Bankruptcy refiling is a common question potential clients ask. Can you refile a bankruptcy they ask. Yes, you can refile a bankruptcy. But the effect of a subsequent bankruptcy filing varies depending on how long it has been since you last filed bankruptcy. It also depends on how the prior bankruptcy concluded. Was the prior bankruptcy case conclu...
Sacramento Bankruptcy & Debt Relief Attorney
When to file bankruptcy is a common consumer question. There is no common answer to this question. But the need to file for bankruptcy is often prompted by similar debt circumstances. The biggest factor is a simple one. Can you afford your debt? If not, bankruptcy should be an option. Are you borrowing money from creditors to pay other creditors? I...
Sacramento Bankruptcy Basics
Sacramento bankruptcy basics is a primer post for those considering filing for bankruptcy. Bankruptcy can be a hard decision. A really hard one. But bankruptcy can bring relief. Lots of it. The most basic equation for those thinking of bankruptcy is debt. More debt than income. That is the common denominator for bankruptcy filers. So, if you have more debt than you can afford, bankruptcy should be considered. Not because you want to. Since you have to.
But bankruptcy is not that bad. What many fail to consider is the benefits of bankruptcy. Namely, it eliminates debt. Many in Sacramento are living with debt they cannot pay. Something needs to be done. But what? The first Sacramento bankruptcy basics evaluation should be whether your debt is growing. If it is, that's a sure sign you have more debt than you can afford. And it's also a sign your debt is likely to get even bigger. Borrowing to pay off borrowed money is a common phenomenon. It is unsustainable, though. Something will eventually have to give.
Debt consolidators are commonplace. Their pitches are good. But their impact is bad. Consolidating your debt is a ding worse on your credit then bankruptcy. Plus it doesn't eliminate your debt. Here is a news story revealing the problems. Sacramento bankruptcy basics should always include avoiding these companies. This is not a scare tactic. It is a fact. Having third parties pay your debt, if that even happens, is worse than bankruptcy on your credit. And if some of you debt is eliminated, it is taxed. Debt discharged, or eliminated, in bankruptcy is not taxed.
As a final Sacramento bankruptcy basics point, I invite you to evaluate your bankruptcy options. You can go to the Sacramento Bankruptcy Court to gather information. Or you can contact my office for a free evaluation. All you have to lose is your debt!
Bankruptcy plan. What is it? Bankruptcy is a legal tool that allows you to eliminate your debt. Sometimes all your debt. Sometimes some of your debt. Each bankruptcy filing is different. But the basics for all bankruptcies remain the same. When you can’t repay the debt you owe, what do you do? That’s the premise of bankruptcy.
If you cannot afford to pay any of your debt, bankruptcy may allow you to eliminate it. Eliminating debt through bankruptcy is known as a discharge. A discharge is a legal order issued by the bankruptcy court relieving the debtor of his or her financial obligations. It eliminates the debts. If, though, you can afford to pay your debt, bankruptcy laws require you do so. Even if it is only a small percentage of your debt you can afford to pay back. Repaying your debts through bankruptcy is done through a bankruptcy plan.
Normally a bankruptcy plan is initiated with the filing of a Chapter 13 bankruptcy. The Chapter 13 plan will provide the terms of your debt repayment. Both businesses and individuals can file. It will list how much you will pay back. For how long you will repay your creditors. And it will include who you will repay. News of the bankruptcy of ‘American Idol’ producers’ debts were disclosed in a bankruptcy repayment plan.
If you cannot afford to repay your creditors in a Chapter 13 bankruptcy, a Chapter 7 may be an option. A Chapter 7 bankruptcy normally does not require you repay your debts. There is normally no type of bankruptcy plan with a Chapter 7 bankruptcy.
Providing for a bankruptcy plan where you repay your debts, or at least some of them, can be of benefit to a debtor. Sometimes a debtor who files for bankruptcy wants to repay some debts. Repaying mortgages are a common example, particularly when a debtor is in default on their mortgage. If a debtor is in foreclosure on their home, the mortgage arrearages (delinquent mortgage payments) can be made up through a Chapter 13 bankruptcy plan.
Bankruptcy Basic: Don’t Lie
One of the most basic tenets of bankruptcy: don’t lie! It’s not a complicated concept but it is is not always followed. Bankruptcy affords filers a broad range of benefits. Chief among them is the ability to eliminate your debt. Since this is debt that cannot be afforded, bankruptcy can be a big help.
But to reap the bankruptcy benefits, there are obligations. Telling the truth is one of those requirements. When you file bankruptcy you must be truthful in disclosing all your personal and financial information. Your income, expenses and assets are all required in preparing your bankruptcy petition and paperwork.
Your income, including your income history, is required as part of the bankruptcy process. Eligibility for certain bankruptcy filings, including both Chapter 7 & 13 filings, depend on the amount of income you earn. To file for Chapter 7 bankruptcy, your income must be lower than your expenses. For a Chapter 13 bankruptcy your must earn more than you spend. Whatever bankruptcy option you need, you must disclose accurate financial facts.
Same bankruptcy basic goes for disclosing your personal assets. When you file bankruptcy you can protect, or exempt, your property. In most consumer cases all property is protected. But you can’t lie. You must reveal all your property in your bankruptcy paperwork. Leaving out a home or car is a bad idea!
In addition to your personal information, another bankruptcy basic is to not lie about your debt. You must list it all in your bankruptcy petition and paperwork. You cannot pick and choose what debts to include in your bankruptcy. You must disclose all debts when you file bankruptcy. Eligibility and affordability of your bankruptcy is dependent on your accurate disclosure of your debts.
Bankruptcy Bang for the Buck
Bankruptcy bang for the buck is another way of saying whether filing bankruptcy will benefit you financially. In other words, will the savings of a bankruptcy outweigh the cost of filing for bankruptcy?
With the average consumer bankruptcy, credit card debt alone exceeds $23,000. This amount does not include other forms of debt. Medical bills, car repossessions, payday loans and other unsecured debts often accompany the credit card debt figure. For the average bankruptcy filer, then, there is a good bankruptcy bang for the buck.
If, just considering the average credit card debt, the amount spent on interest in a few months is more than the cost of filing a bankruptcy, there is bankruptcy bang for the buck. It is easy to see why. Spending $1,500 filing for bankruptcy is less than the interest you pay on your credit cards over a few months. Spending money on your credit card interest gets you nowhere. Filing bankruptcy gets you a discharge and your debt is done.
The traditional mindset with bankruptcy is file only as a last resort. But given the bankruptcy bang for the buck, maybe that logic is flawed. An article in the Huffington Post suggests filing right away if it is cheaper to file bankruptcy than to manage your debt for a few months. The logic makes sense.
The past mindset of bankruptcy has often been tied to reluctance. People have hesitated from filing. Perhaps fear or some supposed stigma prevents them. But no more. It is a results-oreiented society we now live in. If there is a bankruptcy bang for the buck, people will file. Filing bankruptcy is a legal right. If your finances are such that is is worthwhile, filing bankruptcy makes sense.
Bankruptcy Bad Idea
Bankruptcy affords you protection from your creditors and the elimination (or reduction) of your debt. But along with the benefits, bankruptcy comes with restrictions and responsibilities. One limitation is the amount of property you can protect in a bankruptcy. As discussed throughout this website, you can exempt your property when you file bankruptcy. Though there are limitations on the amount and type of property you can protect. Bankruptcy law mandates you disclose all your assets in your bankruptcy filing. Applying exemption laws you can then protect your property. Many, if not most, consumers can protect all they own. Not disclosing all the property you have, though, is a bankruptcy bad idea.
Posting pictures of property you did not disclose in a bankruptcy filing on social media is a really bad bankruptcy bad idea. Rapper 50 Cent may have put himself in this spot. Recently he posted on social media pictures of him surrounded by piles of cash. 50 Cent is in an active bankruptcy case now. If he did not disclose this money in his filing, he may be in big trouble. This news story explains his potential legal predicament.
If 50 Cent had this money when he filed for bankruptcy and disclosed it, no problem. If he didn’t, problem.
If this potential bankruptcy bad idea befalls rapper 50 Cent, he wouldn’t be the first to so fall. Nor would he be the first celebrity to run afoul of the bankruptcy law. Former major league player Lenny Dykstra served time in prison for failing to disclose all his property in his bankruptcy filing. Here is the CNN story portraying his plight.
The message for all is to disclose in your bankruptcy all the property you have. You likely can protect what you have. But no matter, you must list it all. When you sign your bankruptcy paperwork, you do so under penalty of perjury. Lying about what you have–or don’t have–is a bankruptcy bad idea!
Sacramento Bankruptcy: What is a Bankruptcy Conversion?
Bankruptcy conversion is changing the chapter of your bankruptcy filing after you have already filed. Types of bankruptcy are organized by chapters of the federal law that created them. Though there are many types of bankruptcy chapters, the most common for consumers are Chapter 7 and 13. Other areas of this website address all of the differences between Chapter 13 and 7 bankruptcies. But for this issue, suffice it to say that you repay at least some of your debts in a Chapter 13 (bankruptcy reorganization), but none in a Chapter 7 (bankruptcy liquidation).
If you file for one type (or chapter) of bankruptcy and, later, decide to do another before your case is complete, you can convert your bankruptcy. This means that you change your case from one form of bankruptcy filing to another without having to refile your case. Much of the information in your new bankruptcy chapter will have to be provided after you convert. But you won’t have to refile another case to do it.
Refiling a bankruptcy often comes with a penalty. To prevent people from filing too many bankruptcies, particularly in quick succession, Congress imposed restrictions on later filings to inhibit them. If, for whatever reason (and there can be many), you do need to refile a bankruptcy, it can be done. Usually, too, there is no penalty for doing so, especially if the cases are spread broadly over time. But if someone files bankruptcy 3 times in year, there likely would be problems. By being able to convert your case, you eliminate possible problems with future bankruptcy needs.
Converting your bankruptcy can also save you money. Instead of having to refile a brand new case with a brand new filing fee, you only have to pay a conversion fee, which saves you hundreds of dollars.
Most importantly for a conversion, it gets you where you want–or need–to be. For example, if you are in the midst of a Chapter 13 bankruptcy reorganization and can no longer afford your plan payments, you may need to convert to a Chapter 7 liquidation. Bankruptcy conversion laws allow you to do this. Loss of a job or other financial obstacles that can prompt a bankruptcy filing can also prompt a bankruptcy conversion.
Bankruptcy and the Bankruptcy Means Test
The bankruptcy Means Test was a qualification standard adopted by Congress in 2005 for bankruptcy filers. It essentially determines whether you qualify for a bankruptcy liquidation, better known as a Chapter 7 bankruptcy. If you do not qualify for a Chapter 7 bankruptcy, the Means Test establishes the amount of your debt you must repay though a debt reorganization, most commonly a Chapter 13 bankruptcy.
The Means Test was established by the Department of Justice. Here is a link to their site. The Means Test is not difficult to apply, though it can be complex if you have higher income or your personal finances themselves are complex.
Even if your income is above the Means Test limit, you may still qualify for a Chapter 7 bankruptcy liquidation. Expenses are taken into consideration and, if higher than the norm, they may offset your income allowing you to qualify. There are other factors, too, that impact the figures for the Means Test. Suffice it to say, there is a lot that goes into the Means Test.
And even if you do not qualify for a Chapter 7 bankruptcy under the Means Test, you can still qualify for filing bankruptcy under a Chapter 13 bankruptcy reorganization. This means you have to pay back a portion of your debts; but it also means that whatever portion of debt you don’t repay is discharged.
Sometimes, too, there are benefits to filing a Chapter 13 bankruptcy to reorganize your debt. Since you repaying a portion of your debt in a Chapter 13 bankruptcy, the government provides incentives to guide you in this direction. Many of the benefits of filing for Chapter 13 are found throughout this website.
Sacramento Bankruptcy: Foreclosure Basics
If you are facing foreclosure of your home, there are some basics you need to know.
A foreclosure does not mean your home is sold. Your house is still yours. A foreclosure is notice warning you of a mortgage delinquency. If you do not come current with your mortgage arrears (amount you are behind on your mortgage payments), the lender can sell your home to collect what they are owed. But before they can sell your home, they must give you 90 days to catch up on your mortgage.
If you cannot catch up on your payments within the 90 days, you can stop the lender from selling your home by filing bankruptcy. That does not mean, though, you don’t have to pay the delinquent portion of your mortgage if you want to stay in your home. But a bankruptcy can buy you time–up to 5 years–to catch up on your payments and, in so doing, continue to keep your home.
Modifying your mortgage may be an alternative if bankruptcy won’t work. There are a number of government agencies out there to help. KeepYourHomeCalifornia.org is a good one. Just know that if you can’t bargain your way out of a foreclosure with your lender, bankruptcy is a great option.
Sacramento Bankruptcy: how to start the bankruptcy process
Filing bankruptcy in Sacramento, or anywhere, is a process. Preparation, strategy and timing are often key elements in processing a bankruptcy filing. How, then, to begin?
For starters, find whether bankruptcy is your best option. Often when you owe more in debt than income you earn (for math lovers: debt>income), bankruptcy is a good bet. Evaluating your debt relief options is best initiated by consulting with a professional who can advise you.
If bankruptcy is a good fit, deciding on what type of bankruptcy to file is next. Typically individual consumers and couples file either a Chapter 7 bankruptcy or Chapter 13 bankruptcy. In a Chapter 7 bankruptcy you usually do not pay anything back to your creditors; in a Chapter 13 bankruptcy you do.
Once you decide your bankruptcy direction, plotting though the paperwork to process your bankruptcy is normally next. Your income, debt, types of debt, expenses and bankruptcy goals are all thrown into the mix in preparation of your case.
Signing your petition and accompanying paperwork is the last step before your bankruptcy case can be filed. This, understandably, is an overview of the overall process of beginning a bankruptcy filing. But it is a guide of the basic steps involved in filing for bankruptcy.
Retirement Accounts & Pensions Protected?
Almost always are retirement accounts and pensions protected in a bankruptcy filing. This means that retirement accounts and pensions can be kept even though the debt can be eliminated through the bankruptcy.
Can I Refile a Bankruptcy If My Case Is Dismissed?
Yes. But be careful. Refiling a bankruptcy case is tricky whether a prior case was dismissed or completed successfully. The number of prior filed case, when they were filed and what type of bankruptcy is being filed are all factors affecting your bankruptcy options.
Consultation with a bankruptcy professional is a must in this situation. Get it wrong and your bankruptcy case could be dismissed or denied bankruptcy protection!
Do you have to go to court if you file for bankruptcy?
Yes. But the vast majority of cases you should only have to appear at an informal hearing in front of a bankruptcy trustee–and I’ll be there with you. Though the hearing is located at the courthouse, you likely won’t have to appear before a judge in a court.
Before filing bankruptcy, it is best to plan for your filing. Ensuring your eligibility, protecting your property and making sure your debts will be discharged are all considerations in evaluating the type and timing of your bankruptcy.
For best results: consult a bankruptcy professional! Measure twice, cut once as the saying goes. Same situation in bankruptcy. Consulting with someone who knows bankruptcy will allow you to measure what you have and, more importantly, let you know what needs measuring!
Can I file bankruptcy without my spouse?
Yes, you can file bankruptcy without your spouse if married. Often one spouse does not want to file for a variety of potential reasons. Though most married couples file bankruptcy here in Sacramento together, they don’t have to.
If one spouse doesn’t file bankruptcy with the other, it is often necessary that the souse who doesn’t file waives their right to file bankruptcy. No matter this is a temporary waiver, it is frequently needed to protect the couple’s property.
As with everything, best to contact me or any other bankruptcy professional to evaluate the pros and cons of filing bankruptcy without your husband or wife.
Credit report necessary to file bankruptcy?
No, you don’t have to pull a credit report before filing bankruptcy. You are required to disclose all your debts, but a credit report is not required to do that. Typically debtors know who they owe and don’t need a credit report to remind them.
Often times, though, people aren’t certain who their creditors are, in which case a credit report is a helpful tool in preparing a bankruptcy petition (paperwork filed with bankruptcy court). Still, credit reports are not always accurate and shouldn’t be considered the definitive document defining your debt.
If your debt is old, mixed in with a spouse (or ex-spouse) or otherwise not certain, a credit report is a good source to help disclose your debt. If you miss or fail to disclose a creditor because of a bad memory or credit report, you are still protected through your bankruptcy filing. All debts before your bankruptcy are automatically part of your bankruptcy whether they are included in your bankruptcy petition or not. A creditor, then, cannot claim you still owe a debt because it wasn’t properly listed in your bankruptcy paperwork. This is particularly true in collection company cases where debts are parceled out amongst numerous collectors, many of whom you may never even be aware of.
Is there a minimum amount of debt to file bankruptcy?
No. Bankruptcy can eliminate any amount of debt. Whether it is worthwhile to file bankruptcy with the amount of debt you owe is the question. The analysis to determine wether to file bankruptcy should be which of the following options will better you:
1. To have a bankruptcy and no debt; or
2. To have debt and no bankruptcy.
The answer sometimes is not simple. Typically when people lose the ability to afford their debt, bankruptcy and the discharge of their debt is the best bet. Though bankruptcy is a negative on your credit, it is almost always a better option then carrying debt that cannot be paid. By eliminating your debt, your debt-to-income ratio is instantly improved which, understandably, instantly improves your credit.
Part of the equation, too, must be the mental aspect of debt. clearing your debt can offer peace of mind and the prospect of not living under debt. Never underestimate what debt–or its absence–can do to your well-being!
Declaring bankruptcy is not always complex or confusing, especially with the aid of an attorney. But the process is a bit more in depth than this "The Office" video makes out!
Sacramento bankruptcy: Chapter 13 filing facts
Chapter 13 bankruptcy,in Sacramento and elsewhere, is a form of filing where you propose to repay at least a portion of your debt. All of your debt, though, need not be repaid. Often only a small percentage of your debt is repaid through a Chapter 13 bankruptcy. The rest is discharged, or eliminated. What you pay and what you don’t are fundamental facts in formulating your Chapter 13 repayment plan. Just understand that even if you file for Chapter 13 bankruptcy, you don’t necessarily have to pay all your debt back. See for yourself.