MKD LAW

Detroit is a city in ruin, subject to the fallout of an economic a-bomb.  Once the fourth largest city in the US containing the iconic leaders of the automotive and music recording industries, Detroit is now the modern day equivalent of Dresden; a burned out shell of its former existence.

Having lost half of its population to a modern day exodus, Detroit is now one of the poorest, most segregated, and most uneducated cities in the country.  In truth, it’s really kind of sad given its proud history.

Reeling from the financial fallout of a drastically diminished tax base, Detroit struggles to provide even minimal services to its citizens.  In response, residents began to celebrate Halloween by going out on the town…and setting fire to all of its abandoned, dilapidated buildings.  No, we’re not joking her folks.  Apparently, it’s absolutely true.

With a budget of $1.6 billion, Detroit is looking at a deficit of over $450 million.  In other words, unless the city completely redesigns its government, drastically cuts its finances, or suddenly finds a million middle class folks who want to live there, it will go literally bankrupt.

While many will not be surprised by Detroit’s financial situation, some will be surprised by the possibility of Los Angeles also facing bankruptcy.  L.A. currently has a deficit of over $500 million.  It’s problem, however, is slightly different then Detroit’s; rather than have a deficit as result of not enough people, L.A. has a deficit because too many people…as in too many contractually obligated, unionized employees.

L.A. has a decent economy, in as much as any city can have one during these tough times, but even a small dip in tax revenue has caused the city’s overblown payroll to come back and bite hard.  As a result of entrenched employee interests, the city now struggles to find areas of its budget to cut and is staring down the barrel of a bankruptcy.

The two stories above show how changing conditions can quickly affect one’s financial situation.  Washington State is facing a similar problem on many levels.  The current recession has dramatically impacted the state’s tax base and Olympia is facing a 2.9 billion dollar shortfall.

Many of our friends and neighbors here in Washington are facing a similar crisis on a personal level.  Washington bankruptcy filings continue to rise every month.  Whether you didn’t see trouble coming, weren’t able to respond quickly enough to changing market forces, or simply got laid off, times are hard and money is short.

If you and your family find yourself coming up short every month and struggling just to pay your rent, put food on the table, keep the electricity on, and put gas in your car, it may be time to consider getting a fresh start through a Washington bankruptcy.  Declaring bankruptcy is not for everyone, and there may be other viable options available. 

If you qualify, however, filing a WA State bankruptcy may just be your best option.  It can leave you debt free while also dramatically increasing your monthly cash flow, which will allow you to at least get by until our economy starts picking up again.

George Clinton is known as one of the most innovative funk musicians of all time. During the 70’s, he defined African American music while many of today’s iconic rappers and hip-hop artists were still in diapers.  Perhaps that is how Clinton became one of the most sampled musicians of all time and his name the prophetic embodiment of the last twenty years of American politics.

Or maybe he was just a really good musician.  I tend to think it’s the latter myself.

Anyways, one thing Clinton wasn’t good at was reading legally binding documents.  After a legendary run in the 70’s with the bands Parliament and Funkadelic, Clinton had to go solo as a result of complicated copyright and trademark issues associated with the band names.

To this day he struggles with old business partners and managers, who he claims, forged his signature to sign away all of the rights to his back catalogue.  Given that the music industry has a well developed a reputation of exploiting musicians, it’s hard fault Clinton for these problems, as it appears as if he was indeed victimized.

In 1984, however, when all of the mismanagement of his career forced Clinton to file bankruptcy, he made a mistake that dwarfed all others.  He failed to disclose every song between 1976 and 1983 as a possible source of income.

The result was catastrophic … an estimated loss of $100 million in royalties.  Blame for this lack of foresight can fall on both Clinton and his attorney; it is always important to maintain open communication between client and attorney.  Frankly, whomever his bankruptcy attorney was at the time should probably be disbarred.

You know, during these incredibly difficult times, more and more people find themselves behind the financial eight ball.  If you or someone you love lives in WA State and is struggling to meet their monthly obligations, it might be time to consider seeking protection under federal and Washington bankruptcy laws.

Despite what you may have heard, the new 2005 bankruptcy laws have actually done very little to prevent most people from still qualifying for bankruptcy relief.  If you have questions about your legal rights and bankruptcy options, you owe it to yourself to consult with a good Washington bankruptcy lawyer.

Declaring bankruptcy is always an uncomfortable choice.  Many of our Washington bankruptcy clients struggle to reconcile the decision with their naturally ingrained work ethic; even when they know that a bankruptcy is a legitimate chance to wipe the slate clean and start again, they still consider it a “failure.”

Sometimes, however, it is the only choice after a series of difficult choices.  Take Lorraine Bracco, for example.  What else is an actress who hasn’t acted in five years because of a protracted and very expensive legal custody battle going to do?  Like many of our WA State bankruptcy clients, she was completely out of options.

As another example, take Kim Basinger.  The reason Basinger went bankrupt is that she backed out of a verbal contract with Main Line Pictures and was ordered by a court to pay $8.1 million.

When hit with a suit like that, the court often takes into account personal assets.  That $20 million dollar community, sold for just over $1 million.  But don’t worry, Basinger was able to bounce back from her bankruptcy three years later when a little film called LA Confidential hit the theatres and earned her an Oscar.  That other film she backed out of, Boxing Helena, also won an award…Worst Director.

Many people end up filing for bankruptcy as a result of a large judgment.  If you live in WA State and have questions about whether or not filing for bankruptcy is a good way for you address your financial problems, it’s always best to consult with an experienced Washington bankruptcy attorney.

A good WA State bankruptcy lawyer is familiar with the bankruptcy code.  They should be able to determine in a relatively short period of time, and several hours at the most, whether or not you can qualify for bankruptcy under the 2005 revisions that introduced the means test.

In our experience, however, the overwhelming majority of people who could qualify for a Washington bankruptcy under the old laws, can still qualify today.  This is because the primary tenet of bankruptcy law remains the same.  If you have little no ability to pay your debts and obligations after you cover your bare minimum living expenses, the federal and Washington state bankruptcy laws are here for your protection. 

Despite a lot of press coverage touting the difficulty of filing under the new laws, the 2005 revisions did little to change this primary basis for seeking relief under the bankruptcy code.