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November 24, 2010

Famous Chapter 9 Bankruptcies

A San Jose bankruptcy attorney comments on a famous Chapter 9 bankruptcy involving Orange County.

One of the most famous Chapter 9 bankruptcies in the U.S. occurred on December 6, 1994 in Orange County, California. It was the largest county ever to declare Chapter 9 bankruptcy. The county suffered losses of about $1.6 billion in wrong-way bets on interest rates in one of its investment pools. This pool was supposed to be a profitable way to manage the county's cash. Instead of helping the community prosper, it pulled them into financial failure.

In 1994, Robert Citron was the county's Treasurer. During the early 90's, interest rates were very low. This made the investment pool an attractive idea due to its good rate of return. These types of good returns were much riskier than similar cash management pools. Citron controlled the $7.5 billion pool. He had riskily invested the pool's funds into interest linked securities. His strategy depended on short term interest rates remaining low. Unfortunately, the Federal Reserve Bank raised interest rates in February 1994. This caused the Orange County investment pool to dramatically decrease. Citron ignored the shift in interest rates, therefore sending Orange County into financial distress.

If you would like more information on this topic or other bankruptcy topics, please contact our San Jose office at 408.279.2288 or 1800.941.6730. We at Sagaria Law can connect you with one our our experienced San Jose bankruptcy attorneys. We have bankruptcy attorneys located throughout California and Oregon to assist you with your bankruptcy questions. If you need assistance regarding a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, a cram down, stopping a foreclosure or wage garnishment, asset protection, discharging debt, etc. we can help! Please contact us to receive a free consultation or visit our website at www.sagarialaw.com to request an in-person consultation with an experienced bankruptcy attorney. We have an exceptional team of bankruptcy lawyers, bankruptcy client care specialists and bankruptcy staff supporting San Jose.

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November 4, 2010

On Municipalities Bankruptcy

A San Jose bankruptcy attorney comments on Chapter 9, municipalities bankruptcy.

A municipalities bankruptcy is something that should be taken very seriously. The people who work in a place like Harrisburg, Pennsylvania realize that the city itself may have to file bankruptcy itself soon. A municipalities bankruptcy can lead to a definite decrease in the amount of services that w city will be willing to offer. You do see municipalities having to lay workers off following a bankruptcy reorganization.

The reorganization process is something that many cities are having to struggle with because they realize that such news may make it unlikely for new people to move into their city. We are seeing a number of cities in the state of California have to go through the chapter 9 bankruptcy process. The bankruptcy could be caused by the fact that the state of California may not have the most sound budget plan from a state perspective as whole.

New regulations regarding waste water treatment facilities and the Environmental Protection Agency may cause some other municipalities to end up going through a chapter 9 filing. The hope is that the EPA rulings can be delayed so a city can properly manage their finances and plan ahead for ways to take care of the waste water treatment projects.

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Posted In: Chapter 9

October 27, 2010

Who Is Eligible To File a Chapter 9 Bankruptcy?

A San Jose bankruptcy attorney answers a visitor submitted comment: Who Files Chapter 9 Bankruptcies?

Chapter 9 bankruptcy can only be filed by municipalities that are in trouble and cannot pay their debt load. When a municipality files chapter 9, it allows them a chance to restructure their debts and find better repayment options while getting back on their feet. There are several causes that can force a municipality into bankruptcy:

• Budgeting got out of control
• A horrible tragedy or natural disaster accrued
• A severe recession or depression

The municipality's attorney files chapter 9 bankruptcy protection with the state as a last resort for protection of debt collection from creditors. The municipality is then allowed to come up with a place for repayment. This plan reduces the debt load by one or all of these methods:

• Reducing the debt load
• Reducing the interest rates
• Extend the terms of the loan
• Or refinance the amount owed

Creditors are not allowed to submit a plan, only the municipality, for a judge to sign off on. Filing for chapter 9 is used as a last resort and to help a municipality come back from trouble with minimal disturbance to its citizens.

We can answer all your questions regarding filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. If you need help regarding a bankruptcy in San Jose, call us at 408.279.2288 or 1800.941.6730 and we will be more than happy to offer you a free consultation over the phone. You can also fill out a free online evaluation at our website, www.sagarialaw.com, or request a free face to face appointment at a Sagaria Law office location close to you. We have bankruptcy attorneys located throughout California and Oregon to assist you with all your debt resolution needs.

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Posted In: Chapter 9

July 13, 2010

Famous Chapter 9 Bankruptcy

A San Jose bankruptcy lawyer makes note of a famous Chapter 9 Bankruptcy

Chapter 9 bankruptcy is only available to municipalities. Since its creation in 1934, there have been several famous Chapter 9 bankruptcy filings. The most recent and famous Chapter 9 bankruptcy was Vallejo, California’s filing in 2008. Vallejo was faced with decreasing tax revenue, rising pension costs, and strong public-employee unions. Two years later, Vallejo is now emerging from its bankruptcy, unfortunately not much stronger than its pre-filing status.
Other famous Chapter 9 bankruptcies include Orange County, California in 1994 and Desert Hot Springs in California due to lousing a housing discrimination lawsuit. Prichard, Alabama is another famous Chapter 9 bankruptcy premised upon its inability to fund its pension plans. Topping the list of weird famous Chapter 9 bankruptcy filings would include Moffett, Oklahoma, which was forced to file for Chapter 9 bankruptcy due to its inability to issue or enforce traffic tickets.

If you have questions regarding Bankruptcy in San Jose please contact us at 408.279.2288 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Jose Bankruptcy Attorneys. After you have spoken with one of our downtown San Jose bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of San Jose Bankruptcy Lawyers can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Jose and the South Bay!

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Posted In: Chapter 9

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