Frequently Asked Questions About Bankruptcy

Here are some of the inquiries received by the attorneys while serving clients in the San Fernando Valley. When you have any question regarding debt and how a debt relief remedy, such as bankruptcy may benefit you, a qualified lawyer stands ready to answer. Take advantage of a free consultation because the firm is here to serve you.

What is bankruptcy?
Are you presently experiencing out-of-control debt? Bankruptcy is a legal procedure available to consumers who are unable to pay financial obligations as they come due such as rent or mortgage, utility bills, auto loans and credit card payments. It is a consumer protection law that allows you to have some or all of your debts forgiven. When you face overwhelming debt, bankruptcy allows you to address your financial condition through cancellation or restructuring of your debt.

Different from most legal remedies, bankruptcy laws focus on forgiveness rather than punishment. When bad things happen to good people, bankruptcy can be the help you need to deal with creditors you simply can't afford to pay.

Bankruptcy can be a powerful debt relief tool to handle overwhelming debt. While new rules implemented in 2005 have placed some limitations on protections bankruptcy can provide, an attorney from Price Law Group can help most individuals burdened by heavy debt in filing either a Chapter 7 or Chapter 13 bankruptcy remedy in federal court. A free consultation to discuss the particulars of your case will provide you the answers you need to decide which bankruptcy option is best for you.

Can't I file bankruptcy on my own?
Yes you can. Any choice affecting you and your family's future, however, should be taken with full knowledge of the consequences. The action should result in your ability to restore financial security. If you file an incorrect form, provide too little or wrong information, or fail to meet a time restriction, you take risks which may further complicate your situation. It is always in your best interests to engage a qualified, knowledgeable bankruptcy attorney to assist you to obtain the best results possible when you are experiencing out-of-control debt. A consultation is free.

Who qualifies for bankruptcy?
Most individuals who have heavy, overwhelming debt and limited resources will qualify for bankruptcy. By taking the exact steps provided for in the applicable laws, you may qualify for a Chapter 7 or a Chapter 13 bankruptcy. A Chapter 7 requires a "means test." This is the formula, differing from state to state, for determining whether your income and assets fall below a specified level for the area you live in and, if found to be so, qualifies you for this type of bankruptcy remedy. A Chapter 13, often called "wage-earner's bankruptcy," provides individuals in higher income brackets who have a steady income to relief from creditors and debt, through a creditor repayment plan. There are benefits to both remedies and most individuals qualify for one or the other form of bankruptcy relief.

Does filing allow me to get rid of all debts?
Filing a Chapter 7 halts creditor abuse and cancels most of the debt you have built up. Certain debts, such as student loans, support payments and tax debts are not dischargeable under bankruptcy law. You may be able to eliminate interest and reorganize debts for ease of repayment. With the assistance of an experienced bankruptcy attorney, these and other forms of debt settlement remedies may be available options in your situation.

When do I get relief from creditor harassment?

Immediately. As soon as you call the offices and take advantage of a free consultation, the firm can take the steps to have all creditor calls directed to an attorney at Price Law Group. No more credit card payments and no more harassment immediately.

What does "secured" or "unsecured" debt mean?
A "secured debt" is one with an item of value listed and held as a guarantee that you will pay the debt. Common secured debts include mortgages, car and motorcycle loans. An "unsecured debt" is one which has no claim to a real asset, such as credit card debt.

Which debt solution is best for me?
An attorney from Price Law Group will meet with you to discuss your particular financial situation. Determining the best solution for you will be based on your goals and legal options. Bankruptcy is certainly one option, but other debt relief remedies may be more applicable to your circumstances.

For instance, loan modification, debt settlement or an insurance settlement may be more appropriate and put you back on track financially. Possibly a short sale negotiation would be the best option, or you may need an attorney to help facilitate a tax resolution with the IRS. Contact one of the attorneys today for a free consultation.

What are the types of bankruptcy protection available to individuals?
Chapter 7 bankruptcy is the type most often used by individuals. It allows complete discharge or clearing of most (or all) of your debt, quickly, in an abbreviated time frame. An "automatic stay" stops creditors from collecting debt from you. It puts an immediate end to creditor abuse, collection letters, wage garnishments, lawsuits and bank levies.

If you are a disabled veteran and incurred your debt while on active military duty, or if your debts primarily come from the operation of a business, you will automatically qualify for Chapter 7 bankruptcy.

In a Chapter 13 you must have sufficient disposable income to fund a repayment plan. Most individuals needing debt relief who do not qualify for Chapter 7, will qualify for bankruptcy under Chapter 13. Chapter 13 allows individuals to settle their debt through an affordable repayment plan. The "automatic stay" applies as in a Chapter 7 filing.

You may not file for a Chapter 7 if you have filed for the same relief in the past 8 years. In the case of Chapter 13, a period of 6 years must have elapsed to file for this debt remedy again. Further, as soon as you call the offices and take advantage of a free consultation, The firm can take the steps to have all creditor calls directed to an attorney at Price Law Group. No more harassment immediately.

Does filing for bankruptcy mean I will lose my home, car and other property?
Generally, the vast majority of people who choose bankruptcy as a debt relief solution, do not lose their property in bankruptcy. When you cannot pay your mortgage, then your home lender may begin foreclose proceedings on your home, which means that you may lose your home. Filing a timely bankruptcy is a widely used foreclosure prevention remedy.

You may be more at risk of losing property if you don't file bankruptcy, as creditors can sue you to attach your bank accounts, start wage garnishment and attach and seize your property. As a result, you may miss rent, mortgage or car payments, making it difficult to provide for even your most basic necessities. When it comes to your home and car(s), there are restrictions, but when you file bankruptcy, you are less likely to lose them since, by filing, you would be in a better position to make regular monthly payments. Further after filing, the qualified bankruptcy attorneys can assist you with credit repair steps to help stabilize your financial future.

Will I lose my Social Security payments if I file?
No. You will not lose your Social Security payments.

Does a bankruptcy affect my credit?
Future lenders will likely consider your bankruptcy when making a decision to loan you money or issue credit to you. The point to keep in mind is your credit rating may already have become quite low or will become lower as you go further in arrears on your obligations. A positive aspect to bankruptcy is those in very serious, credit difficulty, may see an improvement in their credit in as little as a year after bankruptcy. Laws exist to prevent unlawful discrimination against individuals who have filed bankruptcy. Another positive aspect to keep in mind is a qualified bankruptcy attorney is experienced in the use of many credit repair tools to help you rebuild your credit.

Hasn't Congress made it harder to file bankruptcy?
It is true in 2005, federal bankruptcy laws were changed, creating more stringent requirements for certain individuals to file for bankruptcy. The changes introduced stricter requirements for attorneys, as well, with guidelines that must be satisfied regarding documentation and valuation of assets. Still, most people are eligible to file either a Chapter 7 or Chapter 13 bankruptcy. Skilled and knowledgeable legal counsel who understand s how these new regulations apply in any situation could assist you through to a successful outcome in filing for bankruptcy. Time limitations do apply. Take advantage of a free consultation with an attorney from the Price Law Group. It could be a vital step for your future wellbeing and your family's security.

What happens if I discover another creditor debt after filing?
Your bankruptcy attorney can amend your case to include any additional debts you may find after the case is filed.

What happens when one spouse files without the other spouse?
Financial problems can cause division in even the strongest of marriages. Before filing bankruptcy without your spouse, it is always important for both of you to speak to an attorney about the benefits and disadvantages. The spouse who does not file may be responsible for some of the debt.

When will my debt be discharged?
In most cases, a discharge under Chapter 7 is received 60 days after the first meeting of creditors. In Chapter 13, discharge is sent to you once you have completed the payments under the plan.

Why hire a bankruptcy attorney?
A knowledgeable, caring attorney can offer immediate answers and action in a time of financial crisis. When you are in need of debt relief, an attorney who understands all the remedies can tailor the right solution based on your circumstances. A bankruptcy proceeding is one option. With a thorough look at your financial situation, another debt relief remedy may be more suitable to your needs. A loan modification, debt settlement or an insurance settlement may be a better solution for you, eliminating the need for bankruptcy. A tax resolution would solve financial difficulties in many situations.

Our attorneys are fully capable of assisting clients with any of these solutions, and with credit repair and estate planning concepts as well. With over 20 years of experience and tens of thousands of individuals assisted to more secure, brighter futures, it would be to your benefit to call for a free consultation at your earliest opportunity.