How a Bankruptcy Lawyer Can Help You and Your Family

Although, technically, any lawyer can handle bankruptcy proceedings, a bankruptcy lawyer is an attorney with proven expertise in bankruptcy law.  As such, if you are overwhelmed by debt, we recommend calling an expert.



Reasons to file for bankruptcy...

There are a number of reasons any honest, hard working person can find themselves in the nightmarish situation of not being able to pay their debts. In a none too bright economy, you could lose your job, or have a small business fail. Serious health issues, or a death, can cripple a family's finances. Regardless of the reason, if you find yourself in the nightmarish situation in which creditors continuously call you at work demanding that you pay them - you should speak with an attorney.  Simultaneously if you are behind on the mortgage or the power bill and are constantly robbing Peter to pay Paul in order to put food on the table, you need a bankruptcy lawyer.



Being constantly worried about how you are going to pay the bills is an extremely stressful situation and, if you simply cannot discharge the debts you owe and see no way out,  the law not only provides relief, but gives you the opportunity to make a fresh start. Bankruptcy is a legal proceeding that allows a person or other entity to be declared bankrupt i.e.. they cannot repay the debt that they owe to creditors.  Declaring bankruptcy is not a bad thing. In fact, it may be a very good option because it enables you to continue living your life, free of the crushing burden of debts you cannot repay. You retirement plans can stay intact and, gradually, over the space of a few years, you can rebuild your credit.



Why you need a bankruptcy lawyer...

New bankruptcy laws were approved by the Senate, Congress and the President in 2005, and were passed in order to protect families from often desperate situations.  At the same time, they protect the interests of your creditors, making it important to have an attorney help you to navigate through the process.  Since the bankruptcy proceedings and laws are very likely to overwhelm a lay person, you should work with a lawyer.  Typically, we will first go into details of your particular situation to see if you qualify, then make recommendations for what steps you should take.  After which, the decision has to be made as to what type of bankruptcy filing you want to proceed with.



Types of Bankruptcy Filings

Chapter 7 Bankruptcy

There are essentially two types of bankruptcy cases filed in the US, Chapter 7 being the most common. With few exceptions, this type of bankruptcy wipes out most debts. However, you have to be prepared to give up any assets that are not exempt in your particular state. The usual protected assets include Social Security payments, unemployment compensation and, the limited value of equity in your home, vehicle, household appliances and furniture, tools of your trade, etc.



Chapter 13 Bankruptcy

If you do not qualify for a Chapter 7 bankruptcy, a Chapter 13 filing allows you pay off your debts in monthly payments over a court-approved period of time. This type of bankruptcy reduces the payments you make on unsecured debt, thus providing substantial relief.



We Can Help

As a bankruptcy lawyer, we fully understand how traumatic and distressing financial hardship can be. Not only will we treat you with dignity and respect, but let us use our knowledge of, and experience with, bankruptcy law to help you get back on track.

A Bankruptcy Lawyer Can Help With Your Reaffirmation Agreements

As a bankruptcy lawyer, I help clients to file a Chapter 7 bankruptcy on a regular basis.  This type of bankruptcy allows people to have the majority of their debts wiped out entirely.  Not everyone qualifies as you need to pass a means test, but those that do can get a fresh start on life.  

When considering whether or not you want to file a Chapter 7 it is important to think about what you want to keep and what you want to let go of.  Your home, for example, can typically be kept if you are willing to continue making the mortgage payment.  Likewise, your other secured debts can either be wiped out (this will require you to give back the item), you can buy it out (pay what you owe and keep the item) or you can reaffirm the loan agreement. This gives you a lot of flexibility in deciding what debts you want to keep based on which items you want to retain.  For example, if you own two cars that each have loans on them you can decide to keep one and reaffirm the loan while giving the other car back to the bank so that the debt can be eliminated in the bankruptcy. The only exception to this is if you have a lot of equity in an asset, the court may require it to be sold so that the cash can be distributed amongst your debtors.

If you decide to reaffirm any of your debts, you should work with a bankruptcy lawyer to ensure that it is done correctly.  Reaffirming basically means that you have decided to keep the asset, a car for example, and continue to make the loan payments.  Since you have the option of giving it back and declaring the debt as part of your bankruptcy, you have room to negotiate with the lender.  You continuing to make payments is in their best interest because they will recover the most amount of money.  As such, some banks will negotiate with you.  Typically smaller banks can be easier to work with, but we can help to negotiate on your behalf.  Some lenders will agree to reduce the amount that you owe them while others may lower your interest rate and the amount of your monthly payment.  This can be extremely helpful when you are trying to wipe out debts because you can’t financially afford the payments.  For example, a car payment at $500 a month may be unreasonable while a payment of $300 may be affordable.  

The creditor is under no obligation to renegotiate and offer you a better deal, but they often will as part of your reaffirmation agreement.  Working with a professional bankruptcy lawyer can help to increase your chances of success.  We find that as these negotiations take place, it is much easier to decide which assets to keep because a realistic picture of your total budget emerges.  Once you know how much money you can afford to spend servicing debt, we can negotiate so that the assets you do keep, fit within that budget range.

If You Have a Good Salary You Can Still Get Help From a Bankruptcy Lawyer

Many of our clients ask if they can work with a bankruptcy lawyer if they earn a lot of money.  The answer is yes.  We have helped many high-income earning clients to file for bankruptcy in order to resolve their debt situation. The type of bankruptcy that you can file is dependent upon several factors including how much money you make.  If you think that you earn too much, it is that much more important to work with an attorney.

While you may earn a good living, you may not be considered a “high-income debtor” in the eyes of the court.  Whether or not you are is dependent on several factors.  The court will first look at where you live.  This is important so that families living in D.C. are not compared with those living in Ohio, as the cost of living and how much people make are different throughout the country.  Next, they will consider your family size.  As your family grows it becomes more expensive to feed, clothe and care for them.  This is understood within the bankruptcy court and it helps a lot of people to qualify for a Chapter 7 that otherwise wouldn’t.

In order to be a “high-income debtor” you must earn above the median income for your family size in your state.  In California, if you make $77,896 and have a family of four you are at the median income level.  For every member of your family, the amount that you can earn is increased.  This changes every year so speak with a bankruptcy lawyer to get the updated figures.  As long as you are at the median income level or below it, you can qualify for a Chapter 7 where all or most of your debts are eliminated.  If you are above it, the next step is to take a means test. 

A means test gives you the opportunity to provide more information about your income and your debts in an attempt to show why you should be allowed to file a Chapter 7.  As a bankruptcy lawyer, we can also make the case for why you should be allowed to do so.  If you are active duty military or National Guard, you are generally exempt from taking the test so let us know during your consultation if you are a service member.  It may help you to file a Chapter 7.

If you do make too much money, you can still file bankruptcy but you have to file a Chapter 13 instead.  A Chapter 13 can still eliminate some of your debts, but it does so by creating a settlement and payment plan.  This way your creditors still get some money back, but the amount is reduced enough to be affordable.  In this situation we can help you to create a proposed repayment plan that demonstrates what your true disposable income is after all of your expenses (including groceries and gas) in order to determine what you can apply monthly towards debts.  

As a bankruptcy lawyer, we can help you to navigate through the process so call today for your consultation. 

A Bankruptcy Lawyer Can Help to Protect Your 401k

If you need to eliminate debt, a bankruptcy lawyer can help you to do so while preserving some of your assets.  There are various assets that are protected under bankruptcy laws, as long as a judge approves your filing.  For example, your primary residence can be protected so long as your equity doesn’t exceed the threshold.  You may also be entitled to keep your vehicle.  In both scenarios, you would be responsible for making the monthly payments if you are allowed to keep the property.  In other words you can’t keep an asset and eliminate the debt on it at the same time.

Simultaneously, your 401k and other retirement funds are typically protected assets.  Even if your 401k has enough money in it to pay off your credit card debt, you may be able to wipe away the debt while keeping your retirement account intact.  This is a huge benefit for people that don’t want filing for bankruptcy to negatively impact their financial future as they age. 

In order to make sure that your 401k is protected, you should get legal advice from a bankruptcy lawyer.  While in general your retirement funds are safe, every case is different so you will need specific legal advice.  One important thing to keep in mind is that the funds need to stay within your account in order to be protected.  If you transfer money out of your 401k into your checking account, those funds become fair game because they could be used for daily expenses.  It is extremely important to keep this in mind and leave the funds alone before, during, and after your bankruptcy filing.

The same holds true for any property that you purchased using your retirement funds.  If, for example, you withdrew retirement funds to purchase a second home, it would be up for grabs as the funds used to purchase it would not be protected.  If you are even considering filing for bankruptcy, do not touch your retirement funds.

If you have a different type of retirement account, it may be protected as well as long as it qualifies under the Employee Retirement Income Security Act (ERISA) since the Supreme Court has ruled that funds can't be transferred to pay creditors. IRAs that are non-ERISA accounts are protected under federal law up to $1,245,475.  This is a considerable amount of money and makes it easier for people to file bankruptcy that have a significant amount of funds in their retirement accounts. 

As a bankruptcy lawyer, we understand how the laws can be complicated and it is our job to help you navigate through them successfully.  By understanding the laws and working within them, you can keep many of your assets while eliminating your debt.  This can put you on the path for a successful financial future and we will help you to make this happen by providing excellent legal representation.  To learn more and to find out if you would qualify for bankruptcy, give us a call.

Bankruptcy Lawyer Explains Exemptions in California

When filing for bankruptcy you need to work with a bankruptcy lawyer that is an expert at understanding the laws, exemptions, and nuances associated with these types of proceedings. Bankruptcy can be the solution you are looking for in order to get out from under a mountain of debt and to live your life freely once again.  Getting constant debt collection calls is no fun and can even be extremely stressful.  For many people, this is a reason enough to declare bankruptcy and a skilled attorney can help.

It is important to understand that although bankruptcy sounds simple, there are many laws that come into play when going this route.  For example, just because you are allowed to declare bankruptcy doesn’t mean that a judge has to approve it or that they have to approve your specific plan.  There is no guarantee that they will, making it important to work with an expert. 

Once you have filed for bankruptcy, there are certain exemptions that you should be aware of.  An exemption is something that can be excluded from your assets while filing.  A California bankruptcy lawyer can provide you with more specifics but in the meantime here is what you need to know. 

• Your Home.  Your primary residence can include a physical stick built house, mobile home, RV, boat or wherever you happen to live.  According to the law you can have $75,000 in equity in your home and that equity can be exempt from liquidation in the bankruptcy.  If you are married, both spouses can claim the full exemption for a total exemption of $150,000.  The rules can change based on certain groups of people for example retirees or the disabled.  If you claim an exemption and the total equity in your home is at that amount or less, the trustee will not sell your home, and you can keep it while continuing to make the payments on it.  If your equity exceeds the exemption amount, they may force you to sell your home. 
• Personal Property.  Generally speaking, your furniture, appliances, clothing, food, and things necessary for living are exempted from the bankruptcy. Jewelry is only exempt up to $5,000 which cannot be doubled by the spouse like the home equity can. 
• Bank Deposits.  If you receive social security payments, $2,000 of your bank account balance can be exempt.
• Cars.   You can have up to $1,900 in equity in your car.  If it is over that amount, the vehicle may be liquidated by the trustee. Your bankruptcy lawyer can also argue the merits as to why you need to keep it.  This may include an argument for your need to get to work or pick up kids from school.  At times, you may be allowed to keep it but have to pay the amount over the allotted equity exemption. 

There are also rules for how much of your wages you are entitled to keep along with pension funds and retirement. Hiring a bankruptcy lawyer is important for ensuring that you can keep the maximum amount of your income, assets, and retirement funds.  To learn more call The Travis Law Firm today.

Speak with a Bankruptcy Lawyer Before Filing for Bankruptcy

It is important to consult with a bankruptcy lawyer before you file.  This will help you understand your options fully and how they will impact you and your family both now and in the future.  Selecting the right type of filing is the first step to achieving your financial goals and getting out from under your debts.

One of the first things we will ask during your consultation is what your goals are.  Consider the financial goals you have for your family. This should include what you want your monthly budget to look like and what assets you want to keep or get rid of.  We also need to know how much money you are making on a monthly basis and what your current expenses are aside from your debts.  This will help us make an educated recommendation on how you should proceed.

As a bankruptcy lawyer, we can help with a Chapter 7 and Chapter 13 bankruptcy. There are major differences between the two and it is important to select the right one.

Chapter 13

A Chapter 13 filing is a good idea for people who want to keep the majority of their assets and pay back creditors over time.  Many people don’t like the idea of liquidating everything so they would rather continue to pay off their debt in a way that is manageable on a monthly basis.  We work with clients to create a monthly budget that is reasonable and affordable.  This budget needs to take into consideration how much money you make after paying taxes, child support, rent or a mortgage, utilities, groceries, gas and incidentals.  The remaining amount should be what you have available for making debt payments.  Every monthly expense has to be calculated otherwise you will not be able to keep up with the arranged payment plans.  If the trustee feels that your monthly budget is accurate they will look at your proposed settlement plan.  In this scenario, your creditors will take a reduced amount overall while still getting something in return.

Chapter 7

This is a liquidation bankruptcy where your assets are sold to pay off your debts. This may include all of your assets including your home.  However, as a bankruptcy lawyer we will request that certain assets like your home and car are exempt from liquidation.  The trustee is likely to approve this as long as there is not a lot of equity in the property.  If the equity in the property is enough to pay off a lot of your debts, it may need to be sold.  This is an ideal situation for people that cannot possibly make debt payments and want to be free from the stress quickly.  Once the bankruptcy is approved your creditors cannot come after you for additional payments.

To learn more about the various types of filings and what they can mean for your financial future, call the Travis Law Firm at (951) 274-9501.

A Bankruptcy Lawyer Can Help You File a Chapter 13

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A Chapter 13 can provide debt relief, and a bankruptcy lawyer can help you through the process.  This is an excellent option for families seeking debt relief that also want to stay in their home.  With a Chapter 13 filing, people can stop foreclosure and make their delinquent payments over time. This allows families to stay in their home and start making mortgage payments on time again instead of being forced to make up the delinquency in one lump sum payment. 

In Chapter 13, a payment plan can be reached where, apart from your mortgage, one monthly payment is paid then distributed to your creditors according to the plan.  This lasts for a period of years, based on what you propose and what the judge approves.  Your creditors typically get paid a reduced amount than if you had the money to simply pay them off.  This makes it possible to get out of debt while still paying your creditors something.  Once the plan is approved, you are obligated to stick with it by making monthly payments on time.  Otherwise, your creditors can take you back to court. 

There are several rule and procedural issues that you need to know in order to get your Chapter 13 approved.  Hiring a skilled bankruptcy lawyer will help you through this process. For example, you must complete credit counseling within 180 days prior to obtaining your bankruptcy.  A copy of your course completion must be included with your initial filing in order for it to be processed. You must also file recent pay stubs or income documentation, a statement of your monthly net income and whether that is expected to go up or down, along with copies of tax returns.  At the time of the filing, a fee must also be paid to the court, typically $235 and $75 for processing. 

Your bankruptcy lawyer will also help you to fill out the forms and input the required information.  This includes:

1.    A list of who you owe money to and the type of loan that it is.  For example, a credit card with a balance of $35,000 owed to Bank of America.  Gather copies of your most recent statements to show your attorney so that the paperwork can be completed faster. 

2.    How much money you make, how you make it, and how often you are paid.

3.    A list of your assets and property. This would include your home, cars, boat, etc.

4.    All of your monthly living expenses.  This needs to be realistic, not conservative.  It should include everything that you pay in order to sustain including gas, food, and medication in addition to things like utility bills. 

Your income information will determine how much money you can use to pay towards debt payments on a monthly basis.  This is important because the judge needs to feel confident that you are acting in good faith and making the best effort to repay your debts.  Make sure that your income and expenses are represented accurately before filing your petition.  An experienced bankruptcy lawyer can help you to complete the forms and to get your bankruptcy approved.