You might find yourself in a financial predicament, and your only solution could be filing for bankruptcy. You may decide to do so on your own, but it is faster and less tedious to use a bankruptcy attorney. Many factors might lead you to file for bankruptcy. The law allows you to do so either under Chapter 7 or Chapter 13, depending on your financial capability. Read on to understand more about filing for bankruptcy, especially in Warner Center.
If you want to file for bankruptcy in Warner Center, you should use a bankruptcy attorney to file for bankruptcy. At Los Angeles Bankruptcy Attorney, we are committed to helping you keep as much property as possible. We help keep creditor harassment at bay, help you avoid repossessions, foreclosures, and wage garnishments. We have more than 20 years of experience in bankruptcy cases and have helped many clients in their debt settlement cases.
What Might Lead You to File for Bankruptcy?
Some situations might prompt you to file for bankruptcy. The most common, though, is your inability to pay off your debts. Bankruptcy has serious financial repercussions. It can remain on your credit report for seven to ten years, depending on the type. With a damaged credit report, it becomes difficult to obtain credit. Banks become hesitant to extend loans. It also becomes hard to qualify for credit cards and mortgages.
If your finances take a hit, you have the right under the law to file for bankruptcy. All the proceedings are conducted in the federal court and carried out according to federal law. However, different states have different features of bankruptcy. In Warner Center, you can file for bankruptcy under Chapter 7 or Chapter 13. When you file for bankruptcy under Chapter 7, you liquidate your disposable assets and repay your debts. Under Chapter 13, you work out a repayment plan with your creditors. You must meet specific parameters for the court to decide if you qualify to file for bankruptcy under Chapter 13 or Chapter 7.
Bankruptcy gives you a fresh financial start since it stops constant harassment from creditors. It gives you a chance to rebuild your finances. Although bankruptcy is a viable option, there are other avenues you can pursue to get out of your financial distress. You can renegotiate payment terms with your creditors. You can, for example, reschedule the payment plan such that you pay smaller installments for longer. You can seek forbearance. Here, you ask the creditors to postpone payments for a while. You could also ask the bank or credit card company to reduce your interest for the remainder of the loan.
However, in some situations, bankruptcy might be the only viable option. It is highly advisable to use the services of a well experienced Warner Center bankruptcy attorney. In Warner Center, filing for bankruptcy is a complicated process. When you use the Los Angeles Bankruptcy Attorney, you will be in a better position to understand your legal options when filing for bankruptcy. You will know the best bankruptcy type to file and have the chance to save more property from creditors.
Types of Bankruptcy You Can File in Warner Center
Chapter 7 Bankruptcy
BChapter 7 bankruptcy is the quickest and fastest bankruptcy options. Many people also refer to it as a fresh start bankruptcy, real bankruptcy, or complete bankruptcy. Under Chapter 7, you liquidate your disposable assets to pay off your creditors. Some assets like your vehicle, primary residence, tools of the trade, social security, veteran checks, and pension are exempt from liquidation. Non-exempt assets include additional vehicles, valuables like jewelry or collectibles, investment, and bank accounts. These are sold off and the proceeds distributed to your creditors. A trustee appointed by the court oversees the entire process. After the completion of the process, your debts will be discharged. The discharge of your debts means that creditors can no longer harass you to repay the loans.
Some debts, though, are not exempt from repayment. They include child support, student loans, and taxes.
In Warner Center, special laws apply to homes and cars in a bankruptcy proceeding. If you are married, you can keep your home equity up to $175,000. Should you be over 65 years, you can keep maximum home equity of $175,000. If you are 65 and below and single, the limit for your home equity is $75,000. That is why you need to use the services of a Warner Center bankruptcy attorney who is well versed with the specific laws which govern bankruptcy proceedings in the city.
The Criteria the Courts Use to Determine If You Are Eligible for Bankruptcy Under Chapter 7
There are various criteria the courts in San Fernando Valley use to determine if you qualify for bankruptcy under Chapter 7. The aim is to make sure you have no means whatsoever to repay your debts. The criteria is also a means of discouraging people from acquiring debt carelessly. When you file for bankruptcy, you get protection from creditors. They cannot sue, garnish, write or call you concerning the loan. Once the court issues a discharge, creditors can never conduct collection activity on your property.
The first criteria the court uses to determine your eligibility to Chapter 7 is the Means Test. To qualify for Chapter 7 bankruptcy, your earning after deduction of your living expenses must be below the family’s mean income, the same size as yours in Warner Center. The court will use your earnings over the past six months to determine your mean income.
The court’s second criteria to determine if you qualify for Chapter 7 bankruptcy is the period that has elapsed since you filed for bankruptcy. The court cannot accept your bankruptcy filing if eight years have not elapsed from the time you filled for another Chapter 7 bankruptcy. If you have filed for a Chapter 13 bankruptcy, you have to wait for four years before filing for a Chapter 7 bankruptcy. It is prudent to use a Warner Center bankruptcy attorney’s services to make the process easier.
Chapter 13 Bankruptcy
Unlike Chapter 7 bankruptcy, with Chapter 13 bankruptcy, you do not sell your assets to repay your debts. Rather, you reorganize your payment plans with your creditors under the direction and supervision of the court. In Warner Valley, while filing for bankruptcy, the courts appoint a trustee through whom you make the payments to the creditors. You are eligible for bankruptcy under Chapter 13 if you are married, single, or run an unincorporated business. The debt reorganization under Chapter 13 is also known as the wage earner’s plan. Here, you have to commit to paying your creditors within three to five years. You should consult the Los Angeles Bankruptcy Attorney before you come up with this repayment plan.
Under the reorganized payment plan, you must pay the creditors the same amount of money they would receive under other forms of bankruptcy filings. You should use Los Angeles Bankruptcy Attorney to draft a payment plan which is favorable. Once the creditors accept the plan, they cannot change it at a later date. Under Chapter 13 bankruptcy, the trustee receives the payment from you and distributes it to your creditors. When filing for bankruptcy under Chapter 13, you must compile all your assets, all your creditors and the amount you owe each, your sources of income, and your living expenses.
You cannot qualify for Chapter 13 bankruptcy if your debt is more than $ 419,000 for unsecured debt and $ 1,257 000 for secured debt starting from February 2019 to February 2022. The minimum debt amount has a three-year incremental interval. You must also undergo credit counseling, upon which you will receive a certificate once you complete the sessions. The court will reject your bankruptcy filing if you do not present the credit counseling certificate.
Chapter 13 is a great option if you do not qualify for Chapter 7 bankruptcy. Under Chapter 13 bankruptcy, there are secured creditors and unsecured creditors. Unsecured creditors do not have collateral attached to your debt. They include personal loans, medical bills, and credit card balances, among others. Since unsecured creditors do not have any collateral, they cannot automatically repossess your assets.
Unsecured creditors must file a case to force you to repay the debt. An experienced Warner Center bankruptcy lawyer will help you develop a payment plan to settle unsecured debts. Once the creditors accept the payment plan, they cannot change it later. Additionally, when the repayment period elapses, they cannot demand any balance since your debt is discharged.
Secured creditors, on the other hand, have collateral attached to your debt. The collateral might be your house, boat, motor vehicle, or farm. Once you default on a payment, the debtors have the right to sell off the collateral to pay off the loan. Under Chapter 13 bankruptcy, it is possible to keep your collateral provided you make the monthly payments you agree with your creditors.
To keep your house or motor vehicle, you need what is known as a Chapter 13 payment plan. The plan is very complex as the creditors might impose very harsh repayment terms. This is where you need the experienced Los Angeles Bankruptcy Attorney’s services to negotiate a favorable Chapter 13 repayment plan with your creditors.
Chapter 11 Bankruptcy
Chapter 11 Bankruptcy is usually used by large organizations since it is expensive and a complicated process. In a nutshell, though, the organization works out a repayment plan with its creditors as it continues with its operations.
Fees Charged in Warner Center for Filing for Bankruptcy
Apart from the fee your Warner Center bankruptcy attorney charges, the court also charges around $330 for filing the bankruptcy case. The fee is the same for individuals and couples. You pay the fee upfront, or at the time you file the case with the court. If your income is less than 150% of the Federal Poverty Level, the court can waive the fee. It is possible to pay the fee in 4 installments and within 120 days from the date you file for bankruptcy. That is why you need to use the services of an experienced firm like Los Angeles Bankruptcy Attorney to help you take advantage of such waivers when you file for bankruptcy in Warner Center and the larger California State.
Reprieve Offered by Filing for Bankruptcy
Once you file for bankruptcy, you get a reprieve from your creditors. The reprieve comes once the court issues a discharge against your debts. A discharge means creditors cannot come after you any longer to demand repayment. They cannot sue, write or contact you in any way concerning the debt. The creditors will receive a letter of discharge, and so will your attorney. The U.S Trustee Program, which is found at the Department of Justice, will also receive a copy of the discharge. If a creditor contacts you after receiving the discharge, they can face fines.
Under Chapter 7 bankruptcy, the court will issue the discharge four to six months after filing for bankruptcy. For Chapter 13, the court usually issues the discharge after completing the three to five-year repayment plan.
Rebuilding Your Credit Score After Filing for Bankruptcy
Your credit score will take a hit after filing for bankruptcy. But you can rebuild it by applying for a secured credit card. With a secured credit card, you deposit a certain amount with the issuing bank and receive the credit card. As you make timely monthly payments on the credit card, you continually improve your credit score.
Call A Warner Center Bankruptcy Attorney Near Me
You might find yourself in a situation where bankruptcy is the only viable option to solve your harsh financial crisis. If you want to file for bankruptcy in Warner Center, you could contact the Los Angeles Bankruptcy Attorney. We are experienced in bankruptcy cases and have helped many people file for various bankruptcy types. Call us at 424-285-5525 at any time of the day or night.
