Sometimes, life uncertainties like an illness, catastrophic injury, or lack of employment can make you accumulate large amounts of debts over time because you need to keep your bills current and live a comfortable life. With time these debts can become overwhelming to pay, but your creditors will not understand what you're going through financially, meaning they will continue harassing you.
However, you have a legal option to keep them at bay while you take control of your financial health under various California bankruptcy chapters. Wherever you are in Garden Grove, we at Los Angeles Bankruptcy Attorney can review your current financial situation and explain your debt relief options under the California bankruptcy code.
An Overview of California Bankruptcy Law
California bankruptcy statute provides hardworking individuals like you who face financial hardships with debt relief where all other options are in vain. Filing bankruptcy in California can eliminate most of your overwhelming debts in one swoop and give you a fresh start to take control of your financial life.
However, a formal declaration of bankruptcy is not a walk in the park because it may require you to liquidate your property like in Chapter 7 or forfeit a particular percentage of your income under Chapter 13. The chapter or type of bankruptcy you choose to declare will depend on your current financial situation and whether you have a sustainable income.
A reliable Garden Grove bankruptcy attorney can advise you on the right type of bankruptcy to declare, depending on your financial circumstances and situation. When your debts are due, your creditors can do anything to recover their money, even if it means filing lawsuits against you and sending threatening messages.
However, you have the option of halting all these debt collection efforts or steps from them by filing the chapter of bankruptcy that will be favorable in your unique financial and debt situation. Please don't wait until you lose your property or your pension to creditors because a bankruptcy declaration can keep them at bay and continue living a comfortable life.
Signs Indicating You Are on Your Way to Bankruptcy Declaration
Before you make this significant decision of filing bankruptcy, you will notice various signs or indicators showing your financial status is unwell. When you take heed of these signs, you might also be able to avoid filing bankruptcy altogether. Here are signs indicating you are heading towards bankruptcy:
You are Not Current on Your Vehicle and Home Payments
A good car and a nice roof over your head are essential if you want to survive in the city of Los Angeles. If you cannot settle your routine bills for your vehicle or home, you should think about filing bankruptcy because you cannot afford to lose the car you need for commuting from home to the workplace.
Under particular chapters of California bankruptcy, you might be able to retain your valuable properties like a home or a car so that you can repay your debts over time while maintaining a working schedule.
You Are Putting Aside Your Essential Bills to Settle Your Overdue Debts
If you notice that you are cutting down on your overall cost of living and putting aside essential bills like food, power, or water so that you can repay your debts, you are on your path to bankruptcy. A bankruptcy declaration can work out in your favor to maintain a healthy and comfortable lifestyle unaltered by your current financial circumstances.
You Cannot Save for Future Needs
We all work hard when we are young to save enough money for our future necessities when we retire, and we don't have the energy to work. When you realize it's almost impossible to save some money into your retirement account without neglecting other necessities of your daily life, your financial status is unstable, and filing bankruptcy can help you.
You are Now Seeking Financial Relief from High-Cost Loans
Using your credit cards to pay regular bills is terrible for your financial health, but seeking monetary relief from payday loans is even worse because many of these loans have high-interest rates. These payday loans can make it overwhelming for you to overcome your debts due to their high-interest rates, which might force you to file bankruptcy to take control of your financial life.
Creditors Are on Your Tail
When your creditors reach their breaking point, often 30 to 90 days past your debt due date, they will start threatening you through calls and text messages. If you notice this red flag, you need to speak to a reputable Garden Grove bankruptcy attorney for legal advice on California bankruptcy matters, depending on your financial situation.
California Bankruptcy Options that Can Offer You a Debt Relief
When you are declaring bankruptcy in Garden Grove as an individual, you have two different chapters or types of bankruptcy to choose from, offering varying protections to petitioners. Depending on your unique financial situation, the following bankruptcy options can discharge you from overwhelming debts:
Chapter 13 Bankruptcy
If you’ve got a regular income flow and want to keep all of your properties, it is advisable to file for Chapter 13, which gives you more time to settle your debts without penalties or interests. Chapter 13 bankruptcy helps you to clear your debts for a period of three to five years, depending on your income level and debt burden, through a court-approved repayment plan.
However, you have to propose this repayment plan indicating your income and how you plan to settle your debts. The court may approve or reject your repayment plan if it doesn't meet the eligibility criteria for declaring this chapter of bankruptcy in California.
As of 2020, you have to pay a bankruptcy filing fee of $235 to file this chapter of bankruptcy and $75 additional miscellaneous and administrative fees. Once you complete paying your debt according to the agreed repayment plan, the court will discharge most of your debts except the following:
- Student and educational loans
- Compensations that you owe and criminal fines
- Claims of spousal support or child support
- Any California DUI liabilities
Chapter 7 or “Liquidation” Bankruptcy
In a bankruptcy petition under Chapter 7, you will be requesting the court to discharge your debt, but you have to give out your properties in exchange, excluding specific "exempt" properties such as:
- Retirements accounts
- Primary vehicle
- Household items worth less than $675
A court-appointed trustee will sell the properties you choose to surrender and use the proceeds to satisfy your secured and unsecured debts. Unlike Chapter 13 bankruptcy, which requires you to have a steady or regular income to settle your debts through a repayment plan, Chapter 7 will only require you to have properties to liquidate to clear your debts.
To qualify for Chapter 7, you must pay a filing fee of $306 and attach the receipt to your petition. For the judge to discharge or clear you from debts under this chapter, you must also pass a particular means test that considers your expenses and income to determine if you can repay your debts through other bankruptcy options like Chapter 13.
If you wonder which chapter of bankruptcy to declare, you should consult a reliable Garden Grove bankruptcy attorney. An attorney can give you the legal assistance you require to make your final decision on bankruptcy declaration after careful assessment of your current financial situation and all other options available.
Documentations You Need for Your Bankruptcy Petition
When declaring bankruptcy, you should attach several documents on your petition, which are vital and should not be fraudulent or erroneous. These documentations include (but not limited to):
- Your monthly living expenses
- Your past two years tax return receipts
- A list of all your debts
- Title deeds to any real estate property that you own and car(s) titles
- Your past two years significant financial transactions
- Your creditors' information, including their addresses
Your bankruptcy attorney will ensure that your petition is correct and contains all the documents that the court requires to file the specific bankruptcy chapter you choose. The bankruptcy court that you or your attorney will file your petition after gathering all the necessary documents will depend on the location you have lived in the past 180 days.
Once you file your petition, bankruptcy's automatic stay court order will go into effect immediately. An automatic stay order prevents your creditors from taking any debt collection step against you, meaning you will not receive any more threatening messages or calls from them.
Benefits of Hiring a Garden Grove Bankruptcy Attorney
While it is possible to declare bankruptcy without an attorney's services, it is not recommendable to commence this legal process without an attorney's representation and guidance. Here are some of the benefits of retaining the services of a bankruptcy attorney when declaring bankruptcy in California:
Helps You Deal With the Fear and Uncertainty of Bankruptcy Declaration
If you are not familiar with how to file, how to pay, and the advantages of filing bankruptcy during financial hardships, your attorney can enlighten you before you commence with the process. A bankruptcy attorney's advice helps you deal with the fear and uncertainty of filing bankruptcy in California.
Bankruptcy declaration court hearings are short and straight to the point, but you need to pay attention to details in your paperwork and what goes on outside the courtroom, which require an expert's services.
There Will be No Mistakes With Your Petition
Any mistake or erroneous information you include on your bankruptcy papers can affect your eligibility for a debt discharge under the California bankruptcy statute. Before filing bankruptcy, you should know how to pay your creditors, handle particular creditors, pay the required fee, and many other bankruptcy declaration aspects.
When you hire an experienced bankruptcy attorney, he/she will ensure your petition is complete and correct before it reaches the court because he/she is aware of the requirement.
No More Harassment from Creditors
The main problem that debtors have is constant phone calls and harassing messages from creditors, even at night. Sometimes, your creditors can even go to the extreme of calling your relatives and employer to inquire about you and your current addresses. Once you file bankruptcy, your creditors will have no authority to threaten you again.
If any creditor calls you inquiring about his/her money after filing bankruptcy, you have the right to tell him/her to talk to your attorney. Your attorney will speak to them and handle the problem on your behalf, and you will be free of the headaches.
Circumstances Which Can Make the Bankruptcy Court Dismiss Your Petition
Under the following circumstances, the bankruptcy court can dismiss your bankruptcy petition:
You Did Not Attend Credit Counselling
As part of the bankruptcy declaration requirement, you must attend credit counseling 180 days before declaring bankruptcy. The primary purpose of attending credit counseling in bankruptcy is to explore other debt-relief choices apart from filing bankruptcy.
You Attempted Defrauding Your Creditors
If there is any evidence of you attempting to defraud your creditors, the court might dismiss your petition. In the court eyes, the following actions by the debtor before filing bankruptcy can count as strategies of defrauding creditors:
- Purchasing luxury items
- Transferring properties to relatives and friends
- Lying about your debt and income on a credit application
- Destroying your property
You Had Debt Discharge Through Bankruptcy in the Past
In California, you cannot file bankruptcy any time you wish because there is a time limitation. The court would dismiss your bankruptcy petition if you had a debt discharge under Chapter 13 in the past six years or under Chapter 7 within the past eight years.
These are not the only circumstances that can make a bankruptcy court dismiss your petition. Ensure you talk to a Garden Grove bankruptcy attorney if you need this form of debt relief to plan your financial life for a new and fresh financial start.
Find a Garden Grove Bankruptcy Attorney Near Me
At Los Angeles Bankruptcy Attorney, we have experienced experts who have a deep understanding of California bankruptcy law. We can help you with every bankruptcy declaration step for the best desirable results from your petition. Calls us now at 424-285-5525 424-285-5525 for a free consultation with our understanding attorneys wherever you are in Garden Grove.