bankruptcy

With high foreclosure rates, increased unemployment, and consumer debts on the rise, many people have had a very difficult time staying on top of their finances and paying all of their monthly bills and expenses. As a result, millions of people throughout San Diego and the United States are suffering from mounting debt with no end in sight.

Bankruptcy was designed to help people who have become so inundated with debt that they have fallen behind on their finances and can no longer pay their bills or other financial obligations. The goal of bankruptcy is to provide individuals and families with the financial relief they need to reclaim their finances so they can have a second chance to start fresh in life.

If you are suffering from inescapable amounts of debt and are considering filing for bankruptcy, the first step you should take is to consult an experienced bankruptcy attorney.

When you come to our office, we will review your financial situation, and help you determine whether or not bankruptcy is right for you. If it is, we will help you file all of the appropriate legal documents, and represent you at every meeting and court appearance. If not, we will outline alternative solutions that best helps you and your family. Our number one priority has always been to help our clients overcome their financial troubles, so they are free enjoy a fresh start in life without stress, worry, and anxiety weighing them down.

The San Diego bankruptcy lawyers at Avant Law advise and represent clients in all aspects of bankruptcy law under Chapter 7, Chapter 11, and Chapter 13. If you are interested in setting up a FREE consultation with a knowledgeable San Diego, CA bankruptcy lawyer, please contact Avant Law at 888-619-AVANT (888-619-2826) or info@avantlaw.com.

 

Bankruptcy refers to the federal court process of eliminating or restructuring a person’s debt. In the United States, the two most common forms of bankruptcy available to individuals and families are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 bankruptcy, also known as liquidation, is the most common and most favored form of bankruptcy as it eliminates most of a debtor’s unsecured debt. However, Chapter 7 does not discharge all of a person’s debt. Certain debts cannot be discharged under Chapter 7, such as:

• Alimony/Spousal Support
• Child Support
• Student Loans (unless extreme hardship can be proven)
• Court fines or penalties
• Personal injury damages or restitution
• Tax debt

Chapter 13 bankruptcy is slightly different from Chapter 7 bankruptcy, as it does not discharge debt completely. Rather, Chapter 13 consolidates a person’s debt and restructures it into a feasible monthly payment plan. Under Chapter 13 bankruptcy, you will have a set amount of time, usually three to five years, to pay off a portion of your debt each month. Although this type of bankruptcy does completely eliminate your debt, it does restructure it in a way that is manageable.

Chapter 11 bankruptcy is available to businesses that are experiencing financial troubles. Under Chapter 11, a business can continue to operate while it restructures or reorganizes its debts and finances. Many businesses favor this form as bankruptcy as it awards them protection from creditors during the reorganization and restructuring period. Furthermore, businesses can also repay their creditor while continuing to operate.

If you are interested in setting up a FREE consultation with a knowledgeable San Diego, CA bankruptcy lawyer, please contact Avant Law at 888-619-AVANT (888-619-2826) or info@avantlaw.com.

Should I File for Bankruptcy Protection?

Consider the questions listed below. If you answer yes to three or more of the questions, speak with a San Diego bankruptcy attorney from Avant Law right away. We can help. For a thoughtful, caring assessment of your situation, and for answers to your questions concerning bankruptcy, please contact Avant Law today.

1. Have you been served with legal papers, are you being sued, or are your wages already being garnished?
2. Are you receiving harassing calls from creditors?
3. Do you routinely spend more than you earn?
4. Is it difficult for you to see a way of getting out of debt?
5. Can you only afford the minimum payment required on your credit cards?
6. Do you panic when faced with an unexpected expense, such as a car repair?
7. Do you skip payments on some bills in order to pay other bills, transfer balances, or use cash advances on one credit card?
8. Have you experienced a change of employment such as a job change, loss of employment or loss of overtime that impacts your ability to keep the status quo?
9. Do you find yourself arguing with your spouse about money, or find that you are afraid to talk to your spouse about money at all?
10. Are you thinking about filing for bankruptcy?
11. Do you buy necessary items, such as food and clothing, on credit?
12. Do you make regular payments without your balances going down?
13. Do you pay over 20 percent interests on any of your debt?

We build relationships with our clients. Avant Law is centered on providing personalized service and representation in an atmosphere and culture of care.

When good people have serious financial problems, they owe it to themselves and their families to consider bankruptcy.

If you are interested in setting up a FREE consultation with a knowledgeable San Diego, CA bankruptcy lawyer, please contact Avant Law at 888-619-AVANT (888-619-2826) or info@avantlaw.com.

Frequently Asked Questions

1. Save My Home!

   Are you facing foreclosure? Have circumstances prohibited you from making your mortgage payments? It is happening to thousands of people every day. And while it may sound counterintuitive, filing for bankruptcy might actually allow you to save your home!

   If you are considering bankruptcy, you need to be realistic. Yes, bankruptcy can help prevent foreclosure, but will you be able to afford to keep your home after bankruptcy? You will still need to make mortgage payments, pay for insurance, pay for upkeep, and pay for property taxes.

   If you decide to file for bankruptcy, as soon as you do so, the court will grant an automatic stay, which temporarily protects your home from foreclosure. Essentially, it puts a halt on all collection activities, including repossessions and foreclosures.

   If you file a Chapter 7, you can choose to surrender (give up) your home and receive a “discharge” of your mortgage debt (meaning, you are forgiven from the loan). If you want to keep your home, you can, if you are current on your payments and you continue making payments. You also need to be able to exempt your home (assuming there is any equity). The amount of property you can keep in bankruptcy is governed by exemption laws. It is common for people to be able to exempt the equity in their homes.

   If you cannot exempt your home, and/or you have fallen behind on your mortgage payments, you might consider a Chapter 13. A Chapter 13 will stop the foreclosure and will give you up to five years to make up those missed payments. A Chapter 13 also offers you the possibility of a lien strip. If you have two mortgages on your home, and you owe more on your first mortgage than the fair market value of your home, we can “strip” the second mortgage. This means that at the conclusion of your Chapter 13, the second mortgage goes away for good.

2. Can Bankruptcy Help With Credit Card Debt?

   If you have found yourself in credit card debt, you are not alone. The average American adult is carrying a credit card balance of over $4,000. It is easy to get into credit card debt. Things happen. We have emergencies. We have bills to pay, and sometimes, we just don’t have the money to make ends meet.

   Nevertheless, if you are only making your minimum monthly payment(s) on your credit card debt, it will take you close to forever to pay it off. Let’s say you owe $20,000. If your credit cards charge an average interest rate of 30%, you are probably making a minimum payment in the vicinity of $700 each month. This is a huge monthly expense!

   If you continue to pay your debt off at this rate, and this is assuming that you make no additional purchases using these cards, you will pay off your debt in a little over 36 years. That’s right. Thirty-six years! Close your eyes and imagine where you will be in 36 years. Do you picture yourself retired? Do you picture yourself having to work full-time because you are still paying on bills you acquired when you were 20?

   There are several ways to pay off credit card debt. Maybe you need to find a better paying job. Maybe you need to go back to school and start a new career. Maybe you need to liquidate some of your assets. Or maybe you really need to tighten up on all your other spending and try to put every cent of your disposable income toward that debt.

   Or maybe you need to consider bankruptcy. Usually, all credit card debts are forgiven during bankruptcy. If you qualify for Chapter 7, all of your credit card debts will be wiped away in about 3-4 months. Contrary to popular misconception, a Chapter 13 does not require that you pay off all of your credit card debt. In most cases, our clients who file a Chapter 13 end up paying back between 5% – 30% of their credit card debt. So, if you owe $20,000, you would probably only end up paying back less than $4,000 of your debt, if you were to file a Chapter 13.

3. How Can I Stop Harassing Collection Calls?

   Are you scared to answer the telephone? Just because you have fallen behind on your bills does not mean you need to leave your phone off the hook. There are other ways to make the calls stop.

   When you retain Avant Law, we send out cease-and-desist letters on your behalf. Once these letters are mailed, creditors are prohibited by law from calling you. They can still send you letters, but you will at least be able to plug the phone back in, and your parents will no longer wonder why you are never home.

   If you do receive a collection call after these letters have gone out, simply refer the caller to us. Say, “Call my lawyer,” and give the collector our number. Do not engage in conversation with them. Be polite, but be firm. You are under no obligation to explain anything to them.

   If you decide to file for bankruptcy, you will be placed under the protection of an automatic stay. This means that your collectors will no longer be able to contact you at all- no more letters, phone calls, emails, etc. The courts place you in a protective bubble so you can go back to your life and not live in fear.

4. What happens to my car if I file for bankruptcy? Can bankruptcy help save my car?

   “Can I keep my car?” is a question that people considering bankruptcy often ask. Filing for bankruptcy does not mean you will automatically lose your car. In fact, most of our clients are able to keep their vehicles. It all depends on your unique situation.

   There are three types of situations we need to discuss when it comes to cars.

   1. You own the vehicle outright.
   2. You still owe money on your car but are current.
   3. You are behind on your car payments.

   Own My Car Outright

   The amount of property you can keep is governed by exemption laws. If the value of your car is less than the allowable amount for exemptions, then you can keep your car. Now, before you start worrying, take a deep breath because California has very generous exemptions and most of our clients keep all of their property in bankruptcy. If we can’t protect your car in a Chapter 7, Chapter 13 is also an option.

   I Still Owe Money On My Car – Chapter 7 Options

   If you still owe money on your car, you should ask yourself if you can afford to keep it after bankruptcy. You will still need to be able to make your payments and pay for the insurance, registration, and maintenance of the vehicle. If you decide you can’t afford the vehicle, bankruptcy will allow you to give up your car and walk away without owing another penny.

   In general, you’ll need to be current with your car payments, or be able to “make-up” the missed payments. Otherwise, the lender can exercise its right to repossess the vehicle despite the bankruptcy.

   Another option is redemption. If you owe more on your car than your car is worth, redemption allows you to buy the car for what it is worth, which is often far less than what you owe. However, this requires a lump sum payment.

   Keeping Cars in Chapter 13

   If you’ve missed car payments, and the repo man is out looking for your car, Chapter 13 may be a good option. This will stretch the amount owed over five years, which will lower your monthly payment. If you acquired your current car loan more than 910 days ago, you can “cram down” your loan to fair market value. In any case, we can reduce your interest rate to about 5-7% in Chapter 13.

5. Can Bankruptcy Prevent or Stop Wage Garnishment?

   Have collectors threatened you with wage garnishment? Or maybe they’ve already started taking some of your earnings? If you do not pay your bills, a creditor can take you to court (sue you). Once you’ve been sued, you must answer, and defend the lawsuit or the creditor will win by default. Once the creditor has a judgment, it can garnish your wages. This can have a devastating effect on your life, your financial situation, and your reputation. (It’s impossible to keep wage garnishment a secret from your employer.)

   Did you know that wage garnishment is immediately stopped when you file for bankruptcy? When you file a bankruptcy petition, you are immediately put under the protection of an automatic stay. This means that all collection activities must stop. Violating the automatic stay would be costly to your creditors. (A few creditors are excluded from the stay, such as those collecting child support or alimony.)

   In addition to stopping garnishment, we may be able to get the last 90 days of garnishment back if you decide to file for bankruptcy. You don’t have to live with wage garnishment or under the threat of it. Act now and consider your options. The worst thing you can do is to do nothing.

6. I’ve been sued! Now what? Dealing with collection lawsuits

   The bad news is, if you fail to pay your bills, your creditors can sue you. They can sue you for what you owe them in addition to the fees involved in your lawsuit (court costs, attorney fees, etc). That’s right – they want you to pay them for suing you. This can be absolutely devastating, and it may be tempting to just hide but that will only make things worse. Once you receive your Summons and Complaint, you have only 30 days to answer. If you try to hide from the lawsuit, i.e., pretend it’s not happening, your creditors will likely win by default, and move on to garnish your wages. They can even impound your bank account and put liens on your home. None of this is worth the brief relief you might experience by ignoring the lawsuit.

   You need to act! If you file for bankruptcy, the lawsuit is essentially rendered moot. And don’t believe the myth that once you’ve been sued, it is too late to file for bankruptcy. Many people don’t file for bankruptcy until they’ve been sued.

   Bankruptcy is not the answer for everyone in every situation. But if you are being sued for debt, you do need answers, and you do need to find them fast. Bankruptcy is one of your options.

7. Taxes and Bankruptcy

   Benjamin Franklin once wrote, “In this world nothing can be said to be certain, except death and taxes.” Taxes – if we live in the United States, we have to pay them.You need to act! If you file for bankruptcy, the lawsuit is essentially rendered moot. And don’t believe the myth that once you’ve been sued, it is too late to file for bankruptcy. Many people don’t file for bankruptcy until they’ve been sued.

   However, if you have owed income tax to the government for more than three years, bankruptcy might be able to help you get out from underneath the weight of that debt.

   If you file a Chapter 7, you can be forgiven your federal income tax debt, as long as:

   • You have owed the income tax for more than three years.
   • You filed the tax returns, for the debt you wish to discharge, more than two years ago.
   • The IRS has not assessed your tax returns in the last 240 days.
   • There is no fraud.

   You’ll still have to pay whatever taxes do not get discharged (forgiven) after Chapter 7. What if your taxes are nondischargeable because it doesn’t meet the rules? That’s where Chapter 13 can come in handy. In Chapter 13, you will pay this money back in monthly payments that will be stretched out over three or five years. A Chapter 13 can be a lifesaver because it transforms your tax debt into a manageable monthly payment.

If you are interested in setting up a FREE consultation with a knowledgeable San Diego, CA bankruptcy lawyer, please contact Avant Law at 888-619-AVANT (888-619-2826) or info@avantlaw.com.

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