When you decide to settle in Los Angeles, Mission Hills is one of the best suburban neighborhoods, especially if you have a family. Los Angeles hosts several tourism events that help in boosting its economic growth. Despite this economic growth, you may face a hardship that requires you to take some drastic steps like filing for bankruptcy.

When you reach this point, you will need a bankruptcy attorney to assist you to file for bankruptcy and on time. When filing for bankruptcy, you should remember that the process involves federal law. Therefore, you will need someone who has a clear understanding of the court procedures to represent you.

Your bankruptcy attorney should ensure that you understand the available options and how to overcome your situation. At Los Angeles Bankruptcy Attorney, we have competent lawyers to help you with your bankruptcy case.

Types of Bankruptcy

When filing a bankruptcy petition, you should engage the services of a Mission Hills bankruptcy attorney, who will explain the four types of bankruptcy and help you choose which one best fits your case. These types of bankruptcy are:

Chapter 7

In this type of bankruptcy, the court sells your assets and uses the proceeds to pay your creditors off. Under this bankruptcy, you can clear most of your debts while retaining some of your exempt assets in California. Bankruptcy exemptions will determine the property you will keep during and after the proceedings conclude. If your property is not exempt, then a bankruptcy trustee may sell them to pay off your unsecured debts. These exemptions include but not limited to:

  • Home
  • Personal belongings
  • Car
  • Pension
  • Other properties

When you file for Chapter 7 bankruptcy, it will wipe out most of your debts, but you must pass the means test set up before filing for this bankruptcy. This means that your income must be less than a certain amount of money. Ensure you talk with your Mission Hills bankruptcy attorney to determine if you qualify to apply for this type of bankruptcy.

Requirements for Chapter 7 Bankruptcy Filing

  1. Debtor Status

To qualify as a debtor in a chapter 7 bankruptcy petition, you must be an individual or a business entity like a partnership, limited liability companies, or corporations. The court will recognize you as a debtor in a bankruptcy petition if:

  • You have not had a bankruptcy petition thrown out by the court in the last 180 days due to disobedience to a court order.
  • You did not voluntarily withdraw a bankruptcy petition after your creditors went to court to have the automatic stay raised. This rule prevents people from filing several bankruptcy petitions in a row in a bid to delay paying their creditors.
  • Once you have filed and received a chapter 7 bankruptcy discharge, you can file for another similar petition after eight years have passed.
  • With a successful chapter 13 bankruptcy discharge, then you can file for a chapter 7 after six years, assuming you did not pay off your debts using chapter 13 in full.

  1. Receive Credit Counseling

To qualify as a debtor in a chapter 7 bankruptcy petition, you will need to enroll and complete a credit counseling session with a recognized provider. You will need to take this course 180 days before filing for your bankruptcy case. The course is issued by a provider approved by the U.S trustee in the district where you file your petition. The best part is that; you can take this course online from the comfort of your living room, on your phone, or choose to take a one-one class where you interact with the counselor. The course’s price range is between $10-$50 and varies with the service provider.

This course aims to ensure you know the available bankruptcy options and your options regarding your debts. The course takes about 90 minutes, and you will be issued a certificate upon completion. You will have to ensure that this certificate is attached to your bankruptcy petition to show the court that you satisfied its requirements.

  1. Filing Fee

You will have to pay a filing fee of $338 to file for a chapter 7 bankruptcy petition. Your Mission Hills bankruptcy attorney will file this fee for you during the first visit to the court while filing your petition. If you are under wage garnishment and you cannot make the full fee at once, we can ask the court to make payments. This way, you will see the end of the wage garnishment and, at the same time, receive the protection of the automatic stay. If you earn less than the 150% federal poverty guideline, you can request the court for a waiver on the filing fee.

  1. Income Requirement

The U.S law ensures that only those in dire need can receive chapter 7 bankruptcy discharge. This income requirement checks whether you have the means to repay some of your debts under chapter 11, 12, or 13 using some repayment plans. If you pass this requirement, popularly known as the “means test,” it means that you are not in a position to repay your debt under chapter 11, 12, or 13. Passing the mean test allows you to file for a chapter 7 bankruptcy petition.

When performing a means test, you are required to calculate your basic household income for the last six months, excluding the month you are filing for bankruptcy with the average household income for a similar household.

  • You should not worry if you do not know how to calculate your basic household income, as a bankruptcy attorney will assist you. Under the guidance of your Mission Hills bankruptcy attorney, you will file for a bankruptcy that will both be beneficial to you and your creditors.

Discharge Requirements for Chapter 7 Bankruptcy

Once your petition has been successful, there are several requirements you must meet before a discharge. Your bankruptcy attorney will ensure that you meet all the requirements that the law expects like:

Debtor Education Course

Once your attorney files a Chapter 7 bankruptcy petition, you must take a second bankruptcy course. You will need to complete this course before receiving your chapter 7 bankruptcy discharge. Once you complete this course, your course provider will issue a certificate you must file with the court.

You won’t receive your bankruptcy discharge without this certificate, and you must start your debtor education course as soon as possible after receiving your case number. You can take the debtors’ education from the same company where you completed your credit counseling course. The course takes about two hours, and you can take it online or attend one-on-one sessions if that is your preferred way.

With a trusted Mission Hills bankruptcy attorney at your back, filing for a chapter 7 bankruptcy in San Fernando Valley is a walk in the park.

Chapter 11

This bankruptcy proceeding involves the reorganization of your plans to pay off your creditors. Though this type of bankruptcy is done mainly by partnerships and corporations due to its complex nature, you can file as an individual. This bankruptcy allows you to keep your assets and continue to operate your business while coming up with a strategy to pay off your creditors through a reorganization plan. With the assistance of a bankruptcy attorney, you can file for this bankruptcy in Mission Hills and start working on easing your debts while your business remains operational.

Chapter 12

This bankruptcy is available to commercial fish farmers and other farmers who prove to the bankruptcy court that they derive most of their income from farming. Chapter 12 bankruptcy will enable them to keep their property and continue farming activities as they work out a repayment mode with their creditors.

Chapter 13

A Chapter 13 bankruptcy is available to individuals and businesses who do not pass the means test to qualify for a Chapter 7 bankruptcy. You can also apply if you wish to continue with your day to day running of your businesses as you work on repaying your debtors. To qualify for this type of bankruptcy, you will need to have a regular income. You will be in a position to keep your property as you pay off your debts in 3-5 years. One of the requirements for a chapter 13 petition is that you must prove you are financially stable. Your financial stability will prove to the court that you are in a position to repay your debts during the period allocated.

With chapter 13, you will pay less pre-filing fees because you can pay the total amount over the 3-5 years while working through the repayment plan. Once you have completed your repayment plan, the court will offer a bankruptcy discharge. Talk with your bankruptcy Attorney at Mission Hills to know your debt limit under Chapter 13 bankruptcy.

Chapter 13 Discharge

You are entitled to receive a chapter 13 bankruptcy discharge upon completion of the repayment plan. You will also need to:

  • Prove that you met all your domestic obligations
  • You have not received any bankruptcy discharge in another case filed within two years before a chapter 13 case or within four years for prior cases in chapter 7, 11 or 12
  • Complete all approved financial courses.

Effect of Chapter 13 Discharge

When you receive a discharge, it releases you from any debts listed in the plan with a few exceptions. Some debts are non-exempt under chapter 13 like:

  • Home mortgage
  • Child support
  • Government debts
  • Alimony
  • Some taxes
  • Student loans
  • Personal injury debts
  • Criminal fines.

How do you benefit from Filing for Bankruptcy?

When you file a bankruptcy petition, it will release you from some types of debt. With bankruptcy, you will not be legally expected to pay debts that have been discharged by the bankruptcy.

When you receive a bankruptcy discharge, your creditors can no longer collect on the discharged debts. This means that your creditors don’t have any legal rights to reach out to you through calls, texts, or any means. Though you will be rid of some of your debts when you file for bankruptcy, some debts cannot be discharged by a bankruptcy-like:

  • Tax debts
  • Child support
  • Some student loans
  • Spousal support
  • Wages
  • Personal injury charges
  • Fines and penalties due to governmental bodies

Length of Bankruptcy Cases

The type of your bankruptcy will determine the length of the case, with a chapter 7 case; you may have your debts discharged in between a period of 4-6 months. Chapter 11 and 13 will take you up to 5 years each.

Automatic Stay

After you file for bankruptcy, the federal court will notify the creditors you have listed in your bankruptcy petition. This notice stops your creditors from their collection efforts like calls and letters. An automatic stay is a temporary measure that will gain some much-needed peace of mind as you try to develop a long-lasting solution to your debt situation.

An automatic stay will stop an eviction notice or foreclosure on your property for a short period until the court raises it. It can provide you with a long-term solution for your property if you have equity on the said property.

Contact a Mission Hills Bankruptcy Attorney Near Me

The fear of filing for bankruptcy in Mission Hills holds most people back since they cannot handle the procedure. You are unsure of your life after filing for bankruptcy and bothered by the popular myth that you cannot own anything after filing for bankruptcy. You can still own property exempted in California, and you have the right to own new property. A bankruptcy petition also paves the way for you to rebuild your credit score.

At the Los Angeles Bankruptcy Attorney, we will address any question you have in detail, explaining the advantages and disadvantages of any type of bankruptcy option available. If you are afraid about the bankruptcy petition’s effect on your credit score, talk to our attorney at 424-285-5525.