Living in Canoga Park comes with several advantages, but it will also often come with other drawbacks like the high cost of living. Because of this, it is easy to slip into debt because you end up spending most of your income on transportation, housing, and other crucial expenses.
Luckily, California bankruptcy law provides you with a way of seeking relief from the overwhelming financial problems, especially if you have debt and your creditors are on your neck. Bankruptcy declaration can help you take charge of your financial life in that kind of situation, but it can also affect your credit.
If you need a Canoga Park bankruptcy attorney focused and dedicated to helping you achieve your financial goals through a bankruptcy declaration, Los Angeles Bankruptcy Attorney is the place to contact.
What You Need to Know About Bankruptcy Declaration
You have probably heard or read somewhere that filing bankruptcy can make you lose your property or make you ineligible to obtain a loan forever. However, that is untrue because you can build a fresh credit score after filing bankruptcy and keep your valuable property.
If you are in a financial crisis due to loss of employment and exhausted all your options of reducing your debts, filing bankruptcy might be the only option to take control of your financial life without a rush.
A formal bankruptcy declaration will grant you an "automatic stay" court order, which halts all debt collection steps or efforts from your creditors, including any lawsuits against you. The idea to file bankruptcy when you are in a financial crisis comes with several crucial considerations.
Before you decide to declare yourself bankrupt formally, that means you have tried all other alternatives of seeking debt relief in vain. For instance, you might try to negotiate with your creditors to determine if they are willing to accept reduced debt payments over a more extended period through a particular repayment plan.
Suppose you have no other alternative of seeking debt relief other than filing bankruptcy. In that case, you should consider consulting with a reliable Canoga Park bankruptcy attorney for legal advice and assistance on the way forward because filing bankruptcy involves a few crucial steps that can affect your eligibility.
At Los Angeles Bankruptcy Attorney, we can help you figure out the best bankruptcy option that is suitable in your financial situation before you begin filing your paperwork because there are different forms of bankruptcy in California.
Forms of Bankruptcy that Can be Helpful in Your Financial Situation
Deciding whether to file bankruptcy is not an easy decision because it involves many legal processes that you might not beware of without an attorney's services. Below are two main types of bankruptcy options in California that you can pursue during challenging economic times to take charge of your financial life when facing foreclosure or harassment from your creditors:
Chapter 7 Bankruptcy
No doubt, Chapter 7, also known as liquidation bankruptcy, is the most common type or form of bankruptcy that most people with financial hardship file in California. The bankruptcy court, where you decide to file your petition papers, will appoint a trustee who will sell some of your non-exempt properties and use the proceeds to cover some of your debts.
Remember, in chapter 7, a trustee cannot sell exempt properties like a homestead, pensions, clothing, or a primary vehicle to repay your debts. Therefore, you don't have to panic about losing your valuable property because the trustee will sell particular non-exempt properties under this form of bankruptcy.
Chapter 7 bankruptcy declaration will offer you relief from most debts exempt the following:
Owed restitutions from a criminal conviction or injury you were found guilty under the law
If the petition is successful, the court will grant you an automatic stay, which will release you from personal liability of the discharged debts, meaning your creditors will have to stop all their debt collection efforts and harassment.
Chapter 13 Bankruptcy
The other form of bankruptcy that could work out in your favor in California is Chapter 13, also known as a reorganization bankruptcy. If you have a steady income, filing chapter 13 bankruptcy can help you seek the debt relief you need through a particular repayment plan for a time frame of three to five years.
Unlike chapter 7 bankruptcy, which allows you to liquidate your property to cover some of your debts, chapter 13 will allow you to keep your properties while paying your debts over time through a court-approved repayment plan.
Remember, just like chapter 7, this type of bankruptcy cannot erase some of your debts like student loans and child support. The advantage of filing 13 bankruptcy is that you can catch up on your car payments and mortgage without a hassle while making your regular payments to reduce debts.
The right form of bankruptcy to file depends much on your particular financial circumstances and your goals. Ensure you retain the services of an experienced and reliable bankruptcy attorney for legal guidance on how each type of bankruptcy can affect your financial life before making any significant commitment.
How to file Bankruptcy in California
The bankruptcy filing process in California involves a few steps, which you need to beware of because they can affect your eligibility for this form of debt relief. Once you decide which form of bankruptcy will work out in your favor, considering your financial situation, you should start preparing everything you need to make the petition successful.
Gather all Essential Documents
Like other legal proceedings, the bankruptcy court will require certain information from you before you begin your petition process. Here are the documents you need to prepare in advance before you start filing your bankruptcy petition:
Valid identification document, which can include a birth certificate or driving license
Any document to prove your income for the past six months
A document to prove ownership of any property that might be affected by bankruptcy declaration, for example, a title deed
A list of all your insurance policies
Copies of your tax returns for the last two years for liquidation bankruptcy (chapter 7) and four years for reorganization bankruptcy (chapter 13)
Any evidence to prove your current financial circumstances pushing you to file bankruptcy, for example, divorce papers or medical bills
Attend Credit Counselling Class/Session
Regardless of the type of bankruptcy you wish to file, you must attend a credit counseling class/session before starting your petition process. Credit counselors can go over your current finances to determine whether a bankruptcy declaration is a right way of seeking debt relief.
Several credit counselors in Canoga Park can offer you advice on credit matters. Perhaps, you don't have to move out of the house to complete this requirement because nowadays, most credit counselors can offer their services over the phone or online.
Find a Bankruptcy Attorney
You can file a bankruptcy petition without an attorney, but the petition's success rate is low because there are many legal matters you need to understand. A bankruptcy attorney can help you navigate through the vital paperwork process to ensure there is no missing document in your petition that can affect your eligibility.
Canoga Park bankruptcy attorneys are several, but finding a reliable service provider is not easy. Therefore, you should take your time to avoid settling for mediocre services. Here are tips to consider when finding a reliable bankruptcy attorney:
Look for an attorney with significant experience because every client’s financial problem and circumstances are different.
Look for a reputable attorney, considering comments of his/her past clients on his/her website and social media platforms.
Consider the attorney's cost of services because you are already in a financial crisis.
If you consider the above factors, you will find a reliable Canoga Park bankruptcy attorney who will help you maneuver California's confusing bankruptcy law smoothly to find the debt relief you need.
Complete Your Bankruptcy Petition
To complete your bankruptcy petition, you need to fill particular forms and file them with a court. The bankruptcy court to file your petition papers depend on where you have lived within the last 180 days.
Your attorney can file this petition with the appropriate bankruptcy court on your behalf because some of the information needed in these government forms are self-explanatory most of the time. However, he/she might need more information from you, which you should provide truthfully to meet the eligibility requirements for bankruptcy declaration in California.
Prepare Your Filing Fee
If you can pay your filing fee of $338 without a hassle, you or your attorney should bring a receipt of the payment to court when submitting the bankruptcy petition documents. However, if your current income is below 150% of the national poverty line, you should consider applying for a filing fee waiver to avoid more financial burdens.
Attending 341 Hearing for Bankruptcy Declaration
After filing your bankruptcy petition, you will also have to attend a 341 hearing (meeting of creditors), which will require you to bring proof of your identification and social security. You might not have to go to court when filing a bankruptcy petition because your attorney does all the work, but you must go to court when attending the 341 hearing.
In a 341 hearing, you will not meet the judge presiding over your case, but you will meet a court-appointed bankruptcy trustee who will ask you some relevant questions about your petition. For instance, he/she might want you to confirm whether there are inaccuracies in the information you've provided in your petition.
It is advisable to attend this hearing with your attorney to help you answer most of the questions that the trustee asks you concerning your bankruptcy petition to avoid contradicting yourself.
Discharging Your Debts After Filing a Bankruptcy Petition
When the court grants you a debt discharge, you will be relieved of the liability of repaying the listed debts. That means your creditors will not do any of the following:
Take any legal action against you.
Continue making harassing and threatening calls and text messages.
Pursue any form of debt collection activity against you
The bankruptcy court will send your creditors a notice to inform them about the discharge of your debts, which will halt any debt collection effort they had begun. Your attorney and the trustee will also receive another copy of your debt discharge notice.
Any of your creditors who try to make any debt collection effort against you after receiving your debt discharge notice could be subject to a fine. If you filed Chapter 7 bankruptcy, the court should issue you a discharge notice after four to six months following the bankruptcy petition.
On the other hand, if you filed chapter 13 bankruptcy, the court will issue you a notice of the debt discharge after completing the debt repayment plan, typically three to five years following the petition.
Its true bankruptcy declaration comes with a diminish on your credit score for a few years, but it is possible to improve it with time by showing that you are using your credit responsibly. Using your credit card wisely and making all your payments on time, you can establish a new and fresh credit history.
The process of rebuilding your credit history is not overwhelming, as many people presume, as long as you put your mind to it and use your credit responsibly. If you decide filing bankruptcy is your only viable option of finding debt relief as thousands of Americans do every year, ensure you consult with a Canoga Park bankruptcy attorney for legal advice before you file your petition.
Your attorney will analyze your financial circumstances' specific facts to give you viable options that can work out in your favor, considering your financial goals.
Find a Los Angeles Bankruptcy Attorney Near Me
If you have concerns and questions about bankruptcy declaration, Los Angeles Bankruptcy Attorney is here to offer you the outstanding legal help you need, while considering your current financial situation and future financial goals. Call us today at 424-285-5525 and schedule an obligation-free consultation with our confidential and courteous bankruptcy attorneys in Canoga Park.