Frequently Asked Questions
Below are some of the questions and answers we are often asked. If there is a question which would help you determine if bankruptcy is the right choice for you, schedule a consultation and speak with an attorney.
Should I file for bankruptcy?
Filing for bankruptcy is big decision that is considered for a many reasons. Bankruptcy is often a viable option for you if: (1) your income is less than your household expense; (2) if you are falling behind on your mortgage or facing foreclosure; (3) behind on your car payment; (4) your vehicle has been repossessed; (5) your wages are being garnished; and (5) credit collectors are calling.
Bankruptcy can help solve the difficult financial issues that keep you awake at night, stop you from buying a new home, or getting the new job you want. Bankruptcy is the often the most efficient way to take control of your finances.
Do I qualify for bankruptcy?
Qualifying for bankruptcy depends substantially on your household income and to some degree on the amount and type of debts. Before we can determine whether you qualify for a bankruptcy it is important to identify your goals, review your finances, and identify the correct bankruptcy chapter to resolve your specific financial issues.
When will the Credit Collectors Stop Calling?
When we file your bankruptcy petition you will immediately receive the protection of the "automatic stay." The automatic stay immediately obligates creditors to discontinue any collection activities or risk violating the the automatic stay. During the bankruptcy creditors cannot garnish wages, levy bank accounts, attempt to recover cars, foreclose on real estate, repossess personal property, or cut off your utility service. Violating the automatic stay is a serious offense and subjects violating creditors to damages.
Will my belongings be sold to pay my creditors?
Your personal belongings can be protected up to a certain amount of value with various "exemptions" provided for under California law. There are two separate set of exemptions and when you file you have to select one set of exemptions - the 703's and the 704's.
In a Chapter 7 bankruptcy, you must turn over any property that is not exempt to the Chapter 7 Trustee who will arrange to sell the property and give the money to your creditors. Some debts may be "secured" - usually a house or car or mobile home. A secured debt is a debt where you have promised property as collateral. Usually you will need to give the property back to the creditor.
Unless you have real property with equity in excess of $30,825, most of your property is likely to be protected from sale under the 703 exemptions. If you have valuable property that you want to keep that is not covered by the exemptions you may have to consider a chapter 13 bankruptcy.