All posts in Legislation

Dear constituency list members of the Insolvency Law Committee (“ILC”), the following is a legislative summary of interest to insolvency practitioners and professionals:

California Assembly Bill AB 929 became effective on January 1, 2013, increasing personal property exemptions under California Code of Civil Procedure (“CCP”) sections 703 and 704 and impacting the homestead exemption as set forth below:

Under AB 182 (2003), a bill developed through coordination between the California Law Revision Commission and the Insolvency Law Committee, the process of increasing exemptions as to personal property under CCP §703.140, the so-called “wild card” set of exemptions, was removed from the political process through application of a first-of-its kind automatic triennial cost-of-living adjustment set by the annual California Consumer Price Index to keep pace with inflation. See CCP §703.150. Increases in the homestead exemption in real property were not part of this automatic adjustment process.

AB 929, a bill sponsored by Assemblyman Bob Wieckowski, a long-time member of the National Association of Consumer Bankruptcy Attorneys, finally ties the homestead exemption to inflation and the increasing cost of home ownership. On April 1, 2013 (and every three years thereafter) the Judicial Council is required to submit adjusted homestead exemptions based on the change in the annual California Consumer Price Index to the Legislature.

AB 929 modifies CCP §704.730 so that the maximum income threshold is increased (from $15,000 to $25,000 if single and from $20,000 to $35,000 if married) for persons 55+ years of age to be eligible for the $175,000 homestead exemption.

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BY JANN SWANSON
Foreclosure Activity Drops Sharply Thanks to New California Law

Foreclosure activity in much of the nation now appears to be accelerating downward, dropping 7 percent in a single month according to RealtyTrac. Foreclosure filings nationwide – default notices, scheduled auctions, and bank repossessions – numbered 150,864 or one in every 869 U.S. housing units in January compared to 162,511 in December. This was a 28.5 percent decrease from January 2012. Foreclosure starts were down 11 percent from December and 28 percent compared to a year earlier and at the lowest level since June 2006. Bank repossessions or REO dropped 5 percent from the previous month and were down 24 percent from January 2012 to the lowest level since February 2008.

While overall activity was down in most states, the size of the national decline can be traced to California where a new law caused a 39.5 percent decrease in filings from December to January making it the first time since January 2007 that California did not have the largest number of filings in the country. RealtyTrac Vice President Daren Blomquist said the new legislation that became effective on January 1 profoundly altered the U.S. foreclosure landscape. “Dubbed the Homeowners Bill of Rights, this legislation extends many of the principles in the national mortgage settlement – including a prohibition on so-called dual tracking and requiring a single point of contact for borrowers facing foreclosure – to all mortgage servicers operating in California. In addition the new law imposes fines of up to $7,500 per loan for filing of multiple unverified foreclosure documents. As a result, the downward foreclosure trend in California accelerated into hyper speed in January, decisively shifting the balance of power when it comes to the nation’s foreclosure activity.

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Dear Members of the Commercial Law and Bankruptcy Section of the Los Angeles County Bar Association:
Have you ever had occasion to think, “This statute would work better for me and my clients if it said/did  ____ instead”?  This email will describe how you can become involved in effecting changes to California statutory law.

Each year, the Conference of California Bar Associations holds an annual Conference of Delegates in coordination with the State Bar Annual Meeting.   The Conference of Delegates meets to consider and adopt resolutions recommending potential revisions to California statutory law to the California legislature.  The 2013 Conference of Delegates will be held October 11-13, 2013 in coordination with the 2013 State Bar Annual meeting in San Jose.

Each year, the Los Angeles County Bar Association sends a Delegation of LACBA Members to the annual Conference of Delegates.    The 2013 LACBA Delegation will meet during August in advance of the Conference of Delegates to consider and refine resolutions that may be proposed to the Conference of Delegates.  The LACBA Delegation’s August pre-conference meetings are approved for MCLE credit, so participation in the Delegation’s work is an opportunity to be involved with the legislative process, healthy debate, and get MCLE credit.  For more information, visit www.lacba.org/delegation.

In 2012, nine LACBA resolutions were passed by the Conference, and five others were actively negotiated by LACBA to pass in improved amended versions. Four LACBA resolutions from 2008 through 2010 were placed with bill authors, succeeded in the California Legislature and have been chaptered into law, and another three through 2011 are pending.

The Bylaws of the LACBA Delegation provide that each Section may designate a representative as an automatic appointment to the LACBA Delegation.  However, the Bylaws provide further that each such designee must express an interest in serving on the delegation by virtue of having completed an application.   If you wish to serve as a member of the LACBA Delegation to the 2013 Conference of Delegates, please complete, sign and submit the attached application to LACBA in accordance with the instructions on the application form.  If you wish to serve as the Section’s designee, please submit your application and send a copy of the submitted application to me for my receipt on or before March 19, 2013.  The Executive Committee of the Section will select the Section nominee at the Committee’s March 21, 2013, meeting.

Please note that Section designees and all other members of the LACBA Delegation are individually responsible for all expenses incurred as a delegate. LACBA funds may not be used to reimburse volunteers for participation in the Conference of Delegates.

If you are interested in submitting a potential resolution for adoption by the Conference of Delegates, you must send the resolution to Grace Danziger at gdanziger@lacba.org  by January 25, 2013.  See the attached instruction for information on how to format a resolution.

Brian Holman
Section Chair

Click Here for additional information.

The Judicial Conference Committee on Rules of Practice and Procedure is asking for comment on the first proposed modernization of bankruptcy forms in two decades. The revised forms, published for comment, are all used by individual debtors and include the fee waiver and installment fee forms, income and expense forms, and the means test forms, replacing previous forms. The comments, submitted by the public, will be reviewed in coming months and will be used to fine-tune the forms.

There were over 1.2 million non-business bankruptcies filed in federal courts in the 12-month period ending September 30, 2012, where the debts were predominantly personal or consumer in nature.

Read the full article here.

Dear California NACBA member:

In case you had not heard, California Assembly Bill 929, took effect on January 1, 2013, increasing certain exemptions available to bankruptcy debtors under CCP Sections 703 and 704.  This legislation was introduced by Assembly Member Bob Wieckowski, who is also a long-time NACBA member.  We have learned that Rep. Wieckowski has been named the Chairman of the Assembly Judiciary Committee in the legislative session which began on December 1, 2012, and NACBA looks forward to working closely with him in this session to address further revisions needed to CCP 703 and 704.

Here are some highlights of California Assembly Bill 929:
. Increases the dollar amount of the exemptions for various categories under CCP 703.140(b)
. For the personal injury exemption under CCP 703.140(b)(11) (D), eliminates the exclusion for pain, suffering and actual pecuniary loss
. Expands the motor vehicle exemption under CCP 703.140 (b)(2) to one or more vehicles
. Increases the maximum income threshhold for persons 55+ years of age to be eligible for the $175,000 homestead exemption under CCP 704.
. Beginning April 1, 2013, and every 3 years thereafter, requires the Judicial Council to submit to the Legislature the amount by which the homestead exemptions may be adjusted based on the change in the annual California Consumer Price Index

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Hello, Happy Holidays

Please see the link below; it is a link to ConsumersUnion, and contains what I think is an excellent summary of the law about to take effect.  I assume the lenders have prepared & are preparing new forms for this, such as foreclosure notices & denial of loan modification applications. I also assume this is going to have an impact on the bankruptcy filings; it will likely slow them down for a month or so. And, for oppositions to motions for relief from the stay, if I were a debtor’s attorney I would include a copy of the loan mod. application (although getting a copy may be much easier said than done).

For creditors, as the attorney for the lender I would ask for copies of all letters denying any & all loan mod applications so to be prepared for the debtor who says he or she never received it. You just know that is going to be part of an opposition to the motion for relief from the stay.
http://www.consumersunion.org/pdf/CA_Homeowner_Bill_of_Rights_Summary.pdf

—

David Brian Lally, Esq.
Law Office of David B. Lally
8001 Irvine Center Drive, Suite 1090
Irvine, CA 92618

Governor Brown signed three significant foreclosure bills into law:

AB 2610 (Skinner) – Extends the federal 90-day notice protection to all tenants in foreclosed properties, not just bona fide tenants. The bill also enacts the PTFA’s lease protections into state law but places the burden of proof on who qualifies for lease protections on the landlord. The newly enacted law also reforms the eviction process to better ensure that foreclosed tenants can assert their rights in post-foreclosure eviction actions.

SB 1191 (Simitian) – Requires landlords in 1-4 unit properties to disclose a notice of default (foreclosure) to prospective renters. Disclosure must be made in the six most frequently used languages in California. If the landlord fails to make the necessary disclosure, the tenant may ether (1) void the lease and recover all pre-paid rent plus additional damages or (2) elect to remain in the home and deduct one month’s rent from future rent obligations.

AB 1599 (Feuer) – Requires foreclosure notices (notice of default and notice of trustee sale) to include summaries in the six most frequently used languages in California listed in Civil Code 1632. This law will take effect on April 1, 2013 or 90 days after the Department of Consumer Affairs issues the translations, whichever is later.

The text of the bills is linked above.  The tenant bills will take effect on January 1, 2013.

Best,

Magdalena Reyes Bordeaux
Senior Staff Attorney
Public Counsel
mbordeaux@publiccounsel.org