Sacramento Bankruptcy & Debt Relief Attorney

Sacramento Bankruptcy: Coping with Debt

Debt can be dealt with in many ways. Bankruptcy is an option, but is likely not a first alternative. Read the Federal Trade Commissions thoughts on coping with debt. Though initial options to resolve your debt, such as consolidation and refinancing, may eliminate your debt problem, creating more debt to solve a debt dilemma can be a risky proposition. Borrowing more may only make the problem worse.

Bankruptcy is about what to do when what you have done before doesn’t work. Even if a last option, bankruptcy offers a safety net of last resort to resolve your debt crisis.

Rarely do you have to surrender your property when you file for bankruptcy. Exemption laws allow you to protect a certain amount of property you have. The vast majority of time this means all the property you have. Bankruptcy is an option available to you.

Sacramento Bankruptcy: Being sued? Bankruptcy will stop that lawsuit

Bankruptcy prevents creditors from coming after you. That includes stopping lawsuits, letters, levies, liens, garnishments, phone calls, or anything creditors attempt to pursue a debt owed. As soon as a bankruptcy is filed, bankruptcy protection (also known as an automatic stay in legalese) applies. Often people file bankruptcy because a creditor has sued them which, then, can result in a lien, levy, garnishment or other collection option. Even the rapper 50 Cent filed for bankruptcy to stop his creditors in their tracks. Bankruptcy is a powerful tool and may assist you if you have debt and are facing collection force.

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.

Sacramento Bankruptcy: The Benefits of Bankruptcy

Filing bankruptcy can be a daunting decision. But often times it is worth it. Assessing whether a bankruptcy is worthwhile is essentially a cost-benefit evaluation. Is the cost of filing bankruptcy worth the benefit of eliminating your debt? Most consultations I do with potential clients confirms that bankruptcy is a better option than dealing with unaffordable debt. It is understandable that most bankruptcy clients who contact me benefit from bankruptcy since, after all, by the time I am called, their debt is beyond them in some way, shape or fashion.

Though bankruptcy is a negative on your credit, it is better than owing more debt than you can repay. If you are in this situation, bankruptcy can help. Don’t let the supposed stigma of bankruptcy which, often times, is perpetuated by the credit industry, deter you from benefitting from bankruptcy.

Credit is typically improved quickly after a bankruptcy. Although it remains on your credit report for years, eliminating your debt through a bankruptcy discharge immediately improves your credit position. Your debt-to-income ratio is restored, credit can easily be reestablished and your finances fixed with a bankruptcy. Countless clients have commented to me how well a bankruptcy works and that it was the smartest financial move they have made.

Restoring your financial balance is the point of a bankruptcy. It allows you to live your life free of the financial constraints of debt. Whether you are in need of restructuring your debt or eliminating it entirely, bankruptcy is a tool that can provide you a fresh financial start. Frequently, too, eliminating your debt can eliminate your angst, which often times can be as daunting–if not more–than the decision whether to file bankruptcy.

As detailed in an NPR story (podcast), bankruptcy can be a big benefit.

Medical Bills?

Medical bills are some of the some of the most common debts prompting consumer bankruptcies. Though the amount of such debts are often overwhelming, they are dischargeable through bankruptcy proceedings!

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.

How Will Bankruptcy Affect Your Credit?

Every case is different. But by the time potential clients consider filing bankruptcy, their credit is already shot. By eliminating your debt through a bankruptcy, your debt-to-income ratio improves dramatically and instantly and, thus, improving your credit.

Consultations to consider your credit impact are always free.

Payment Plans Welcome

No matter the cost of a client’s bankruptcy, payment plans are welcome. There is no interest, late fees or minimum amounts due. Pay what you can, when you can, no matter the time it takes. Bankruptcy attorneys cannot be owed money by clients when filing their cases so, whatever fees are owing, must be paid before a bankruptcy is filed.

Title (Pink Slip) Loans and Bankruptcy

A title, or pink slip, loan is a loan taken on your vehicle after it is already paid for (or close to it). Typically these loans are secured, meaning they have to be repaid even if you file for bankruptcy. But since such loans are taken out after you bought your car, the loan amount may be reduced through some forms of bankruptcy filings. Whether you want to keep your car is another question that might influence your bankruptcy options.

Experience Matters

10 years ago the bankruptcy laws changed and, when they did, they imposed limits–and penalties–on refiling bankruptcy cases. It is vital your bankruptcy filing is prepared, filed and prosecuted properly. Make a mistake and you may not be able to file again with full bankruptcy protection.

Whether you hire my office or not, hire an attorney with experience who knows bankruptcy!

Can I File Bankruptcy Again?

This is a common question clients ask. The answer is yes. Though you can file another bankruptcy any time after your prior bankruptcy case is closed, your bankruptcy protection ability to eliminate your debt may be limited. An 8 year span between filings offers the most options to refile. But you can still eliminate your debt–or most of it–filing another case less than 8 years since filing your last case.

Every case is different. And this is an area that professional legal advice is a must. If redone wrong, you may not be able to discharge your debt, get bankruptcy protection or worse. If you have filed bankruptcy before and need to file again, contact me for a free consultation.

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!

Sacramento Bankruptcy Statistics

In 2014 there were more than 20,000 bankruptcy filings in Sacramento. You’re not alone!

Bankruptcy Effect on Foreclosure or Trustee Sale

Bankruptcy stops all creditors in their tracks immediately upon the filing of a bankruptcy. This includes mortgage and trustee sale companies. If your home, or any property you own, is in foreclosure, bankruptcy can stop the sale!

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.

Will bankruptcy stop or prevent a lawsuit?

Yes. Filing bankruptcy prevents creditors from suing you and, if you have already been sued, causes any cases against you to be dismissed.

Line of credit: can bankruptcy eliminate (discharge) this type of debt?

Lines of credit can be eliminated, or discharged, through a bankruptcy filing. Lines of credit are often unsecured and can be eliminated entirely through a bankruptcy. Unsecured lines of credit are like credit card debt–minus the plastic. Like credit card debt, unsecured lines of credit are common culprits causing consumer bankruptcy filings.

If a line of credit is secured, that debt may need to be repaid even if you file for bankruptcy. May is the operative word here, though. If a line of credit is secured, most commonly against a home (home equity line of credit/HELOC), that debt can still be eliminated through a bankruptcy. It depends on the value of your home, how much you owe on other mortgages and the type of bankruptcy filed.

With the explosion of home equity lines of credits (HELOC/second mortgages) in recent years past, this is a potentially vital factor in a bankruptcy evaluation, as well as a common cause of bankruptcy filings here in Sacramento.

Bankruptcy planning

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.