Debunking Bankruptcy Myths and Stopping Lawsuits Cold with Sevan Gorginian

Oct 2, 2026 · @Pau

Cold open

[0:00] Sevan: Once an eviction, an unlawful detainer judgment, has been entered against the tenant, you no longer have any leasehold possessory rights. It’s been determined that the lease is terminated. So if you file bankruptcy after that, the bankruptcy will not stop the eviction, because you don’t have an interest in that leased apartment anymore. The sheriff can still come and kick you out.

[0:17 – 0:35 music]

Introduction

[0:35] Harry: Welcome to the Harry Handles It podcast. Today we have the awesome Sevan on, who is a premier bankruptcy lawyer and just an all-around awesome dude. Sevan, welcome.

[0:43] Sevan: Thank you very much. Thank you for having me, Harry.

[0:45] Harry: Can you tell our viewers a little bit about yourself and your practice, and dive into some of the myths of bankruptcy?

[0:51] Sevan: Sure. I’m a trust and bankruptcy attorney; those are the only two areas I practice in. It’s been fun, and challenging sometimes, because on the bankruptcy side I’m dealing with people at the end of their rope. They’ve tried everything, and then they come to me. It’s been very rewarding to be that knight in shining armor and help them through the most difficult part of their lives. The other day I was counting, and I think I’m in my 13th year.

[1:24] Harry: Wow.

[1:29] Sevan: Yeah, I know. Time flies.

I used to be at a big firm and dealt with the bigger bankruptcy cases, the Kmarts and Walmarts of the world. But my passion is consumers: regular individuals who lose their job, whose business closed, who are just going through a rough patch. My office is in Glendale, with a small staff of three. I don’t want to claim we’re number one, but on the bankruptcy side we’re definitely one of the busiest filing offices in the Central District. We file a lot of cases. That’s pretty much what I do.

The emotional reality of consumer bankruptcy

[2:10] Harry: I see the passion for your work, having known you all these years; we went to law school together. Your social media shows you actually care about the little guy at the end of the rope, and that resonates with me, because that’s what we do too. We represent people at the worst points of their lives, and everyone’s worst point is different. When clients come in and ask, “Is bankruptcy going to hurt me, or is this process going to help me get back on my feet?” what’s the journey you walk them through?

[2:40] Sevan: Very good question. The journey starts with the phone call. I train my staff on how to handle those calls, because it’s very important. You have to put yourself in the position of bankruptcy clients, as opposed to my estate planning clients. They have super-high anxiety and a lot of fear. People are trying to serve them, they don’t understand how lawsuits work, or they have a foreclosure notice in the mail.

I’ve been doing this a long time, and you can sense the anxiety on the call: the frustration, the sleepless nights, the fighting with a spouse. You can hear it in their breathing. So in my office we spend a lot of time on that initial call. I really believe in walking people through it and calming them down. I never believed in an answering service that just says, “Thank you for calling the law office, we’ll give you an appointment.” That’s not what bankruptcy clients are looking for. They want to talk to me or my staff: “What do I do? I’m at the end of my rope.”

It’s rare for attorneys to be on the initial call, but I’ll talk to them: “Hey, how’s it going? Tell me what’s going on.” And I can’t tell you how many times I tell them not to worry. Someone knocked on your door? Don’t worry about it; just take the paper, because process servers will keep coming back. You got a letter saying they’re going to garnish your wages? Don’t worry; the garnishment will stop.

After that initial call, you can sense their anxiety and fear calming down. Then we schedule them and tell them what we need and what they have to do. I have a very streamlined process in my office. We get them on track, and eventually they come to see me.

Managing high-anxiety clients and breaking the tension

[4:36] Sevan: Sometimes when they come in, they think they’re going to see this big, famous bankruptcy attorney they read reviews about. My office has a great ambiance, and I usually just start cracking jokes, because that’s what I do. If I see tattoos, I’ll talk about the tattoos. If I notice an accent, I’ll ask about it. They think they’re here to sign papers, but I’m genuinely curious and want to learn about people.

I’m very calm by nature, and a few clients have told me, “Your calmness calms me down.” One client asked, “How are you so calm?” I looked at him and said, “Because I just took a 20-milligram edible right before you came in, and it’s kicking in.” They look at me like, “Wait, is this guy serious?” Then I say, “No, man. I just know how to help you. Don’t worry. I’m calm by nature.” It’s a way to ease the tension.

I also really like learning about my clients. I’ve learned so much about people’s journeys and where they come from. My office is very quiet because noise really bothers me. One time I was sitting with a client and kept hearing a ticking sound. It was driving me nuts. I thought someone outside was tapping a pen, or it was the air conditioning. Finally I asked him, “Do you hear that ticking?” He said, “Yeah, that’s the pacemaker in my heart. That’s why I’m alive. Everyone can hear it. If you put your hand on my shoulder, you can feel it.” So I got up, put my hand on his shoulder, and you could feel it ticking. I thought it was the coolest thing. And then he told me the journey he’d been through with his heart.

Another client’s family immigrated from Iran. His father was severely depressed and took his own life at home, and the client had to get his sister out of the room before she saw it. The stories of the people I deal with can be really traumatizing. Early in my career, it really affected me. Like most people, I absorb emotions; I’d go home thinking about people’s finances. Eventually I learned to deal with it. But I love what I do.

Aggressive debt collector tactics and legal limits

[7:39] Harry: Work isn’t easy, and it’s the same for us. People come to us saying, “I’m injured. I can’t walk or work. Help me.” It’s tough. But isn’t it the most rewarding thing to give somebody another chance?

[7:54] Sevan: Exactly. You give them a fresh start. Once the bankruptcy is over, I tell them, “All the debts are gone. The phone calls stopped. The harassment stopped.” Debt collectors can be really nasty. I’ve called a few of them to say, “You can’t say things like that on the phone.” They’ll literally tell people their brother can be arrested. They find phone numbers of family members and call them.

[8:21] Harry: That’s nuts.

[8:25] Sevan: And they’re not allowed to. They call people at work. Imagine someone calling your office: “Hi, this is a debt collector. We’re here to collect an American Express debt for Harry. Is he in?” Now everybody knows. They threaten people with jail time, tell them they can be arrested, or that their visa will be affected if they try to leave the country. It’s nuts.

PMSI liens: what store credit cards actually own

[8:52] Harry: Have you found that some creditors are worse than others in how aggressive they are with collections?

[8:58] Sevan: Yes. There’s one collection firm, attorneys, that I’d rather not name, but they’re on the more aggressive side. Then there are retailers. Sometimes people don’t understand the transaction that’s happening. If you buy a Rolex from a jeweler like Daniel’s Jewelers or Zales, or something from Best Buy, and finance it through them, they have a lien on that item. It’s called a PMSI lien, a purchase-money security interest. The Rolex doesn’t belong to you until you pay off Zales, or whatever creditor or Best Buy credit card you used.

So if you don’t pay and you file bankruptcy, they’re allowed to come collect their collateral. They’ll call and say, “Fine, but we want to come get the Rolex.” If the person says, “I gifted it to my niece,” or “I sold it,” the creditor considers that conversion or fraud: “You stole our collateral.” Whenever you buy a TV from Best Buy using Best Buy’s credit card, it’s not yours until you pay it off.

Usually I’ll call their bluff: “Sure, go pick up the TV. It’s available.” One time a client had fixed up his entire house with a Home Depot card: paint, lumber, an ADU, whatever. Same idea. Home Depot’s attorney called me: “We got the bankruptcy notice, and we want to repossess the collateral.” I said, “Okay, we can arrange that. Do you know what he bought?” He said, “Yes, we have the receipts.” I said, “So you want to remove the paint from the walls?” And he said yes, they wanted to take a look at the paint and the lumber. I was calling his bluff and he was trying to bluff me. So I said, “No problem. I’ll talk to my client and we’ll arrange a time for you to collect the paint on the wall.” It just didn’t go anywhere. My bluff ended up being the bigger bluff.

Going back to what people think: they assume they can get a TV from Best Buy or jewelry from Zales, not pay, and file bankruptcy. That doesn’t work very well.

[11:16] Harry: So those creditors are a bit more aggressive because it’s essentially their collateral. Makes sense. I didn’t know those transactions were structured that way, and I’m sure most consumers don’t either.

[11:25] Sevan: They don’t, because nobody reads that long receipt. And when you sign up for the Best Buy credit card, it says Best Buy has a lien on any items you purchase until you pay off the card. That’s the PMSI lien.

Personal injury claims vs. corporate bankruptcy

[11:39] Harry: How have you seen bankruptcy interact with companies that file, whether they’re restructuring or liquidating, when they have insurance in play that might provide some relief to people with claims?

[11:52] Sevan: I get calls from personal injury attorneys: “The 99 Cents Only store filed bankruptcy, but I have a slip-and-fall case against them,” or Rite Aid, or whoever. I walk them through how these larger corporate bankruptcies work, but to cut to the chase, I tell them they’re screwed. Your only recovery is against the insurance, not against the company, and that policy is limited. There’s a hierarchy of who gets paid, and a slip-and-fall case in Glendale is at the bottom of the line.

And once the bankruptcy is filed, you can’t continue any collection or prosecution against the company. If you want to be paid from the bankruptcy, you need to file a claim, a document saying you’re owed a certain amount. But you don’t know how much you’re owed, because your client’s case was still pending and is now paused. You don’t have an ascertainable dollar amount. To get that number, you have to ask the bankruptcy court for permission to proceed for the sole purpose of getting to trial and determining the judgment amount.

Say you finally get an ascertainable amount: $920,000 in damages for your client. Great. Now you file that in the bankruptcy case, and they’re paying 2% on unsecured debts. So you get 2% of that amount. Is it worth getting permission to continue? Unfortunately, the attorneys I talk to usually say they’ll cut their losses. If there’s sufficient insurance set aside, you’ll be paid from that, but recovery is still going to be limited.

[13:44] Harry: With 99 Cents Only, I know most of their stores have a big self-insured retention before any insurance kicks in. So if they’re in bankruptcy and can’t meet the self-insured retention, the insurance doesn’t kick in at all in that scenario, right?

[14:03] Sevan: Right. And there are many more people involved now. If you call the insurance agent, they’ll tell you to call the company’s bankruptcy attorney. You’ll be dealing with counsel for the company, and if they’re out of state, say in New York, they’re just going to blow you off. They’ll say, “Remember to get permission from the bankruptcy court and file a claim.” They won’t be very helpful, because in a bankruptcy there’s a hierarchy of who gets paid. Secured creditors, meaning liens against assets, are paid first, then taxes.

I hate to say it, but there are a lot of more important people, including landlords, because they’re trying to keep the company’s assets in business. They’re focused on dealing with landlords, vendors, and employees. Unfortunately, Harry’s slip-and-fall case in Glendale is at the bottom of the totem pole. They have bigger things to worry about to keep the store alive, so they’ll brush you off.

Stopping trials instantly: the power of the automatic stay

[15:05] Harry: That’s important to know, because a company can trigger this tool at any time. A case can be pending for two years, and a day before trial you suddenly have to deal with this. I think I saw in one of your posts that a client was set for trial that day, your office served the other side with the bankruptcy filing, and that stayed it.

[15:24] Sevan: Yeah. Some of the most vulgar language I hear over my speakerphone comes from business or civil plaintiff attorneys who get the bankruptcy notice from me by email. Usually the defendant is my client: a business, an individual, or a business partner who was sued. As you know, Harry, getting to trial doesn’t take two months. It’s “come back in 2028 for a status conference.” These attorneys have been doing discovery for a long time: documents, mediation, pretrial. Eventually they get to trial, and the second a bankruptcy is filed, everything has to stop immediately. You can’t do anything.

I’ve had it where trial starts the next day, we file, and I email plaintiff’s counsel: “A bankruptcy has been filed. Please notify the court tomorrow morning that trial has to be stayed. Here’s a copy.” Then I get a phone call from, say, Sheppard Mullin: “Good morning, is this ‘Seven’?” I say, “Yeah, it’s pronounced Sevan, not Seven. How can I help you?” “I got your email.” Nothing against Sheppard Mullin, they’re very smart people, but I get a lot of flak when that happens.

I typically don’t do it intentionally. It’s because the client waited so long. They realize, “We’re going to lose,” and decide to file bankruptcy. I don’t do it to be a jerk. I don’t know if we can say bad words on the Harry Handles It podcast.

[16:46] Harry: Say whatever you want.

[16:53] Harry: But it’s a tool that’s available at any time, and the client can decide to use it whenever they want, right?

What bankruptcy protects, and what it can’t stop

[16:59] Sevan: Right. It’s a very powerful tool. It stops lawsuits, foreclosures, and wage garnishments. But there are things it doesn’t stop. Criminal cases are not stayed. A more random one: family law cases involving paternity determinations are not stayed. I had a client who had to take a test to determine whether he was the father, and I told him bankruptcy won’t stop that. Criminal matters and family law matters aren’t stopped. But evictions, collections, judgments, credit, and debt are.

Sometimes people call me about evictions. Once an unlawful detainer judgment has been entered against the tenant, you no longer have any leasehold possessory rights. The lease has been determined to be terminated. If you file bankruptcy after that, it won’t stop the eviction, because you no longer have an interest in that apartment. The sheriff can still come and remove you.

[17:59] Harry: But the bankruptcy can solve the money judgment for the balance, right?

[18:03] Sevan: Yes, of course. It’ll stop that. The other thing people forget, and I know it sounds obvious, is that bankruptcy only applies to the person filing, not anyone else. Sometimes people have co-signers, or a business partner who co-signed, or a business debt with a personal guarantee. I tell them, “Your business partner is going to get sued. Your business is going to be served. Your bankruptcy doesn’t protect your business; your business is not in bankruptcy. You filed bankruptcy.” Eventually someone smart will serve the business partner, and now the partner is angry at you because they’re coming after him.

[18:42] Harry: That’s how the cookie crumbles.

[18:45] Sevan: Exactly. That’s kind of a typical story of how my day goes.

Using AI in a law practice

[18:52] Harry: That’s awesome. Are you using any AI tools in your practice to improve client service or even the legal work?

[19:02] Sevan: Not for the client process; I have my own streamlined process for that. But I use Google’s Gemini, the advanced enterprise version, for myself: legal research and drafting documents. It’s amazing. It’s a wild tool we have now. Sometimes I get long emails from opposing counsel, and I’ll plug them in and ask it to draft a semi-polite response. Sometimes I’m so tired I just don’t want to think anymore. It’s weird; AI is kind of taking away our brain power, but whatever.

[19:44] Harry: I don’t mind it a bit. It helps with the mundane stuff. Why waste brain energy trying to be nice when someone’s obviously trying to trigger you? Something else can do it for you.

[19:59] Sevan: Exactly.

Where to connect with Sevan

[20:02] Harry: This was an awesome conversation. Sevan, can you tell our viewers how they can find more information about you and your practice, and hire you for protection? Not only bankruptcy protection, but wills and trusts too, because that’s also protection.

[20:14] Sevan: Exactly. Bankruptcy and trusts are all I do. My Instagram handle is @bk_trust_lawyer. I came up with that myself, so I’m proud of it. What else was I going to write, “Glendale fat funny attorney”? My wife always tells me to stop joking about my weight, but I find it funny.

[20:34] Harry: As a big guy myself, I agree. Self-deprecation is the best form of humor.

[20:39] Sevan: Yeah. I’m online, and my office is in Glendale. My website is my last name: gorginianlaw.com. People can just Google me; I’m pretty easy to find.

[20:47] Harry: If you need a bankruptcy lawyer, Sevan’s the guy. Give him a call. And for any other lawyers out there, whether it’s a bankruptcy complication, a personal injury case, or anything else, Sevan has definitely helped us along the way, and I’m sure he can offer insight on your case too.

[21:05] Sevan: Thank you very much.

[21:06] Harry: Thanks for being on.

[21:07] Sevan: Thank you for having me.

[21:10 music out]