There are times in your life when you have so many debts and feel helpless. The endless creditors’ calls and letters become a thorn in your flesh. With a family to look after, the idea of foreclosing on your home will weigh on your mind. When you feel like you have reached the end, you have nowhere else to turn to when it comes to settling your debts, contact a bankruptcy attorney.
At the Los Angeles Bankruptcy Attorney, we will offer you the necessary advice regarding filing for bankruptcy. At times, you may find that filing for bankruptcy is not the best option for you, and a bankruptcy attorney will help you come up with a repayment plan that will be beneficial to you and your creditors. Other times your financial situation may be dire such that a repayment plan is not feasible, so filing for bankruptcy may be the best action to take.
Filing a bankruptcy petition offers you a legal way to solve your financial issues. With a bankruptcy petition, you are in a position to avoid huge repercussions brought by large debts like having wage garnishments and property foreclosure. Work with our experienced Valley Village bankruptcy attorneys, and avoid unnecessary risks.
Benefits of Filing for Bankruptcy
Some of the benefits that you will reap when you contact a bankruptcy attorney include:
When your attorney files for a bankruptcy petition, it immediately creates an automatic stay. An automatic stay offers you a reprieve from the constant creditors’ calls. It stops them from contacting you in any form and prevents the creditors from repossessing your car, foreclosing on your property, or enacting wage garnishments.
Cancel All Dischargeable Debts
A bankruptcy petition will cancel most of your debts, offering you a clean slate to start afresh financially. You may pay some debts that are not dischargeable under Chapter 7 or the reorganization plan under Chapter 13. but bankruptcy will eliminate most of your debts.
Offer you an opportunity to make Back Payments.
When an automatic stay stops creditors from foreclosing on your home, you receive an opportunity to pay back payments on the said property. You have to note that bankruptcy does not eliminate mortgage, and you need to ensure you make all your payments.
Stop Vehicle Repossession
When you file for bankruptcy, it will stop your creditors from repossessing your car, and at times it can force them to return your repossessed vehicle. The return of your repossessed vehicle will happen under some particular circumstances.
Curtail Bank Levies and Wage Garnishment
Wage garnishment is your creditor’s ability to have a certain percentage of your wage to help clear your debt. When you apply for bankruptcy, it will stop your creditors from imposing wage garnishment and bank levies on your money.
When you contact a Valley Village bankruptcy attorney, they will explain in detail the different types of bankruptcy options available to you and offer advice on the options that suit your circumstances. There are four types of bankruptcies: Chapter 7, 11, 12, and 13. Out of these types of bankruptcies, chapter 7 and chapter 13 are the common ones.
This type of bankruptcy is commonly known as liquidation, where a bankruptcy trustee sells your nonexempt assets to settle your debts. A bankruptcy trustee has the authority to sell your assets and then pay your unsecured creditors. Once this process concludes, your remaining unsecured debts are discharged. Examples of unsecured debts are; medical and credit card debts.
In most cases, secured debts such as auto and mortgage loans are not fully discharged until you surrender their collateral. This means that if you have any secured creditors, they may foreclose on your property or repossess your vehicle if you do not meet the payment as agreed. Your liability is, however, discharged when your creditors foreclose on your property and sell them. Your secured debt is fully discharged when your creditors use the proceedings of foreclosure to settle your debt, whether the amount is enough to cover the debt or not.
Who is A Bankruptcy Trustee?
This is a person appointed by the U.S Trustee, or an officer in the Department of Justice, to represent your estate in bankruptcy proceedings. Their responsibility is to evaluate your property and to make recommendations per the United States Bankruptcy Code. The final authority in distributing your property in a bankruptcy proceeding is the bankruptcy judge, and a bankruptcy Trustee will only act when they receive a bankruptcy court approval.
A bankruptcy Trustee has the mandate to sell a non-exempt property. In California, you have two choices regarding exemptions that will protect your property in bankruptcy proceedings. These exemptions are:
System 1 (CCP 704 exemptions)
If you decide to choose these exemptions, you will protect a certain amount of your real property’s equity, which is your primary residence. Your principal residence can either be a personal or real property where you reside when you file for bankruptcy. It may include a boat, mobile home, community apartment, condominium, or planned development. This amount ranges from $75,000 for a single person with no disability, and a family can protect up to $100,000. You can protect up to $175,000 when you are aged above 65 or have a mental or a physical disability.
You can apply for homestead exemptions when your creditors try to force you to sell your principal home, and you are:
- A single person aged above 55 and your earnings per year are below $25,000.
- You are a married person aged above 55, but your earnings are less than $35,000 annually.
Motor Vehicle Exemptions
This exemption will protect the equity of your truck, car, or motorcycle. Under CCP 704.010, the exemption is up to $3,325.
- According to CCP 704.020, you may have both personal and household items exempted.
- Any building material you intend to use for home improvement is equivalent to a sum of money up to $3,500 (CCP 704.030).
- According to CCP 704.080, if you have any bank deposit as a single person from your social security, you may have $3,500 exempted. For a married couple, the amount arising from your social security payment will be up to $5,250.
According to California CCP 704.070, you may have up to 75% of your wages, which are paid within 30 days, protected during bankruptcy proceedings.
Tools of Trade
You will need to protect your trade tools during bankruptcy proceedings as you will need to move on after the proceedings. Valley Village bankruptcy attorneys are committed to ensuring that you have a life post-bankruptcy and will work with you to ensure you have your tools of trade exempted. Your trade tools like uniforms, commercial vehicles, books, tools, and other things are essential to earning your daily bread. CCP 704.060 allows you to have up to $8.725 in exemptions if you work alone or $17,450 if you work together with your spouse.
System 2 (703 exemptions)
Under California Code of Civil Procedure 703.140(b), system two exemptions can only be applied during bankruptcy proceedings. You will find that some states don’t allow System 2 exemptions. For more information on system two exemptions that you can enjoy in California, contact Valley Village, bankruptcy attorneys.
Under California CCP 703.140(b), you can have your home equity exempted up to $26,925.
Motor Vehicle Exemptions
You can also protect your car’s, truck, or motorcycle equity of up to $5,850, among other exemptions.
When it comes to your personal property, CCP 703.140(b) protects the following:
- Instead of a homestead exemption, you may protect up to $29,275 in a burial plot.
- The amount you can protect in jewelry will be up to $1,750.
Tools of Trade
Under California Code of Civil Procedure 703.140, you can protect your trade tools like books, uniforms, and trade implements, among others amounting to $8,725.
You will have to consult with a Valley Village bankruptcy attorney for more information on what exemptions you can have when filing for a chapter 7 bankruptcy petition. Our experienced attorneys will ensure that you keep almost all your property using exemptions.
Chapter 7 Debt Discharge
A debt discharge is the court's ability to release you from your liability over most debts. When you receive a discharge, your creditors can no longer harass you or collect from you. You should consult with a competent attorney to ensure you understand the intricacies that surround a bankruptcy discharge. Once you have met with your creditors, a court may issue a discharge after 2-3 months.
Chapter 7 Debt Discharge Denial
Sometimes a court may deny you a debt discharge due to the following facts:
- If you fail to produce your financial records,
- If you do not have a satisfactory explanation for a lost asset,
- If you do not obey bankruptcy court orders,
- When you do not complete an approved financial management class,
- When you conceal, transfer, or destroy property that would have been part of the bankruptcy estate.
This type of bankruptcy is referred to as a reorganization one; it involves making some adjustments to your loan repayment plan. You will need to prove that you can create structured loan repayment in 3-5 years. To file this type of bankruptcy, you will have to attend credit counseling before filing the petition.
Once you complete the credit counseling session, you must pay the required filing fee and then provide the relevant documents to the bankruptcy court. You do not have to worry about submitting the forms, as our competent attorneys will ensure you do. We will ensure that the court receives the relevant information regarding your income, expenses, and debts.
After the submission of relevant documents, a bankruptcy trustee will oversee your case and review it. The trustee’s role is to request information from you, communicate with your creditors, and hold a meeting with the creditors. A Valley Village bankruptcy attorney will ensure that you file a suitable repayment plan with the court, and once the court approves, your Chapter 13 bankruptcy petition is complete.
What Happens when you file a Chapter 13 Bankruptcy?
According to the rules governing Chapter 13 bankruptcy, your creditors can longer harass you due to the automatic stay that becomes effective immediately after filing for bankruptcy. The automatic stay stops your creditors from any attempt to collect on your debt. Any lawsuit against you must stop, and your property will be safe from foreclosure when the stay is in effect. There is, however, some collection activities that will continue even with the automatic stay in effect like:
- Child support,
- Repayment of tax debt,
- Spousal support,
- Pension loans.
Chapter 13 Bankruptcy Qualifications
To qualify for this type of bankruptcy, you must show you intend to pay back all your priority debts and secured creditors. You must also pay back some of the debts you owe to your unsecured creditors. A “secured debt” is a debt with collateral like real property backing it, while a “priority debt” includes back taxes and child support. “Unsecured debt” is any debt that does not have collateral backing it, like credit card debts.
You will have to show a bankruptcy court a repayment plan that includes an arrangement on how you will repay all your secured and priority debts in full. This repayment plan will also require that you make repayment plans for your unsecured creditors an amount that is equivalent to the value of your nonexempt property. Once a repayment plan is in effect, the bankruptcy trustee will ensure that creditors receive the agreed-upon monthly payment from you.
Contact a Valley Village Bankruptcy Attorney Near Me
Once you have made up your mind to file for bankruptcy in Valley Village, you should work hard to ensure you are back on your feet after completing the process. Bankruptcy offers you a chance to meet your financial obligations, and at the same time, boost your credit score. At Los Angeles Bankruptcy Attorney, we will help you file for bankruptcy and plan how to repay the debts. Our attorneys are a phone call away. Contact us at 424-285-5525 and schedule a consultation.