Bankruptcy is a legal declaration that an individual, a business, or a corporation is non-profitable and cannot repay the creditor's debts. You may decide to file a petition for bankruptcy to get relief from overwhelming debt. Bankruptcy filings are of various types, and it is essential to identify the one that will best suit you. Uniformity in bankruptcy cases is ensured because they are all governed in federal courts using federal laws. Since there are different ways of getting relief from your debts to creditors, you must work with an experienced attorney. If you have any Arleta bankruptcy issues, please get in touch with our attorneys at Los Angeles Bankruptcy Attorney for prompt help.
Debts Discharged Through Bankruptcy
There are many reasons that will make you file for bankruptcy. Unforeseen expenses you are likely to incur or external forces will make you file the petition. Some of the unforeseen costs include unexpected health care costs, medical debt, or even credit card debts.
Many debts can be discharged through bankruptcy. However, there are some that you cannot. They are student loans, child support, debts resulting from death due to DUI, and criminal restitution. The way the judge will discharge your debt depends on the chapter you cited when filing the petition. You should ensure that you mention the best option to help discharge all your debts. Therefore, it is crucial to work with an attorney who will give your directives the best chapter to quote.
United States Bankruptcy Code
The bankruptcy code protects the creditor and the debtor. It protects the creditor by ensuring that the debtors document all they have in terms of assets in writing, to be used as part of debt repayment. It also protects the debtor in that the code requires them to cease with debt collection. The disclosure enables the court to decide whether you can repay the debt or it should be discharged. When filing for the petition, your Arleta bankruptcy attorney will initiate the process and ensure they quote the appropriate chapter. The following are the chapters that are cited in bankruptcy:
Chapter 7 — That you received a complete discharge of your debt. In case you had some assets, there is a trustee who oversees their liquidation, and that the creditor received part of the debt repayment.
Chapter 11 — That the debtor and the creditor establishes a plan to repay some or all of the debt. In this case, the debtor is usually a business.
Chapter 12 — That fishers and farmers can reorganize and arrange on repayment of all or some of the debt they owe to creditors
Chapter 13 — The chapter is cited if you are a wage-earner and with regular income. It allows you and the creditor to establish how to make repayments. However, you should meet some minimum requirements to qualify for the chapter that the debt owed to creditors should be paid within three to five years.
Chapter 15 — The chapter applies if you and the creditor are in foreign court cases. The chapter requires that you comply with the guidelines and the strict rules ordered by the court. Therefore, your work with a qualified Arleta bankruptcy attorney must help you gather the information required and present the necessary documentation for you to be relieved of the debt repayment.
Filing for Bankruptcy
Filing bankruptcy involves filing forms and submitting them to court. Bankruptcy forms are usually filed with the court clerk. The forms submitted to the court clerk depend on how urgent your issue is. Suppose the creditor is in the process of repossessing a car or any other property that you would like to be repossessed. In that case, you can start by filing the first two pages of the voluntary petition, and you can file the rest within fourteen days. The voluntary filing ensures that your property is protected. Therefore, it means that you cannot pay the debt or transfer property without the court order. One of the effects of voluntary filing is that you are given an automatic stay that prevents creditors from collecting debts from you.
It may not be a complicated process to file for bankruptcy in California. However, there is a need to hire an Arleta bankruptcy attorney to guide you through the petition filing process. The attorney will help you decide on the best option to present before the court to ensure your debts are discharged, or a repayment plan that suits you is drafted. There are several steps you will follow to have your debts discharged. They are:
Collection of Bankruptcy Forms
When you want to submit your bankruptcy petition, you start by submitting the required forms to the court. The documents you present to the court usually have the necessary information to make the process easy. The documents include the tax returns, paychecks if you are an employer, and monthly income documents if you are self-employed to show your situation. You are also required to present a document showing all your debts, your creditors, and the assets you own. You should divide your debts into secured and unsecured. Secured are linked to a specific property, while unsecured ones include credit card debt and medical bills. You should have your credit report and have any collection notice that you have been issued. It’s essential to ensure that all these necessary documents are available to make the process shorter. If you decide to file a bankruptcy, the debts that will be discharged are the unsecured ones. The secured debts are easily discharged because the property can be used to repay the loan. If you have both unsecured and secured debts, you can pressure the creditors relieved by managing the secured one. You can make arrangements on how to make full or partial payments and have the debts cleared.
Taking Some Credit Counseling
It is a requirement by the federal laws that before filing for a bankruptcy petition, you complete credit counseling six months before the filing. It does not matter what type you have files, but you should ensure that you enroll with any approved providers in California. The session allows you to sit with your credit counselor to determine if you can plan on debt repayment instead of bankruptcy relief. The counselor will also help you organize your finances so that you do not have to file a bankruptcy petition. If you do not have any means to repay the debts, you should ensure that you involve your attorney when filing the petition. The course can be completed online or over the phone; you do not have to go anywhere. There is a fee that you will be required to pay. The cost, though, is affordable to most people.
Contacting Your Attorney
Filing for bankruptcy can be done without the help of an attorney. However, if you want to increase the chances of having your debts discharged, you should work with an experienced Arleta bankruptcy attorney to help assess the situation. The attorney will help determine whether the petition is best for you or a different way to manage your debts. He or she will also advise on the best type of bankruptcy to quote in your petition. Within the automatic stay period, the attorney will also help you make plans on the best presentation you can have for the judge to listen to your plea.
Filing A Bankruptcy and Completing the Bankruptcy Forms
If your attorney finds it necessary to file a bankruptcy petition, there is a lot of paperwork that you should complete with an attorney's help. There are various forms you are required to fill. You can file those on your own while others need experts since they are technical, especially if there is a property. Hiring a bankruptcy attorney will help by asking you the questions that are used to fill the forms. If you are filling the forms online using an app, the attorney will help you generate the questions for you. You should ensure no information is left out to avoid a lot of questioning during the court proceeding.
Since bankruptcy is a voluntary process, there are many forms that you will be required to fill. Some documents will outline the creditor, your income, debts, and expenses. The forms will also show a property you have given out or sold within the last two years. In the documentation, some forms will indicate your payment plan. Some of the plans you have are:
Maintain the payment plan as before
Surrender your property to the creditors
Make a new arrangement with your creditor on how to repay the debt
Make a payment to the creditor as a replacement value for the property
When you have filed your petition, it becomes illegal for the creditors to collect your debts. Filing a bankruptcy petition ensures that your financial affairs are handled legally through the court of law. The creditor will then be notified to ensure they do not violate the law where they shouldn’t collect anything from you after filing the petition.
You have an opportunity to apply for a waiver if your income is less than 150% of the guidelines set by the federal laws. If the court denies you the waiver and you still cannot pay the filing fee, you can apply to have the fee paid in installments until you make the full payment of $338. Suppose you can get the full fee. You should make the payments the same day you are presenting the bankruptcy documents to the court. Different methods are used to make payments. You can use your credit card, personal check, or a debit card.
Printing the Bankruptcy Forms
You are ready for the filing process once you take the counseling and complete filling the bankruptcy forms. You are then required to print all the documents in two copies, where one copy remains with you while the other copy is filed used in the court.
Case Review by your trustees
Your bankruptcy petition goes to a Local Bankruptcy Trustee, who is the one who manages the whole process. The trustee ensures that you and the creditors act honestly to provide fairness in the case. He or she will evaluate the assets you own and will determine if there are non-exempt properties. He or she will also examine the major transactions you did in the past few years to decide whether they can be undone to repay your creditor. Such a case may happen if you have transferred an asset to a relative before filing a bankruptcy petition. The reason being, the trustee finds it as a way you want to protect your property from repossession by the creditors.
Meeting with the Creditors
After the trustee has reviewed your case, he or she will schedule a meeting with the creditors. It is called a “341hearing,” held 21 and 40days after you file the petition. The parties to attend the meeting are your trustee, your attorney, and you. Creditors have a choice of attending or not. They will only participate if they have any objection to your filing. There are documents you may be required to bring with you to the meeting. They are your ID copy, mortgage loan agreement, pay stub, lease agreement, bank statement, and your social security number. The trustee will ask questions regarding your petition and other basic information you may have included in the petition in the meeting. After that, the creditors can ask you questions, such as your plans to settle the debt. Suppose the trustee asks you to provide more documents to the meeting; you will be required to attend another hearing on a different day.
A Decision on the Secured Debts
It will help if you make a plan on how you will settle the debt for the secured debts such as auto loans and mortgage. In case you have a lot of payments behind schedule, your creditor can request the court to lift the automatic stay to repossess the property for debt repayment. You may also be required to decide how the debt will be repaid if you do not want to surrender the property. When the automatic stay is lifted, you will be required to surrender and give up the property for repossession.
You will be required to surrender non-exempt property after the meeting with the trustee. The property will then be sold and will be used to repay part of the debts. For the secured debts, a plan on repayment or repossession will be done per the status.
Your unsecured loan will be discharged after selling the non-exempt property. In this case, having your debts discharged means that you have been forgiven and that you do not have to think about them anymore. The creditor does not have the authority to collect them from you at any given time. However, there are debts that you will still be required to pay, such as student loans and medal bells. The obligations will still survive even after the discharge of the other loans.
After your debts are discharged, you have an opportunity to start over with clean financial status. Therefore, it’s up to you to rebuild your credit history now that the bankruptcy and the missed payments damage it. Accessing credit once again and making payments at the right time will help build your credit history too.
What Will Happen to Your Property
In the bankruptcy petition, your property is divided into exempt and non-exempt property. Exempt property is one that the federal or the state declares unavailable for creditors as they try to collect their debts from you. The court divides the property to protect you from being left in a desperate situation after debt collection. The exempt property will help you have a fresh start after bankruptcy. Non-exempt property is used to repay all or part of the debt owed to the creditors. They are usually of minimal value, and if the creditor finds out that the value is too little. Then he or she will find no need to sell the property. However, if the property has a form of connection to the debt, the creditor will repossess the property, sell it, and use the money to repay all or part of the debt. Therefore, you will be required to have a payment plan agreement with the creditors to prevent them from taking your property.
Find A Los Angeles Bankruptcy Attorney Near Me
Financial insolvency can seriously impact your economic well-being in a big way. Negotiating with creditors can also be a significant challenge because they are not ready to incur any losses because of your inability to repay the debts. If you are experiencing financial difficulties and you have debts to repay, an attorney can help relieve you of the debts you owe the creditors and have a fresh start through legal representation. The attorney will help prevent harassment from creditors, protect your property, and get the debt relief. If you are looking for an Arleta bankruptcy attorney, get in touch with the Los Angeles Bankruptcy Attorney at 424-285-5525 today.