The following questions represent items of primary concern to most of our bankruptcy clients. We understand that every client and every case is unique. Therefore, in order to address your specific concerns, we encourage you to take advantage of our free consultation by calling the Hedtke Law Firm at 760 482-1737.
Commonly Asked Questions/Frequently Asked Questions (FAQs):
- How can bankruptcy help?
- What is the most common type of bankruptcy?
- Will I lose everything in bankruptcy?
- How does bankruptcy affect my credit?
- Will bankruptcy cause my utilities to be disconnected?
- Can I discharge student loan debt?
- Can I get my driver’s license back if it has been revoked due to an accident judgment?
- Should I file bankruptcy with my spouse?
- How much does it cost?
- Will bankruptcy stop individual lawsuits?
- How often can I file bankruptcy?
- What if I cannot make my Chapter 13 payment?
- How do I make an appointment for my free initial consultation?
How can Bankruptcy Help?
A bankruptcy is a legal proceeding in federal court. Its function is to relieve people with debt of their obligation to pay certain debts and to distribute assets, if any, to their creditors. The paperwork involved in filing a bankruptcy consists of a petition and schedules. The petition notifies the court and your creditors of your intention to seek court-ordered protection and relief from your financial obligations by filing bankruptcy. The accompanying schedules provide the court with an itemized list of your assets and your debts. Upon the filing of a petition, the court grants an automatic stay. The automatic stay acts as an injunction or a restraining order to prevent your creditors from bothering you. Once the case is filed, your creditors cannot call you, sue you, garnish your wages, disconnect your utilities, or harass you in any way. If your driver’s license was suspended or revoked due to an uninsured automobile accident you will, in most cases, be able to get your license back immediately upon the bankruptcy filing. If your utilities have been disconnected, we will make sure that your electric, telephone, and/or gas service is immediately reconnected.
What is the most common type of bankruptcy?
By far the most common types are Chapter 7 and Chapter 13. A Chapter 7 is a discharge of debts and a Chapter 13 is a payment plan. A Chapter 11 bankruptcy is a business reorganization and a Chapter 12 bankruptcy is a bankruptcy specifically for family farmers.
Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is a straight discharge of certain types of debt. In certain circumstances, a person with debt may have the option of keeping certain debts, if they so choose. Typically, people with debt in a Chapter 7 Bankruptcy are looking to discharge unsecured credit card debt, utility bills, back rent, medical bills, uninsured car accident judgments, deficiency amounts owed on repossessed or surrendered vehicles, and other similar debts. Generally, Chapter 7 Bankruptcy will not serve to eliminate debts derived from certain types of tax liability, government fines, forfeitures, restitution, criminal or fraudulent conduct, child and spousal support, drunk driving, most student loans, and debts resulting from intentional and malicious injuries.
Chapter 13 Bankruptcy
A Chapter 13 is a form of debt consolidation. Like Chapter 7, it is a procedure in federal court that begins with the filing of a bankruptcy petition and schedules. A Chapter 13 is different from a Chapter 7 in that, rather than providing for an outright discharge of the liabilities of the person with debt, it allows them to repay some or all of the debt over an extended period of time. Chapter 13 is typically chosen by people with debt who own a house or a car and are behind on their payments. In such situations, the Chapter 13 will prevent a foreclosure or repossession, and allow the person with debt to pay back the amount they are behind over a period of up to sixty (60) months. Unsecured debt is also repaid, although it is often at substantially less than 100 percent of what is owed. If the person with debt completes the plan, they will receive a discharge as to the remaining balance on any unsecured debt. In order for the court to approve a Chapter 13 plan, a person with debt must be employed or have some other source of reliable income. The Chapter 13 plan is typically funded by wage assignment.
Will I lose everything in bankruptcy?
No. Most clients may keep up to approximately $30,000 in assets. The law is very generous and allows for the person with debt to keep certain property deemed “exempt” in the bankruptcy. Any assets over and above the allowed exemptions could be seized by the trustee and distributed to creditors. Most situations are such that the assets of the person with debt fit within the allowed exemptions and the bankruptcy is deemed a “no-asset” case. In such cases, the person with debt is allowed to keep all of their property acquired prior to filing bankruptcy.
How does bankruptcy affect my credit?
A bankruptcy can stay on your credit report for up to 10 years. However, there are several things that can be done to rebuild credit scores after bankruptcy and it is not uncommon to rebuild your credit score back above a 700 within 12 months of your bankruptcy.
A bankruptcy will relieve a person with debt of their obligation to repay certain debts. Often people with debt are mistaken in believing that if they file a bankruptcy they will automatically have perfect credit. While bankruptcy will not automatically restore perfect credit it may often make rebuilding your credit easier.
Will bankruptcy cause my utilities to be disconnected?
With respect to utilities, the filing of a bankruptcy will generally prevent disconnection. While a person with debt will be obligated to pay their regular monthly bill in order to retain service, the back amounts owed may be discharged in bankruptcy. In cases where a utility has already been disconnected, the filing of a bankruptcy will allow for the immediate reinstatement of such service.
Can I discharge student loan debt?
As a general rule, government-backed student loans are no longer dischargeable in bankruptcy. The Higher Education Reauthorization Act (10-7-98) repealed the seven-year standard for dischargeability of student loans. Therefore, government- backed student loans are only dischargeable in cases of undue hardship.
Can I get my driver’s license back if it has been revoked due to an accident judgment?
Yes. Upon the filing of your bankruptcy petition, our office will fax your bankruptcy petition to the Department of Motor Vehicles to help you get your license back.
Should I file bankruptcy with my spouse?
In most situations it is advisable for a married couple to file a joint bankruptcy petition. California’s community property laws make a married couple’s assets and debts their joint property. Therefore, in cases where one spouse files for bankruptcy and one spouse chooses not to participate, a creditor of the filing spouse may look to assets of the nonfiling spouse for payment.
How much does it cost?
We are happy to give you an estimate of the fees and costs involved over the telephone. After we have an opportunity to meet with you, we will be able to evaluate your case completely and quote you an accurate fee.
Will bankruptcy stop individual lawsuits?
Yes. A bankruptcy filing will stop a lawsuit and prevent your creditors from placing a lien against your house or garnishing your wages.
How often can I file bankruptcy?
No. A debtor cannot obtain a discharge in a Chapter 7 case if the debtor obtained a discharge in (a) a Chapter 7 case filed within the past eight years, or (b) a Chapter 13 case filed within the past six years. The time periods in either case are measured from the commencement dates of the respective cases.
What if I cannot make my Chapter 13 payment?
If the debtor cannot make a Chapter 13 payment on time the Chapter 13 bankruptcy can be dismissed. Significant changes in the debtor’s circumstances may require that the plan be formally modified. If the problem is permanent and the debtor is no longer able to make payments to the plan, the trustee will request the case be dismissed or converted to another chapter.
How do I make an appointment for my free consultation?
Making an appointment is easy. Just call 760 482-1737 todayor send an email to email@example.com to make arrangements for your free initial consultation. We offer evening and Saturday hours, hours by appointment, and conference call hours for out-state clients. We are generally able to see you within one or two days of your call. If your situation requires immediate attention, we will make every effort to see you the same day that you contact our office.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.