Bankruptcy is a set of federal rules and laws that help businesses and individuals who owe the debt they cannot pay. Bankruptcy laws also help individuals who no longer pay creditors to get a new start. They do so by creating a repayment plan or liquidating their property and assets to pay their debts.  The laws also protect failing businesses and provide for proper payment plans to creditors through liquidation or reorganization. Federal courts have jurisdiction over bankruptcy cases. It means that any bankruptcy case can only be filed in a federal court. Suppose you are among the individuals who cannot pay your creditors the debts you owe them. In that case, it is essential to work with a qualified Porter Ranch bankruptcy attorney from a reputable organization. The attorneys will help you make the right decision depending on the much you owe and in the process of filing. To get legal help, contact the Los Angeles Bankruptcy Attorney and talk to our experienced attorneys.

Understanding Bankruptcy

The primary purposes of the bankruptcy law are:

  • To give you a fresh start by relieving you of most debts
  • To repay your creditors in an orderly manner if you have any property available for payment

There are bankruptcy cases filed to allow you to establish an organized plan to repay your creditors, while others involve liquidation of your property. A bankruptcy case begins when you file a bankruptcy petition with the court. You may file the petition, your husband or wife together, or by a corporation or an entity. You are required to file a statement listing assets, liabilities, income, and the names and contacts of your creditors, and the much you owe them. The petition prevents the collection of debts against you and your property. Provided that the petition remains in effect, the creditors can’t bring any lawsuits, make telephone calls, or make wage garnishments as a way of asking for payment from you.

Creditors usually receive a notice from the court clerk that you have filed a petition for bankruptcy. In bankruptcy cases that involve liquidation of property, there is usually little or no available money from your estate to pay the creditors. You usually are given a discharge of most of the debts without much objection. This means that you will no longer be liable for the debt repayment.

However, disputes can also give rise to litigation in these cases over certain matters as who owns what property, what the property is worth, how it should be used, whether you should be discharged from paying certain debts, the much is owed as debt, or the amount of money to be paid to auctioneers, accountants, lawyers, or other professionals. Litigation in the bankruptcy court is conducted in the same way that civil cases are conducted in the district court. There are steps followed, like pretrial proceedings, settlement efforts, discovery, and a trial.

Types of Bankruptcies

Even though the primary goal of bankruptcy clearing the debt, not all bankruptcy cases are equal. There are six types of bankruptcies:

  • Chapter 7 meant for liquidation
  • Chapter 13 for repayment Plan
  • Chapter 11 for large Reorganization
  • Chapter 12 for family Farmers
  • Chapter 15 meant for Foreign Cases
  • Chapter 9 meant for Municipalities

Bankruptcy Chapter 7 

Also known as liquidation, it is a common type of bankruptcy for individuals. Court-appointed trustees usually oversee the sale of your assets to pay off your creditors. Any remaining unsecured is usually erased. However, it does not include debts such as student loans and taxes. Depending on your state, there are things that the court will not force you to sell. For example, the necessities like a car, house, and retirement accounts, but nothing is guaranteed. Chapter 7 also only postpones a foreclosure but cannot stop it. The only way to have the asset you still owe money on is to recommend a loan agreement and continue with the payments.

You can only file for this Chapter of bankruptcy if the court finds out that you do not make enough income debt repayment. The decision by the court is based on the means test. The means test does compare your income to the state average. It also looks at your finances to determine if you have any disposable income to pay back a certain percentage of your debt. If your income is too low, then you are likely to qualify for Chapter 7. The Chapter stays on your credit report for about ten years. You are not eligible to file it again until after eight years.

Chapter 13 Bankruptcy

While Chapter 7 bankruptcy forgives your debt, Chapter 13 reorganizes it. The court approves a payment plan monthly to pay back all of your secured debt and a portion of your unsecured debt and for a period of three to five years. The monthly installment will depend on the amount of debt you have and your income. The court also puts you on a strict budget and checks all your spending. This bankruptcy allows you to have your assets and catch up on debt that is not bankrupt cable. It also stops a foreclosure by giving you some time to bring your mortgage up to date. This Chapter will stay on your credit report for about seven years. You cannot file for the Chapter again until after two years.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy helps in business or corporation reorganization. Businesses and corporations develop a plan to continue operating the business while paying off their debt. For the repayment plan, both the court and the creditors should approve. Some individuals, such as real estate investors, with huge debts to make you qualify for Chapter 13, may also choose to file one under Chapter 11.

Chapter 12 Bankruptcy

It is an organized plan that allows fishers and family farmers to prevent foreclose on the debtor’s property or sell all their stuff. This Chapter is flexible and with higher debt limits.

Chapter 15 Bankruptcy

Chapter 15 is meant for international bankruptcies. It gives foreign debtors access to the United States bankruptcy courts.

Chapter 9 Bankruptcy

Chapter 9 bankruptcies are a repayment plan which allows cities, towns, districts, schools, etc., to plan and repay what you owe. To determine the Chapter that will work best for you, Porter ranch bankruptcy attorneys are always at your doorstep to help in case of a need.

Filing for Bankruptcy

Getting debt relief should not be expensive. If you cannot afford a Porter Ranch bankruptcy attorney, you can do so without one. California bankruptcy forms are categorized into national forms and local forms. The national forms are the same in bankruptcy filings in all California states, while local forms vary for every California district. Depending on your district, you should make your bankruptcy petition a success by filing the correct documents with all the necessary information. That will be possible with the help of qualified Porter Ranch bankruptcy attorneys. The following are the steps you will be required to follow to file your bankruptcy petition.

Collection of Bankruptcy Documents

You will be required to deliver your information for bankruptcy cases by submitting official forms to the court. The collection of documents with the information you will need will make the process easier for you.  To calculate your income, you should collect your stubs for paychecks from the past six months. If you are self-employed, you should document your income and have them ready. 

You should also have a list of the creditors to the court.  To get your creditors to report, you should review the collection notices you have been getting through or get a free credit report. With that, you won't miss any of your creditors.

Take Credit Counseling

You should complete a credit counseling session in the six months before you file your bankruptcy petition. In Porter Ranch, federal law requires you to enroll for the course with the approved providers for bankruptcy cases.  

You don't have to travel to complete this course; most credit counseling providers offer it over the phone or online. There is usually a small fee for undertaking the course; however, each service provider has its cost differences.

Completing the Bankruptcy Forms

Bankruptcy forms are usually the same for individuals who file in the same area of jurisdiction. Some of the national forms are easy to fill. If you hire a Porter Ranch bankruptcy attorney, they will ask questions that need to be answered to fill the bankruptcy forms. If you are using an app, it should walk you through the questions available on the forms. You need to review everything and ensure that you sign the forms carefully.

Payment of Filing Fee

If you earn less than 150% of the Federal laws' poverty guidelines, you can file a waiver of the filing fee. If you do not meet the minimum requirements for a waiver and cannot pay the full fee all at once - may be due to various issues, you can apply to have the fee paid in installments. If you can pay the full fee, you should come with it when you file your documents. You cannot use a debit or credit card to make the payment. Bankruptcy courts in California generally accept and use US Postal Service money orders from financial institutions like the major banks.

Printing the Bankruptcy Forms

Once you have taken credit counseling, collected your documents, completed the bankruptcy forms, and made a plan to pay the filing fee, you are ready to begin the filing process. If you filed the documents online, you should print them out twice to copy for your filing. When filing without help, many different forms make up the filing package, and you will need to have a checklist.

Filing of Bankruptcy Forms

There are four federal districts in California, meaning you can find out the district you need to file your case. You can do so by dropping the bankruptcy forms in person or mailing them to the court. If you are filing the petition without the help of a porter Ranch bankruptcy, you can file electronically. 

Mailing the Documents to Trustee

Once your Porter Ranch bankruptcy attorney helps you file the petition with the court, it will assign a trustee to handle your case. The bankruptcy trustee will sell all the non-exempt property and pay your creditors, depending on the type of debt you have. Most individuals who file for Chapter 7 do not have any non-exempt property.   The trustee may also send you a letter requesting you to send paycheck stubs, bank statements, and similar documents and your federal tax return.

Taking the Bankruptcy Course 2

The Bankruptcy Code requires you to take bankruptcy course two after filing for a bankruptcy petition, even if there’s nothing you could have done to avoid it. It is essential to enroll for this course from approved providers.  After completing course 2, your certificate will be filed in court.  If you don't complete the course, you won’t receive any discharge; and your case administration will continue. You mustn't forget this step because the discharge is usually the main benefit of filing this Chapter.

Advantages of Filing Chapter 7

You will have a fresh start. After the debts are discharged, the only debts you owe your creditors will be for the secured assets, which you sign a payment agreement.  You have protection against the creditor’s efforts to collect the debt from you and wage garnishment on the filing date. Wages you will earn and property you will acquire after the bankruptcy filing date are considered yours, not the creditors or the court. Your case is over and discharged in about 3-6 months.

Disadvantages to a California Chapter 7 Filing

You will lose your non-exempt property because the trustee sells it.  The defense against foreclosure on your home, if any, is usually temporary. The co-signers of debt can be stuck unless they also file for protection against collection by the creditors. You can only file a second petition eight years after the initial filing.

Find A Porter Ranch Bankruptcy Attorney Near Me

If you’re a risk of losing your assets and property to your creditors, contact the Los Angeles Bankruptcy Attorney to get help. Our qualified Porter Ranch bankruptcy attorneys will increase the chances of retaining your property by guiding you in filing the right petition. Contact us at 424-285-5525 for free consultations.