Let's face it; declaring bankruptcy hardly ever feels like a win. Money problems are often associated with defeat, not just financially but also mentally. Irrespective of why you cannot service your debts, it is perfectly normal to feel washed up. Fortunately, these negative sentiments are far from reality. Filing for bankruptcy offers a way to emerge stronger financially and master new ways to ensure unwavering future stability. At Los Angeles Bankruptcy Attorney, we have a team of legal experts equipped with the skills to make sure you come out on the other side stronger.
To lighten your debt burden, we will begin by helping you understand your financial position and bankruptcy options. We will also help with the paperwork of filing a Newport Beach bankruptcy petition to make your creditors back off and give you the much-needed breathing room to get back on your feet.
4 Ways to Prepare For Personal Bankruptcy in Newport Beach, Orange County
Deciding to file for bankruptcy is just the first phase of a complicated legal process. Even after accepting your unfavorable financial position and choosing a suitable debt relief option, there are specific challenges you may face in the days, weeks, or months to come. One way to reduce the feeling of fear and anxiety is to prepare adequately for the bankruptcy process.
Here are four crucial things you should do as you prepare to file:
Enlist a Skilled Newport Beach Bankruptcy Lawyer
One of the necessary steps to ensure the bankruptcy process is as smooth as possible is to hire a dependable bankruptcy attorney. Make sure your lawyer of choice is experienced enough to help you dodge common missteps that can lower the risk of having your case thrown out.
A competent attorney will do so much more than merely handle all paperwork correctly. Apart from dispensing invaluable legal guidance through the filing process, the expert will also expedite each step, ensuring you achieve the desired outcome sooner than later.
Cancel All Automatic Payments
The majority of responsible debtors have some automatic payments drafted from their accounts. Because bankruptcy is meant to help you manage your debts better, all these payments need to stop weeks before filing a petition. The idea is to have more control over how you will settle the debts.
Even though filing for bankruptcy instantly activates an automatic stay, it may take days or weeks for creditors to receive your filing notice. This means they can continue to make pre-authorized deductions on your bank balance until they officially receive a notification.
The easiest way to stop deductions instantly is to notify your bank about your bankruptcy petition. Your attorney can then speed up the process of informing your creditors by faxing or emailing them. For a notice to be deemed valid, it should contain crucial information such as the case number, file date, and court.
Begin Working on a Budget
A budget is a powerful financial tool that helps you watch your expenses and debt payouts. Before you draw your conclusion lines and opt for bankruptcy relief, try twitching your budget and practice living within your means. Even though you will still get a chance to create another budget after determining your disposable income, it is better to begin practicing better financial management behaviors immediately.
Be On the Lookout for Repossessions and Seizures
Only a court-issued automatic stay can stop creditor harassment and collection efforts. This stay is issued once you file a bankruptcy petition. Before that, anything can happen. Some creditors may try freezing your funds or repossessing assets used as collateral to secure loans.
The sooner you can begin the bankruptcy process, the sooner you can enjoy your financial rebirth. We recommend consulting with our seasoned attorneys whether you are ready to file or you are still unsure about the ideal steps to take. We are dedicated to providing valuable assistance, and also make it a top priority to treat all clients with the compassion they deserve.
How Much Will It Cost Me To File For Newport Beach Bankruptcy?
Here's the big question: How much does bankruptcy cost?
When faced with what seems like never-ending money problems, it's easy to wonder whether the expenses involved in declaring bankruptcy are worth it.
Well, let's compare and contrast the costs allied with filing for both Chapter 7 and Chapter 13.
Filing for chapter 7 is relatively cheap because most people who qualify have lesser assets. Such cases can also demand higher attorney fees if there are complexities, such as a judgment lien on real property that ought to be liquidated. Typically, the attorney fee is set depending on the complexities involved and the level of legal assistance required.
Usually, clients need to pay the attorney fees upfront. Again, this is likely to be a lesser amount because it takes about three months to wrap up a Chapter 7 case. You must pay the attorney fees in advance because all monies owed to creditors are wiped out with other dischargeable debts.
Apart from attorney fees, you are also required to settle the following costs:
- Filing fee — $245
- Administrative fee — $15
- Trustee surcharge — $75
- Credit Counseling — $15
- Debtor Education — $15
When filing for Chapter 13 bankruptcy, time is on your side. You have 3 to 5 years on average, meaning you have plenty of time to get your house in order and catch up with mortgage, car, and attorney fees payments. The best part is that in Los Angeles, the courts have set limits that describe the maximum amount of attorney fees charged.
With Chapter 13, most law firms allow their clients to pay attorney fees before, during, or after the case. There is more flexibility, and you merely need to agree with your legal representatives. Other expenses to expect include:
- Filing fee — $235
- Administrative fee — $75
- Credit Counseling — $15
- Debtor Education — $15
When filing for Newport Beach bankruptcy, it is imperative to make an objective, fact-based analysis of the debt relief process's value. When considering the cost of bankruptcy, also calculate:
- How much debt will be forgiven
- The value of assets you can keep
- How long it will take to get a clean slate
- How much time you need to clear debts with increased interest rates if you don't file
The bankruptcy process is, in most cases, reasonably inexpensive once you consider the above aspects. This process may even be a mere 10% or less of the overall cost of your debt's interest rates. During the free consultation, we can help you understand the actual value of filing for bankruptcy, compared to its cost.
Understanding Credit Counseling and Debtor Education
Whether you want to file under Chapter 7 or Chapter 13, you must take two essential classes. Before filing, you need to attend the credit counseling course. You are also required to participate in a debtor education course before the courts issue a debt discharge notice. These courses charge relatively inexpensive fees, although they equip debtors with invaluable knowledge and financial management skills.
Credit Counseling (Pre-Bankruptcy)
The credit counseling course will help you decide whether filing for bankruptcy relief is your best option. In some situations, debtors can pull out of debt by requesting more comfortable repayment plans from their creditors. Your Newport Beach bankruptcy attorney can help you find the best credit counseling agencies.
During the course, there are two vital things the credit counseling agency will do. They include:
- Review your financial background and ability to service your debts
- Analyze your income and help you prepare a budget
If you create a repayment plan that may serve as an ideal alternative to filing for bankruptcy, you may opt not to continue with the filing process. However, you must attach this repayment plan to your petition if you still decide to file.
The courts may use the proposed repayment plan to encourage you to file under Chapter 13. Even so, you will get a chance to explain why you feel Chapter 7 is better for your situation. Whether creditor counseling helps you develop a repayment plan or not, you must present the course certificate with the rest of your bankruptcy paperwork.
Debtor Education (Pre-Discharge)
Debtor education classes are a financial management course you must take after filing, right before the court issues a discharge notice. The training equips debtors with the skills to make better financial decisions to regain their financial stability sooner than later.
For both the creditor counseling and debtor education courses, your attorney can recommend the best agencies. You can also check the US Trustee's official website for a list of approved agencies.
Once you complete the debtor education course, you will receive two certificates that certify your participation and completion of the course. The right time to file these certificates will highly depend on the type of bankruptcy relief you require. For those filing under Chapter 7, filing should occur within 45 days following the creditor's meeting. For Chapter 13, you should file before the date of your last payment.
4 Newport Beach Bankruptcy Facts
Filing for bankruptcy relief is neither pleasant nor straightforward. However, we can all agree that the process is vital for anyone sinking in debt and wants to rebuild a healthier financial future. There are four essential facts every petitioner should know before filing. They include:
Fact 1 — Bankruptcy Won't Erase All Debts
There is some level of debt relief to be expected when you file for Chapter 7 or Chapter 13. However, there are certain debts that neither law can discharge or forgive. For instance, irrespective of the depth of your money problems, you are still responsible for settling debts like:
- Child or family support
- Recent taxes
- Financial obligations emerging from fraud cases
- Student loans
Fact 2 — Not All Assets Are Liquidated
It is typical of people to assume that filing for bankruptcy, especially under Chapter 7, will facilitate the loss of all their valuable assets. This cannot be further from the truth. Even under Chapter 7, certain exempt assets are deemed necessary for a normal day-to-day life. For instance, you are likely to keep most if not all of your basic electronics, including your flat-screen TV.
Fact 3 — Sometimes, Paying Off Your Debts Isn't the Best Option
Declaring bankruptcy is a serious decision. In some instances, it is the best possible option to explore. For example, you should consider filing if your debts account for more than half of your yearly income. When in such a position, trying to dodge the bankruptcy process will only move your financial situation from bad to worse.
At Los Angeles Bankruptcy Attorney, we strongly believe in bankruptcy's ability to offer new and better financial beginnings. While this is the case, we are also convinced that bankruptcy relief is not a magic solution for all situations.
Meet us for consultation and talk to a skilled Newport Beach bankruptcy attorney about your unique economic circumstances. We will inform you about the ideal bankruptcy option to consider and other alternatives that may suit your situation.
Fact 4 — Declaring Bankruptcy Doesn't Signify Failure
Declaring bankruptcy isn't an admission of failure, character flaws, or defeat. The truth is that bankruptcy relief is a legal process designed to provide a financial remedy to debtors who cannot service their debts. Most people fall into debt issues for reasons beyond their control, including health concerns, unemployment, and unforeseen disasters.
Think of the process as one that can enhance your financial future. With proper guidance and the tricks mastered during the debtor education course, most petitioners can spruce up their credit rating and overall financial wellness in as little as a year.
Find a Los Angeles Bankruptcy Attorney Near Me
If you are considering bankruptcy, you are certainly in a tight spot. This could be because of unfortunate events such as unexpected health problems or layoffs. Irrespective of how bad your situation may seem, Chapter 7 or Chapter 13 could offer just the solutions you need. While Chapter 7 can eliminate your debts in less than three months, Chapter 13 can reduce your debt to income ratio, providing a lighter, more manageable debt settlement load. Whether you are an individual, married couple, or business, contact the Los Angeles Bankruptcy Attorney at 424-285-5525, and let's give you a clearer picture of what a fresh financial start will look like for you.