The Bankruptcy Attorney You Want On Your Side

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Hiring a Santa Barbara bankruptcy attorney is critical to your success if you are trying to navigate your way out of this complex process.  It is always a good idea to check the references of the attorney and have an initial phone consultation to get a feel for how they charge and what their process is like.

A bankruptcy case normally begins by the debtor filing a petition with the bankruptcy court. A petition may be filed by an individual, by a husband and wife together, or by a corporation or other entity. The debtor is also required to file statements listing assets, income, liabilities, and the names and addresses of all creditors and how much they are owed. The filing of the petition automatically prevents, or “stays,” debt collection actions against the debtor and the debtor’s property. As long as the stay remains in effect, creditors cannot bring or continue lawsuits, make wage garnishments, or even make telephone calls demanding payment.

The federal judiciary proves public access to federal appellate, district and bankruptcy court documents through Public Access to Court Electronic Records (PACER), an electronic public access service.

Bankruptcy cannot, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:

  • Eliminate certain rights of “secured” creditors. A “secured” creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if your property is taken. Nevertheless, you generally cannot keep the collateral unless you continue to pay the debt
  • Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, some student loans, court restitution orders, criminal fines, and some taxes.  
  • Protect cosigners on your debts. When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan.- Discharge debts that arise after bankruptcy has been filed.

You cannot receive a discharge in a Chapter 7 case if you received a discharge under a Chapter 7 case filed in the last eight years or a Chapter 13 filed in the last six years.  You cannot receive a discharge in a Chapter 13 case if you received a discharge under a Chapter 7 case filed in the last four years or a Chapter 13 filed in the last two years.  If didn’t received a discharge in the previous bankruptcy filing, depending on why this is the case, you can file and receive a discharge without any time restrictions.

  • There are four types of bankruptcy cases provided under the law:
  • Chapter 7 is known as “straight” bankruptcy or “liquidation.” It requires a debtor to give up property which exceeds certain limits called “exemptions”, so the property can be sold to pay creditors.
  • Chapter 11, known as “reorganization”, is used by businesses and a few individual debtors whose debts are very large
  • Chapter 12 is reserved for family farmers.
  • Chapter 13 is called “debt adjustment”. It requires a debtor to file a plan to pay debts (or parts of debts) from current income.

Most people filing bankruptcy will want to file under either chapter 7 or chapter 13. Either type of case may be filed individually or by a married couple filing jointly.  

In a bankruptcy case under chapter 7, you file a petition asking the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for “exempt” property which the law allows you to keep. 

In most cases, all of your property will be exempt. But property which is not exempt is sold, with the money distributed to creditors. If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, a chapter 7 case probably will not be the right choice for you. That is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt. 

In a chapter 13 case you file a “plan” showing how you will pay off some of your past-due and current debts over three to five years. The most important thing about a chapter 13 case is that it will allow you to keep valuable property–especially your home and car–which might otherwise be lost, if you can make the payments which the bankruptcy law requires to be made to your creditors. In most cases, these payments will be at least as much as your regular monthly payments on your mortgage or car loan, with some extra payment to get caught up on the amount you have fallen behind. You should consider filing a chapter 13 plan if you:

(1) own your home and are in danger of losing it because of money problems; (2) are behind on debt payments, but can catch up if given some time; (3) have valuable property which is not exempt, but you can afford to pay creditors from your income over time.

You will need to have enough income in chapter 13 to pay for your necessities and to keep up with the required payments as they come due.

Covid-19 Creates Bankruptcy Tidal Wave

The number of people filing for bankruptcy could set records next year. And, while bankruptcy reform artificially spurred the 2005 record of nearly 2.1 million cases filed, this peak will be all about the reality of a Covid-19-blasted economy. That’s a bankruptcy tidal wave of a different color. Read More

Covid-19 Creates Bankruptcy Tidal Wave

The number of people filing for bankruptcy could set records next year. And, while bankruptcy reform artificially spurred the 2005 record of nearly 2.1 million cases filed, this peak will be all about the reality of a Covid-19-blasted economy. That’s a bankruptcy tidal wave of a different color. Read More 

Covid-19 Creates Bankruptcy Tidal Wave

The number of people filing for bankruptcy could set records next year. And, while bankruptcy reform artificially spurred the 2005 record of nearly 2.1 million cases filed, this peak will be all about the reality of a Covid-19-blasted economy. That’s a bankruptcy tidal wave of a different color. Read More