You don’t have to face your problems alone. We pride ourselves in our ability to provide personal and compassionate assistance on each of our cases. One of the roles of a bankruptcy lawyer is to give clients the hope of a fresh start, which we do nearly every day. Our experience allows us to act quickly on your matter if an emergency arises. Only a bankruptcy attorney can register with the bankruptcy court to file your case electronically, 24 hours a day. Our firm is a proud member National Association of Consumer Bankruptcy Attorneys.
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What is Bankruptcy?
Bankruptcy is a legal way to avoid paying your debts. When a person is discharged in bankruptcy, he or she is relieved from liability for most debts incurred before the bankruptcy was filed and protected from future collection of those debts. The purpose of bankruptcy is to give you a fresh start and the bankruptcy code is interpreted by the Courts to give effect to these words.
What Kinds of Bankruptcy Are There?
Chapter 7: This is the most common type of bankruptcy. Individuals who file Chapter 7 are trying to free themselves of debt through a bankruptcy discharge. Although businesses normally do not receive a discharge, corporations and partnerships may use Chapter 7 to liquidate and close their business.
Chapter 11: Corporations, partnerships, and sole proprietors wishing to remain in business and reorganize their financial affairs may file Chapter 11. These debtors seek to restructure their debts, either by reducing the debt or by extending the time to repay. A Chapter 11 plan can also be used to liquidate all or a portion of a debtor’s assets.
Chapter 12: Chapter 12 is designed for “family farmers” or “family fishermen” with “regular annual income.” It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts. Under chapter 12, debtors propose a repayment plan to make installments to creditors over three to five years.
Chapter 13: Chapter 13 is for individuals with regular income who want to reorganize their financial affairs. The debtor proposes a repayment plan, say to catch up on the arrears on their home mortgage. Only individuals and sole proprietors are eligible for Chapter 13, which is simpler and much less expensive than a Chapter 11. The payment plan can last three to five years depending on the debtor’s income.
What’s Involved in Filing for Bankruptcy?
A bankruptcy is started by filing a Petition with the U.S. Bankruptcy Court. The requirements for the petitions vary depending on the Chapter under which the bankruptcy is filed, but involve detailed forms and schedules. Attorneys fees generally range from $1500-$2500 for a Chapter 7 bankruptcy. Fees for a Chapter 13 bankruptcy will generally be $3600 in a consumer case and $4350 in a business case.
Our fee quote will include the “out-of-pocket” costs to file your bankruptcy. The filing fees for a bankruptcy filed in San Diego County are $335 for a Chapter 7 and $310 for a Chapter 13. Other potential costs include the mandatory credit counseling classes and obtaining a copy of your credit report.
Bankruptcy is very complicated and it is extremely difficult for a debtor to file for bankruptcy without the help of an attorney.
Will I Lose Everything If I File?
A person who files for bankruptcy may exempt certain items from the bankruptcy. In most cases, this lets you keep your home, your car, your furniture, your household items, your retirement and most, if not all, of what you have. Different states have different allowances for exemptions. You also can keep assets that have no equity, such as a car that’s worth less than is owed on it, or a house where the mortgage is higher than the property value. Even if there is a small amount of equity, you can normally keep the asset.
Can All My Debts Be Wiped Out?
There are certain debts which cannot be discharged. Federal and state taxes incurred less than three years before the date of filing (although you may get more time to pay them back), student loans (except where you can show “undue hardship”), child support and alimony are the big ones.
How Do I Keep My House and Car?
If your payments are current, you have to keep making them. If you’re behind, you can pay the arrearage through a Chapter 13 Plan and re-start the payments after you file. If you owe more than what the vehicle is worth, you maybe be able to obtain financing and purchase the vehicle for the fair market value.