2008 the number had risen to 60 percent. To top it off, these pension funds were pretty much all assuming they could earn 8 percent on the money they had to invest, at a time when the Federal Reserve was promising to keep interest rates at zero. Toss in underfunded health-care plans, a reduction in federal dollars available to the states, and the depression in tax revenues caused by a soft economy, and you were looking at multi-trillion-dollar holes that could be dealt with in only one of two ways: massive cutbacks in public services or a default--or both."

The observations are interesting, but there are some oversights. In 2011, the "average Californian" made $48,000 a year, but is carrying $78,000 in debt; that's a negative of a whopping $30,000! Lewis attributes this to people living beyond their means. Lewis relied on data from the Federal Reserve, but he failed to mention that much of that debt is mortgage debt, which until the recent financial crisis was considered "good debt", since homes are considered an appreciating asset. Also, owning a home in California is a lot more expensive than in the rest of the U.S. Whether or not San Jose if forced to follow Vallejo into bankruptcy, there are a lot of lessons to be learned from the last boom and bust!

A recent study found that bankruptcy filings are up among college graduates and those earning $60,000 a year or more. Also, it seems bankruptcy filings are also up for married people.

The study shows that the economic recession has caused financial stress which is spreading to those who may have more of an education, who earn more money, and even dual income families. The study, done by the Institute for Financial Literacy (a nonprofit organization that promotes effective financial education and counseling), collected responses from 50,000 individuals that filed bankruptcy in the past five years. Each of these people sought credit counseling (which is now required under the new bankruptcy law- typically bankruptcy attorneys help their clients obtain this).

The study found that those holding a bachelor's degree accounted for 13.58% of filings last year. That number is up from 11.2% in 2006- a significant 21% increase. Those holding high school degrees still accounted for the largest percentage of filers, being 36.27%, but their proportion as to all people filing bankruptcy fell by 8.6%. Those most at risk for a bankruptcy filing were individuals who attended college but did not complete a degree, the study said. They accounted for 28.7% of filings last year. This may be because these individuals are saddled with student loans, but don't have the rewards of an actual college degree.

Those earning $60,000 or more accounted for 9.2% of all filings last years, that is up from 5.5% in 2006, which is a 67% increase! Those earning less than $20,000 per year accounted for nearly 40% of all bankruptcy filings.

The study found that the number of bankruptcy filers who were married jumped above 60% in the past five years, from 57.2% in 2006. That out paces the 50.3% of U.S. adults that are married, according to the U.S. Census Bureau.

In California bankruptcy filings increased by 25% from 2009 to 2010. In San Jose bankruptcy filings increased 16%, with more than 13,000 people and businesses seeking bankruptcy protection.

Specifically there were 13,366 new cases filed in San Jose, 7,844 of which were Chapter 7 filings, and 5,376 people filing chapter 13 bankruptcy (a reorganization plan that allows people to repay part of their debt over time). The rest of the cases were Chapter 11 bankruptcies (usually for companies) and Chapter 12 bankruptcies (for family famers).

Ironically it looks like the passage of the new bankruptcy law (the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act) did not stop the increase in people needing to file bankruptcy.

Looking back at statistics and a comparison of bankruptcy filings under Chapter 7, Chapter 13 and Chapter 11 for the United States Bankruptcy Court Northern District of California (which includes San Jose, San Francisco and Oakland), shows bankruptcies rose sharply from 2007-2008.

In 2007 there were a total of 127,359 bankruptcy cases filed in the Northern District of California. The number of bankruptcies then rose each month and each quarter. In the 2nd quarter of 2007 there was a 16% increase in bankruptcy filings, the 3rd quarter of 2007 increased 7% more and then the 4th quarter of 2007 increased another 14%, for a total of 21,758 filings for the last three months of 2007. Then in 2008 there was an even larger increase in bankruptcy cases filed. The 1st Quarter increased 18% from the last quarter of 2007, the 2nd quarter of 2008 increased 26%, the 3rd quarter of 2008 increased 14% and the 4th quarter increased by 3% for a total of 38,011 filings for the last three months of 2008.

As the statistics show, bankruptcy filings increased by approximately 70% from 2007 to 2008. The number of home foreclosures and adjusting mortgages contributed significantly to the increase in bankruptcy cases, as did layoffs and the "Great Recession."

A San Jose, CA federal judge will allow a California identity theft victim to proceed with his lawsuit against the Bank of America. Guillen v. Bank of America, et al., (N.D. Cal. August 31, 2011). The Bank of America asked the federal court to throw out several claims of a Santa Cruz man who was the victim of identity theft.

Narcizo Zavala Guillen alleged that someone stole his identity and used his personal information to obtain two mortgage loans from Bank of America. Mr. Guillen was surprised when he received a letter from Bank of America stating the available credit limit on his credit card had been reduced to $1,000.00. In response to the letter, Mr. Guillen went to a Bank of America branch on or about January 21, 2009. There he learned that two mortgage loans had been taken out in his name. Mr. Guillen also filed an identity theft report with the Watsonville Police Department identifying the loans as fraudulent. Mr. Guillen also disputed the debt with all four major credit bureaus (Experian, Equifax, Transunion, and CREDCO).

In response, Bank of America sent Mr. Guillen a letter on June 29, 2009, wherein it acknowledged that he was indeed a victim of identity theft as to delinquent mortgages and indicated it had requested removal of the loans from Plaintiff's credit report.

Despite this acknowledgment, however, Bank of America continued to report the inaccurate information, and ultimately referred one of the delinquent mortgages to debt collector SRA to attempt to collect $145,816.20. Bank of America eventually commenced a foreclosure proceeding against the home securing the mortgages, and thereby caused the Santa Cruz County Recorder's Office to publish defamatory statements concerning Plaintiff in the foreclosure documents.

The federal court rejected the Bank of America's argument that Mr. Guillen could not bring a suit under the California identity theft statute because the bank earlier admitted he did not owe the debt. The judge noted that the Bank of America continued to try to collect from Mr. Guillen, and foreclosed on the home, even after they admitted he was a victim of identity theft. Relying on another Northern District of California decision, the court also held that federal law did not block the California Identity theft claims. California Civil Code §1798.92 et seq. Pasternak v. Transunion, 2008 U.S. Dist. LEXIS 115442, at *10-11 (N.D. Cal. 2008).

Similarly the federal court also held that federal law did not block Mr. Guillen's claims under the California Fair Debt Collection Practices Act (California Civil Code §1788 et seq.)

The federal judge also allowed Mr. Guillen to proceed with his claims under California's Credit Reporting Agency Act (California Civil Code §1785.25), alleging Bank of America reported false information to the credit bureaus.

The decision was also significant in that Mr. Guillen was able to avoid filing bankruptcy to try to stop the Bank of America from attempting to collect the alleged $145,816.20 due. So, those in California can use California's identity theft law, and related laws, to protect them when creditors and debt collectors are trying to collect money that is not actually owed.

A San Francisco news report, "Feds won't fight bankruptcy by married gay couples", has indicated that Federal officials will allow legally married same-sex couples to file joint bankruptcy petitions.

This was on the heals of a unique decision signed by 20 of the 24 bankruptcy judges in Los Angeles, CA, which caused the federal government to alter its former stance that opposed joint bankruptcy filings by same sex couples. This will have a significant impact on all bankruptcy courts in California, including the San Francisco Bay area, and San Jose.

Back in 2008 Gene Balas and Carlos Morales were married in California, during the brief period of time same sex marriages were legal in California. (After that California voters passed a constitutional amendment banning same-sex marriages.) Balas and Morales later filed a joint bankruptcy petition.

The U.S. Bankruptcy Trustee challenged the bankruptcy filing, arguing that a same-sex couple could not file a joint bankruptcy (the U.S. Trustee's office is kind of like the District Attorney for bankruptcy cases; just like the D.A.'s you see on T.V.- they are charged with making sure no one is beating the system). However, 20 of the 24 bankruptcy judges in Los Angeles, CA, disagreed with the U.S. Bankruptcy Trustee and ruled that attempting to block the couple's joint bankruptcy petition violated their civil rights. In re Balas and Morales, Central District of California (June 13, 2011).

The Obama administration's position is that the federal law that forbids government recognition of same-sex couples is unconstitutional. Thus, Tracy Schmaler, a Justice Department spokeswoman recently indicated that government bankruptcy lawyers have now decided that letting gay and lesbian couples file joint bankruptcy petitions would be consistent with the Obama administration's position. Obviously, the federal government's new position is also consistent with the decision of the 20 bankruptcy judges that determined not allowing the joint bankruptcy petitions would be a violation of civil rights.

The Obama administration's stance on the Defense of Marriage Act was also cited this week by the Ninth Circuit Court of Appeals in San Francisco when it ordered the Pentago to immediately stop enforcing the 17-year old law ("Don't ask, Don't tell"), that prohibits gay men, lesbians and bisexuals from serving openly in the U.S. Armed Forces.

So, the Department of Justice will no longer try to dismiss joint bankruptcy petitions filed by gay and lesbian couples that were legally married. And, in what now appears to be a national policy, the justice department has also caused the government to drop its opposition to the joint bankruptcy petition of a same-sex couple in New York.

As a result of the bankruptcy judge's ruling, Balas, 42, a freelance writer, and Morales, 46, a graphic designer, will save time and money by not having to file separate bankruptcy petitions. Nor will they have to pay to separate filing fees, or untangle their finances, which include joint bank accounts, joint debts and jointly owned real estate.

While the couple is delighted by the ultimate result, they are still hampered by the Defense of Marriage Act and other state laws than ban same sex marriages, which leaves the couple feeling less than equal. When considering taking a job in another state, the couple has to think about whether their marriage would be recognized for purposes of taxes, hospital visitation, inheritance and other spousal rights. In essence, moving to another state puts the couple in the unfortunate position of being instantly divorced.

So, while the rights for same sex-couples may have a long way to go, California seems to be at the forefront of assuring all people with equal rights under the law.

A Court allowed a federal lawsuit against a debt collector attempting to collect a debt after a consumer filed bankruptcy. Church v. Onewest FSB, 2011 U.S. Dist. LEXIS 63635 (D. OR, June 15, 2011). The federal judge refused throw out the lawsuit brought by a consumer against the debt collector for violations of state and federal Fair Debt Collection Practices Act (FDCPA) laws. The debt collector argued that since the consumer filed bankruptcy, he would only be allowed to sue the debt collector in Bankruptcy Court (which would arguably provide him less rights), and not be allowed to bring claims under the FDCPA in federal court (which may provide him more greater rights).

The judge rejected the debt collector's argument that this case was just like Walls v. Wells Fargo, 276 F.3d 502 (9th Cir. 2002). In the Walls case the Ninth Circuit Court of Appeals in San Francisco, CA, held that when a creditor tries to collect a debt that was wiped out in bankruptcy it is violating bankruptcy law, but not the Fair Debt Collection Practices Act (consumer right's under these two laws are very different, with many believing the FDCPA is more helpful to consumers).

But, in the recent case, the U.S. District Court of Oregon (one of the Courts within the Ninth Circuit) reasoned that the consumer was not directly alleging a violation of the bankruptcy in his federal court lawsuit. Instead, the consumer alleged violations of federal and state law that were separate from just trying to collect a debt that was wiped out in bankruptcy.

The consumer alleged the debt collector violated state and federal collection laws by:

• Contacting the consumer at an unusual time or place or a time or place known or which should be known to be inconvenient to plaintiff in violation of 15 U.S.C. § 1692c(a)(1);


• Contacting the consumer directly after being advised that plaintiff is represented by counsel in violation of 15 U.S.C. § 1692c(a)(2);


• Contacting consumer after being notified to cease further communications in violation of U.S.C. § 1692c(c);
• Falsely representing the character, amount or legal status of the alleged debt in violation of 15 U.S.C. § 1692e(2);


• Failing to disclose in the initial written communication with the consumer that the debt collector is attempting to collect a debt and that any information will be used for that purpose in violation of 15 U.S.C. § 1692e(11); and


• Failing to issue an appropriate validation notice in violation of 15 U.S.C. § 1692g.

• Communicating with plaintiff repeatedly or continuously or at times known to be inconvenient to that person with the intent to harass or annoy the debtor in violation of Oregon Revised Statue 646.639(2)(e); and


• Communicating with plaintiff without clearly identifying the name of the debt collector, the name of the person, if any, for whom the debt collector is attempting to collect the debt and the debt collector's business address on all initial communications in violation of Oregon Revised Statute 646.639(2)(h).

Lenny Dysktra, New York Mets baseball player, and winner of the World Series back in 1986, recently filed bankruptcy* in Los Angeles, California. Famous people filing bankruptcy is nothing new.

* You can learn more about filing bankruptcy in San Jose at: www.e-bankruptcy.com

Athletes

Lenny Dysktra joins a growing list of other athletes who have sought a fresh start by filing bankruptcy, including: legendary football player Johnny Unitas; Boxers Mike Tyson, Leon Spinks and Joe Lewis; Professional tennis player Bjorn Borg; Olympic gold medalist Dorothy Hamill; and former Oakland A's baseball player, Jose Canseco.

It just goes to show a struggling economy affects all of us.

Many other talented people have filed bankruptcy in order to get a fresh start.

Musicians

Famous musicians that have filed for bankruptcy include Elton John, Tom Petty, David Cross, Toni Braxton, Meat Loaf, M.C Hammer (from Oakland, CA), Ted Nugent, Jerry Lee Lewis, Chaka Khan, Marvin Gaye, Andy Gibb and Vince Neil (of the rock band Motley Crue).

Television and Hollywood Celebrities

Several well known television and Hollywood celebrities have also obtained a fresh start by taking advantage of bankruptcy protection, including talk show host Larry King, and actors Kim Basinger, Mickey Rooney, Burt Reynolds, Gary Coleman, Lynn Redgrave, Margot Kidman and Lorraine Bracco. It just goes to show the California movie industry is not immune from tough financial times.

Politicians

Ulysess S. Grant (our 18th president) and William McKinley (our 25th president) both filed bankruptcy. It is obvious that for these great individuals bankruptcy was a new beginning, not a dreadful end, as some mistakenly believe.

Authors and Artists

Samuel Clemens, better known as Mark Twain, is just one of the famous authors on this list. Others include the creator of the Wizard of Oz, Frank Baum, Oscar Wilde, and even Walt Disney.

Businessmen

The list of famous people who filed bankruptcy is not limited to those without business or management skills. Actually, its quite the contrary. The list of famous business people who filed bankruptcy includes: Donald Trump, Henry Ford, H.J. Heinz, and Milton Hershey- the founder of Hershey's chocolate.
Now of course you want to avoid the problem Lenny Dykstra ran into and be as truthful as possible in filing your bankruptcy petition, and your financial dealings leading up to the bankruptcy filing.

Unfortunately for Lenny Dykstra, he was charged with a 13-count federal indictment on May 6, 2011, including one count each of bankruptcy fraud and obstruction of justice, four counts each of concealing property from the bankruptcy estate and making false declarations to the Bankruptcy Court, and three counts of embezzlement from the bankruptcy estate.

Federal prosecutors allege that after Dysktra filed for bankruptcy protection in July 2009, he looted his Sherwood Estates mansion, lied about who stripped the home and denied receiving money for having sold items that were owned by the Bankruptcy Estate.

It has been reported that an attorney hired by the bankruptcy trustee estimates that Dykstra stole and destroyed more than $400,000 worth of property in the estate.

All of the charges in the indictment carry a statutory maximum penalty of five years in federal prison, except for obstruction of justice, which carries a potential sentence of up to 20 years in prison. If he is convicted of all 13 counts in the indictment, Dykstra would face a maximum possible penalty of 80 years in prison, according to news reports.

Dykstra's bankruptcy case is still pending in U.S. Bankruptcy Court in the Los Angeles suburb of Woodland Hills, California.