If you are facing increasing debt and believe that a bankruptcy filing is necessary, you may have endless questions. Although your Los Angeles bankruptcy lawyer will provide detailed answers to each of your questions in person, below are answers to some frequently asked questions.
- What is Bankruptcy?
- How Do I Determine if I Can File for Bankruptcy?
- Will a Bankruptcy Filing Wipe Out all My Debts?
- Can Co-Signers be Protected in a Bankruptcy?
- My House is Up for Foreclosure. How Long Can I Wait to Decide to File for Bankruptcy?
- If I Have Previously Filed Bankruptcy, Can I File Again?
- Can a Trust File for Bankruptcy?
- Can I File Bankruptcy in California If I Have Lived Here for Less Than Two Years?
- Who Will Know If I File Bankruptcy?
- How Do I know if Bankruptcy is the Right Decision for Me?
- Can I File Bankruptcy and Still Keep My Car and House?
Bankruptcy is a federal court process designed to assist individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Upon filing either a Chapter 7 or Chapter 13 bankruptcy, a court order called an “automatic stay” goes into effect. This prevents most creditors from taking any action to collect the debts you owe them or from selling your house in a foreclosure unless the bankruptcy court lifts the stay and allows the creditor to process with their action.
To determine whether you can file for bankruptcy, you have consider various factors that will affect your ability to file bankruptcy. During the initial consultation, your Los Angeles bankruptcy lawyer will have a detailed and careful discussion with you to determine what will be in your best interest and provide the most effective debt relief possible. Your Los Angeles bankruptcy lawyer will look at factors such as your income, your interests in real estate, insurance policies, and other assets that may affect what kind of bankruptcy you should file to get the best results for you and your family.
Bankruptcy filing will wipe out most of your debt. While typically credit card debt, personal loans, cash advances, medical bills and even certain attorney fees are discharged through bankruptcy, certain debts cannot be discharged through bankruptcy. This means you will continue to owe them just as if you had never filed for bankruptcy. These debts include back child support, alimony, and certain kinds of tax debts. Student loans will not be discharged unless you can show that repaying the debt will be an undue burden. This is rarely successfully done. Your Los Angeles bankruptcy lawyer will go over your debt to determine what will and will not be discharged upon filing for bankruptcy.
Co-signers can be protected in certain bankruptcy filings. If you are concerned about protecting your co-signers, you should consult with your Los Angeles bankruptcy lawyer, Sanaz Sarah Bereliani, to determine which bankruptcy filing is best for your particular situation.
If you decide to file a Chapter 7 bankruptcy, creditors are still able to proceed with collection efforts against your co-signers, even if debt was discharged against you personally.
However, if you file Chapter 13 bankruptcy, a co-signer is protected if the following provisions are met:
- The debt must be a consumer debt;
- The debt cannot be incurred in the ordinary course of business;
- The co-signer cannot benefit from the proceeds of the debt; and
- The debtor must stick to the Chapter 13 bankruptcy payment agreement.
If you have a foreclosure date, Do NOT wait to the last minute to file for Bankruptcy. You should immediately contact your Los Angeles bankruptcy lawyer, Sanaz Sarah Bereliani, to discuss your options. It is important to note that although you cannot reverse a foreclosure once it has occurred, you can stop the sale of a house in a foreclosure by filing for bankruptcy. Although emergency petitions can be filed the week before the sale date, you should typically contact Bereliani Law Firm once you are falling behind on your mortgage payments or have received a Notice of Default as you have the most options.
Yes, you can file bankruptcy again if you have previously filed bankruptcy. Whether you file a Chapter 7 or Chapter 13 will depend on what chapter of bankruptcy you previously filed, whether or not you received a discharge of your debts, and how long ago you have filed bankruptcy. Although you can receive a discharge of debt only once every 8 years, in certain circumstances you file more than once every 8 years for bankruptcy protection. Your Los Angeles bankruptcy lawyer will explain this option to you in more detail after looking at your file.
The grantor or beneficiary of a Trust may file for bankruptcy as an individual, but the Trust as an entity does not qualify. Whoever is the beneficial owner of the assets of the Trust may file. For instance, if it is a revocable trust, then the grantor is still the owner and they would have to file. If however, the grantor of the trust has passed away, the beneficiaries who have now ‘inherited’ the assets of the trust are the rightful beneficial owners and they would be the one to file on behalf of the Trust as the interest has now vested in them. Only if the Trust is a business entity, not a personal trust, may the Trust file on its own, similar to a business bankruptcy.
To file bankruptcy, you need to meet the residency requirements of your state. You can file bankruptcy in California if you have lived in your current California city for the majority of the last 6 months. However to use the California property exemptions, you need to have lived in California for the majority of the last 2 years. Depending on your circumstances, you may be able to use the federal exemption guidelines, or the ones from the last state you lived in. To minimize error, it is recommended that you work with a Certified Bankruptcy Specialist to ensure that your petition is filed correctly.
Although, bankruptcy filing is a public filing, there usually is no likelihood that anyone will know you filed unless you disclose that information. When you file bankruptcy, your credit report will state “Filed Bankruptcy on [date of filing],” so anyone who has permission to pull your credit report will see that you filed. It will stay there for 10 years as that small notation. Further, if you fill out an application – ie credit card application, car loan, mortgage – you will have to answer Yes to having filed, but it will not deter you from getting credit or a new apartment/rental. Your bankruptcy records will only be “public” if someone actually goes through the effort of going to the bankruptcy court with your case number or social security number.
Decades ago, bankruptcy filings may have been published in the newspaper, but there is no news listing that reports this. There are hundreds of thousands of individuals that file bankruptcy each year, therefore, it is not realistic for such a publication.
How one deals with his or her debt depends on each person’s financial picture. Debt settlement is not the right answer for everyone, nor is bankruptcy. It is important to do a consult with a certified bankruptcy specialist so they can discuss your finances, your goals, and also calculate a means test through an in depth consultation. Further, bankruptcy may be the right option for you, but the timing is something to be considered to make sure you hold on to your assets and have a smooth case. These are determinations that an experienced lawyer can make in speaking with you.
The short answer is Yes, you can file bankruptcy and still keep your car and house. What to keep in mind is whether they are encumbered, meaning whether you have a mortgage or car loan. Bankruptcy is an opportunity for you to walk away with a fresh start. Therefore, if you are in a car loan that is too expensive or the car is too old, it is your opportunity to surrender it without a deficiency balance.
If you have a car loan or a mortgage and still want to keep these things, you definitely can, so long as you continue making your regular monthly payments. If you stop your payments when you file for bankruptcy, they cannot sue you for the deficiency balance, but they have a legal right to repossess or foreclose if you do not make payments.
If your car is paid off, then you may also keep your vehicle, but so long as it is protected properly by your bankruptcy attorney. It is important to choose an experienced attorney that knows how to exempt your assets properly so you get to keep as much as you can, if not everything.
We can Help
If you decide to file bankruptcy, you can silence your creditors and reclaim your phone, voicemail and mailbox. But in order to start a new life free of debt, you must hire your Los Angeles bankruptcy lawyer to successfully file for bankruptcy. To schedule a complimentary consultation with a Los Angeles bankruptcy lawyer, please contact Sanaz Sarah Bereliani at (310) 882-5482.