I’m Here to Help You
I hope to answer some of your questions. If you would like more information or wish to set up a free initial consultation with me, you may call our office at (916) 780-7080 or contact us online to discuss your situation & solutions. I look forward to helping you.
We are a debt relief agency. We help people file bankruptcy under the bankruptcy code.
Yes! Many people believe they cannot own anything for a period of time after filing for bankruptcy. This is not true. You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after filing for bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.
No. However, bankruptcy is complex. A bankruptcy lawyer is well worth the cost. You will save the cost of the legal fees many times over through peace of mind, relief of stress and probably actual money saved in following your bankruptcy attorney’s advice.
The bankruptcy laws do not prevent you from getting credit immediately. Getting credit will depend on individual lender’s requirements.
Bankruptcy stays on your credit report for ten years. It becomes less significant the further in the past the bankruptcy is. The truth is that you are probably a better credit risk after bankruptcy than before.
A number of banks now offer ‘secured’ credit cards where a debtor puts up a certain amount of money in an account at the bank to guarantee payment. Under current FHA underwriting standards, two years after a bankruptcy discharge, debtors are eligible for mortgage loans on terms as good as those of others with the same financial profile who have not filed bankruptcy. The size of your down payment along with the stability of your income will be much more important than the fact you filed bankruptcy in the past.
The Bankruptcy Abuse Prevention and Consumer Protect Act of 2005 that went into effect on October 17, 2005, added new requirements for both Debtors and Attorneys. However, the new law still allows debtors to obtain financial relief and the fresh start that they need.
Prior to filing bankruptcy: You must receive credit counseling and obtain a certificate stating that you have done so prior to filing a bankruptcy.
The bankruptcy process: More documentation regarding income and taxes is mandatory. Perhaps the most misunderstood new requirement is the “means test”. The means test is a formula by which a determination is made based on household income and expenses whether a debtor is qualified to file a Chapter 7 bankruptcy or whether a reorganization under Chapter 13 is required.
After filing bankruptcy: You must complete a mandatory debtor education course in personal financial management as approved by the U.S. Trustee. I will arrange for this credit counseling as part of my service.
Bankruptcy can give you a fresh start.
It will stop nagging creditor calls, foreclosures, auto repossession, wage garnishment
and potentially resolve IRS debt.
Bankruptcy cannot, however, cure every financial problem, nor is it the right step for
every individual. In bankruptcy, it is usually not possible to:
- Eliminate certain rights of “secured” creditors. A “secured” creditor has taken a
mortgage or other lien on property as collateral for the loan. Common examples are
car loans and home mortgages. You can force secured creditors to take payments
over time in the bankruptcy process, and bankruptcy can eliminate your obligation to
pay any additional money if your property is taken. Nevertheless, you generally
cannot keep the collateral unless you continue to pay the debt. As a general rule, if
you want to keep your possessions, then you must continue to pay for them.
- Discharge types of debts singled out by the bankruptcy law for special treatment,
such as child support, alimony, student loans, court restitution orders, criminal fines,
and some taxes.
- Protect cosigners on your discharged debts. When a relative or friend has cosigned a
loan and the consumer discharges the loan in bankruptcy, the cosigner may still have
to repay all or part of the loan.
Chapter 7 is officially known as “liquidation”. Many people think of Chapter 7 when they talk about bankruptcy because chapter 7 bankruptcy does eliminate your requirement to pay all of your debts. In a bankruptcy case under Chapter 7, you file a petition asking the court to eliminate (discharge) your debts.
Do I Make Credit Card Payments?
There is no repayment plan in a Chapter 7 bankruptcy. You simply stop paying on unsecured debts like credit cards, medical bills, old judgments, and many wage garnishments. Note: If the wage garnishment is for child or spousal support, those will not be stopped by a bankruptcy of any kind.
You should continue to pay for your home mortgage and car loans if you intend to keep your home and car.
Typically, property which can be kept and protected while in a bankruptcy includes your homestead, your vehicles, household furnishings and personal effects, jewelry, health aids, tools of the trade, life insurance, personal injury claims, retirement accounts and packages, bank accounts to a certain amount, and other types of miscellaneous property. The typical individual filing for bankruptcy is able to protect ALL of their property by using these protections. Each case is different and must be analyzed by an attorney.
Bankruptcy filings are public records. However, under normal circumstances, no one will know you went bankrupt. The Credit Bureaus will record your bankruptcy, and it will remain on your credit record for 10 years.
The fact that you’ve filed a bankruptcy can appear on your credit record for ten years. However, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things any worse. And, since bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit.
Filing a bankruptcy doesn’t always mean losing your house. In a Chapter 7, if you want to keep your home or car, you must be current on your mortgage and car payments. If your equity in the property is fully exempt, then you may keep your home or car as long as you continue to make the monthly payments required. In reality, equity is measured after accounting for the cost of sale (e.g., realtors and fix up costs).
If you are not current on your home or car payments, or if you have too much equity, you may still be able to keep your car and home by filing a Chapter 13. On the other hand, if you wish to surrender your car or home, you may do so without being liable for any more money.
Once your bankruptcy is filed, you will give our hotline telephone number to the harassing creditors when they call you. From that point on, creditors will contact us for a status of your situation. In addition, if creditors have broken the law in the course of attempting to collect a debt from you, we will pursue remedies that may entitle you to receive compensation as a result of the violation – at no cost to you.