ADDITIONAL BANKRUPTCY RESOURCES
Bankruptcy Lawyer Sacramento – Bankruptcy FAQ’s
What is Bankruptcy?
- Bankruptcy law provides the debtor, you, who is unable to pay off debts to develop a plan that allows for a clean start and a new opportunity by resolving your debt through dividing your assets among your creditors. Your right to file is provided by federal law and is handled in the federal court. According to the United States Bankruptcy Courts, as of September 30, 2012 there has been a whopping 4 percent increase in Bankruptcy cases filed since 2011, bringing the total to 1,261,140. These statistics show that you’re not alone.
What happens when I file?
- When you file a bankruptcy, a Court order goes into effect immediately stopping all collection activity. This includes stopping foreclosures, attachments, garnishments, and Creditors calling you. The sooner you come in to our law office, the sooner you can get relief–and the more you can save from Creditors. You will have a 341 hearing within about 4 to 6 weeks after the bankruptcy is filed. When the bankruptcy is finally over, a discharge is issued. This is a final and permanent order to stop all collection activity and declaring the debts to be non collectable. Bankruptcy does not normally get rid of a security interest that you gave to a Creditor such as a mortgage or a standard car lien, but it does make you not liable for the debt.
Which bankruptcy is right for me: Chapter 13 or Chapter 7?
- A Chapter 13 is like a bill consolidation loan, and you normally file it to keep property and stop foreclosures. A Chapter 7 is used to completely wipe out unsecured debts and to get rid of secured debts for property you don’t want to keep. Both will stop garnishments and Creditor harassment. If you earn more than the average wage for your state and size of family you will normally be required to file a Chapter 13.
Why file a Chapter 7?
- If you have substantial unsecured debts you may want to file a Chapter 7. You may also want to file a Chapter 7 if you want to surrender property and not owe for it. You can usually keep all your property in a Chapter 7, because you won’t have enough equity in any property to exceed the exemptions allowed.
Why file a Chapter 13?
- You may want to file a Chapter 13 if you have secured debts and are threatened with foreclosure or repossession, if you filed a Chapter 7 less than 6 years ago, if you wish to protect your cosigner, or if you have debts that are not dischargeable in a Chapter 7 but are payable in a Chapter 13. Child support can be paid first in a Chapter 13 before secured creditors giving you the advantage of not losing a car or property but having all of your payments go to child support at the start of the case.
What are the most common mistakes I can make when filing?
- Not showing up for your hearing and not listing all of your debts. Fail to show up at the hearing, and your case is dismissed. Fail to list a debt, and you continue to owe it. Also people often have too much in a checking account when they file or a tax refund coming. The best policy is to list all your debts and assets. Always list every debt, even if you think it is non dischargeable, it may be discharged anyway. Even include last month’s utilities.
How do I qualify for bankruptcy? Can I not be approved?
- You qualify for bankruptcy if either your outgo exceeds your income or your liabilities exceed your assets. You basically have to be a US citizen, reside in the state you file in, and not have filed within certain time periods (you can’t file two Chapter 7s within 8 years of each other).
Will my creditors stop harassing me?
- Yes. Creditors are by law required to stop all actions against persons who have properly filed the bankruptcy documents. This means goodbye harassing phone calls, wage garnishees, any lawsuits, and hello new beginnings. “The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision: It gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”
What does it cost to file for bankruptcy?
- The cost of filing depends on which chapter the debtor files under. Typically individuals file under Chapter 7 with filing fees of $306.00. Hiring a bankruptcy attorney is recommended and fees vary. The average cost is $1,200-2,500.
Can I own anything after bankruptcy?
- The simple answer is yes, you can keep any property that is exempt. You may also keep anything purchased after bankruptcy is filed. However, there are certain exceptions such as: life insurance benefits, an inheritance, or a property settlement if you receive it 180 days after filing.
Who will know?
- It is possible for anyone to find out about the debtors fillings since bankruptcy filing is public record. This however, doesn’t in anyway mean that everyone will actually find out. Under normal circumstances, no one will discover about your fillings unless you reveal it personally. Also, it takes one decade for your bankruptcy filing to vanish from your record.
If you are having financial hardship and are considering filling for bankruptcy in the Sacramento area, speak with an experienced bankruptcy attorney first. Call our office at (916) 971-8880 and discuss the options available for you.