When considering to file for bankruptcy, it is important to realize the positive impact this decision will have on your financial future. We will help you weigh the potential benefits of filing bankruptcy against the time it would take to rebuild your credit and pay back your debt. If you have lost your job, have high medical bills, or have accumulated more debt than you will be able to repay in the foreseeable future, then filing bankruptcy might be the best decision for you. In most cases, a bankruptcy will not cause you to lose your home or assets, and will help you enjoy a debt-free fresh start.
Our consumer advocacy division can assess your current financial condition and help you with any of your financially based legal problems. If bankruptcy is the right answer for you, then we can help you determine whether Chapter 7 bankruptcy or Chapter 13 bankruptcy would be the best choice. We offer our services for an all-inclusive flat fee and lay out all the terms of the service up front with NO hidden or surprise costs. We handle all stages of the bankruptcy process, from filing the petition, appearing at the creditor meeting, and making sure that all deadlines are met until the final discharge from the bankruptcy court. We also take over all communication with your creditors so the harassment stops immediately upon retaining our firm.
Filing for bankruptcy creates an automatic stay, which prevents creditors from harassing you about your debt. Once your bankruptcy is finalized by the court, your dischargeable debt is wiped away (Chapter 7) or put into a reasonable payment plan based on your disposable income (Chapter 13).
Dischargeable debts include:
- Credit card debt
- Medical bills
- Payday loans
- Tax debt from taxes filed at least 3 years prior to bankruptcy filing
Benefits of bankruptcy may include:
- Stopping wage garnishments
- Stopping creditor harassment
- Stopping foreclosure on your home (Chapter 13)
- Preventing repossession of your car (Chapter 13)
- Allowing a fresh start
- Wiping out unmanageable debt
- Halting Lawsuits
Contact our office today at (714) 617-8387 so we can evaluate your unique financial situation and the potential long-term benefits of filing for bankruptcy.
If you have been contacted by a creditor after your bankruptcy has been discharged, we can help you! Please call us immediately for a free consultation.
What is bankruptcy?
Bankruptcy is relief for consumers that is provided under a federal law, allowing them to have certain debts forgiven. This law is designed to help consumers who simply do not have the ability to meet their repayment requirements. The underlying philosophy of bankruptcy laws are based on forgiveness rather than punishment.
What is an “automatic stay?”
Once you file your bankruptcy petition, an “automatic stay” goes into effect. This stops creditors from trying to collect any debt from you while you are going through the bankruptcy process. Furthermore, the automatic stay stops creditor phone calls, letters, wage garnishments, lawsuits, and any other scare tactic used by creditors of debt collection agencies.
What is a “discharge?”
Once the court grants the bankruptcy petition, the consumer then receives a discharge from the court. A discharge is a legal release from debts stating all qualifying debt is forgiven. Creditors are no longer allowed to contact you or pursue any of the debts listed in the bankruptcy documents.
What is the difference between Chapter 7 and Chapter 13 bankruptcy petitions?
There are two ways for the typical consumer to file for bankruptcy. Chapter 7 is the most common type of bankruptcy, and it allows a consumer to discharge debts completely through a relatively short process as long as they make a certain income. Under Chapter 13 bankruptcy, a petitioner is given a chance to rearrange their financial affairs and repay just a portion of your debts. As a result, a Chapter 13 can also be used to stop foreclosure and bring you current on mortgage. Both Chapter 7 and Chapter 13 bankruptcy can help protect assets (including your home), give you leverage with creditors, and provide you with breathing room and a fresh start.
What is a Chapter 7 bankruptcy?
Chapter 7 is the most common type of bankruptcy. A discharge under a Chapter 7 bankruptcy discharges all qualifying debts, including but not limited to, credit cards, medical bills, repossessions and payday loans . In Chapter 7 bankruptcy, there is no repayment plan for unsecured debts. In most cases, the consumer keeps all of their property, which may include cars and/or real property. The process takes roughly 4-5 months to complete from filing to discharge, depending on the court’s caseload. While in bankruptcy, the consumer may reaffirm secured debts, such as a mortgage or car loan, in order to keep certain secured property after the bankruptcy is complete. The consumer must stay current on all secured debt payments throughout their bankruptcy in order to keep their property.
What is Chapter 13 bankruptcy?
Chapter 13 bankruptcy provides consumers with a court-approved repayment plan to repay creditors a portion of owed debt over a 3-5 year period. Chapter 13 bankruptcy is designed for consumers who make sufficient income to pay living expenses but are currently unable to meet all their obligations. In a Chapter 13 bankruptcy, monthly living expenses are calculated first, and any disposable income is used to pay towards outstanding debt. The plan is based on each consumer’s ability to repay their creditors. Chapter 13 bankruptcy is appropriate for consumers with assets over the exemption amounts, or non-dischargeable debts. Also, since a Chapter 13 sets up a payment plan, this can be used to bring a consumer current on a mortgage and save their home from foreclosure.
Do I have to sell everything I own under a Chapter 7 bankruptcy?
No. In most Chapter 7 bankruptcy cases, an individual does not have to sell anything they own to receive a discharge of their debt. Each state has a set of “exemptions” which is used to protect most, if not all, of a consumer’s assets throughout their bankruptcy case.
What is the “means test?”
In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Under the BAPCPA, Congress established new rules for individuals seeking to file bankruptcy. Among these rules was a test based on a mathematical formula, which is used for determining whether or not an individual qualifies for a Chapter 7 bankruptcy filing. Contact our office for more information on this formula and whether or not you qualify for Chapter 7 bankruptcy.
Do I lose my car if I declare bankruptcy?
Most individuals under Chapter 7 bankruptcy are able to keep their car and other personal property so long as they stay current on their mortgage or car loans. Again, each state has exemptions in place to protect most, if not all, of a consumer’s assets during bankruptcy.
Does bankruptcy discharge child support obligations?
No, child support obligations are not dischargeable in bankruptcy.
Are taxes dischargeable in bankruptcy?
Tax debt from taxes filed more than 3 years prior to the bankruptcy filing are dischargeable in Chapter 7, but will be paid off as part of a repayment plan in Chapter 13.