Frequently Asked Questions about Bankruptcy

Listed below are a number of frequently asked questions I often hear from clients.

1. Can a Chapter 7 or 13 Bankruptcy Help Me? It is Very Possible.

A Chapter 7 bankruptcy is a proceeding where you are allowed to simply get rid of your debts. If you have little disposable income (income left over after paying necessities every month) and if you own little property, you will often be allowed to get rid of your debts without losing anything.

A Chapter 13 bankruptcy is where you are allowed to re-organize your existing debt into a payment plan you can afford even if you have disposable income and extensive property. This type of bankruptcy is especially important if you are facing foreclosure on you home.

2. Can I file a California Chapter 7 or 13 Bankruptcy?

If you live, have a business, or have property in California, and have had for the last 180 days, then you likely can file for Chapter 7 or Chapter 13 Bankruptcy in California.

And generally speaking, if you have not filed a Chapter 7 bankruptcy in the last 8 years and you find yourself coming home to pay your monthly living expenses (your food, utilities, etc.) but have no money left over for your creditors, you’re likely eligible to file a Chapter 7 bankruptcy.

And regardless of past bankruptcies, you can almost always file a Chapter 13 bankruptcy to re-organize your debts and save your property.

3. What bills can I eliminate?

  • Virtually ALL BILLS can be eliminated in a Chapter 7 Bankruptcy. But, there are a few exceptions such as
  • Student Loans
  • Spousal or Child Support
  • Recent Taxes
  • Criminal Fines, penalties
  • Debts incurred through fraud
  • Debts incurred as a result of driving drunk, and some others.

4. Why should I file?

Most commonly because you have suffered a loss of work or business, been injured, are getting divorced, have lost all the value in your home, had cars repossessed, have large medical bills, or have just gotten in too deep with debts and credit cards.

5. What are the benefits of filing a Bankruptcy?

A Chapter 7 or 13 Bankruptcy will

  •  Stop wage garnishments
  •  Stop foreclosure
  •  Stop the creditors from calling and harassing you.
  •  Stop a lawsuit.
  •  Stop collections on car repossessions.
  •  Stop collections on debts that you cosigned.
  •  Stop collection on your personal debts.
  •  Stop collection on a judgment against you.
  •  Stop and possibly remove liens on your home or furnishings.
  •  Remove 2nd Mortgages from your home.

6. But I am married, I don’t want my spouse to have to pay for my debts.

That’s fine, in many instances you can file by yourself.

7. But I am afraid, I do not want to lose my job or go to jail.

You wont. Your employer is not allowed to discriminate against you for filing bankruptcy and you just can not ever go to jail as a result of filing bankruptcy.

8. Well, what about my home, car, and personal belongings?

In most instances, depending on how much “equity” you have in your home and car, you can keep these items. California Law allows you to keep a certain amount of reasonably necessary property including things like your home, car and personal belongings. A trained bankruptcy attorney can easily evaluate your assets and give you an immediate answer as to property at risk.

9. Will I be constantly in Court and having to take time off work?

NO! You will be required to attend one brief Court appearance. In usual cases this appearance, called the “First Meeting of Creditors” lasts just a few minutes (that’s right minutes!). Generally this appearance will be your last.

10. Won’t Bankruptcy ruin my credit?

NO! Remember, “credit” is only a term indicating the measure by which we are capable of borrowing money. Chances are, if you are reading this, you are not able to borrow anyway. Your credit is poor or in a state of ruin already. As the saying goes, there is only one direction to travel from the bottom of the bucket. Furthermore, more and more, the credit industry is recognizing that those who have filed bankruptcy are actually good borrowing candidates. Why? Because they have no debt, they have money available, they can not file bankruptcy again for 8 years. Don’t simply believe that your credit will vanish after bankruptcy. This is not generally the case.

11. How can LAW-PRO-9, P.C. help me?

As an attorney, I have literally handled thousands of bankruptcies in California. It is my goal to provide a painless and reassuring trip through the entire Bankruptcy process, from beginning to end. You won’t be stuck with just a paralegal. You won’t go to Court alone. You will have your questions answered. You will be able to talk to me by simply picking up the phone. And you can be assured that your property will be protected as much as the law will allow.