Learn Which Debts Can Be Included in a Chapter 13 Bankruptcy Filing and What is Exempt

Working with a Chapter 13 Attorney in a Chapter 13 bankruptcy, you can get a fresh start by creating a way to get out from under your debts.This type of bankruptcy does not wipe out your debts but creates a way for them to be repaid over time.  In most cases, only a portion of the total debt is paid, and once the payments have all been received, the remaining debt is discharged or wiped out.  This provides a way for creditors to receive some form of payment without you going under from trying to keep up with debt obligations.  In essence, it is a compromise. 

Most of your debts can be included in a bankruptcy filing.  There are, however, a few debts that you cannot include and will have to continue making payments on.  These include:

• Home mortgage.  If you are planning on remaining in your home, you will need to keep making the loan payments as agreed.  If this is difficult to do, ask your lender to consider a loan modification.  They may offer you the option of paying a lesser amount for a set period of time before reverting to your original payment.  In other cases, you may be able to reduce the interest rate and lower your monthly payment by refinancing. 
• Child support.  Parents that are obligated to pay child support as part of a court order will need to continue making that payment as agreed.  This also applies to alimony. Both a Chapter 13 bankruptcy and a Chapter 7 bankruptcy, will not eliminate these debts. If you need a reduction, you will have to seek one through family court in the state that ordered it initially. 
• Student loans.  If you have student loans or other government guaranteed debt, you will need to continue making these payments and cannot get rid of them through filing a bankruptcy. 
• Taxes.  It may go without saying that tax obligations cannot be eliminated through bankruptcy.  The IRS, however, may be willing to reduce the amount that you owe directly.  There is an application process that you need to go through in order for them to consider this. 

While these debts cannot be included in your bankruptcy filing as you work with a Chapter 13 Attorney, they are included in the calculations of what you can afford to pay towards debt on a monthly basis.  The way that a Chapter 13 works is you list out your income after paying taxes and all of your monthly expenses.  This includes paying for housing, utility bills, cell phones, groceries, gas, insurance, etc.  You can also include the payments that you have to make to debts such as child support and student loans.  After deducting everything that you have to pay, the amount that is left can be allocated towards debt payments.  In this way, while you cannot discharge all of your debts you still get credit for them in determining what you can pay towards your other ones as you work with a Chapter 13 Attorney.

To learn more about the process and how a Chapter 13 bankruptcy works, call and schedule an appointment. 

Seniors: Speak With a Bankruptcy Attorney Before Giving Up!

Senior citizens often need a bankruptcy attorney in order to protect their freedom and independence.  It is common for seniors to run into financial difficulty.  Careful planning is often not enough to prevent financial troubles because life has a way of throwing curve balls.  For example, monthly retirement payments may be lower than expected, stocks that you received dividends from may no longer be paying out, and medical bills may have caught you by surprise.  These are only a few examples of the many unknowns that when they happen, can leave seniors in a financial jam. If this sounds like you – you’re not alone. 

We work with a lot of seniors that are worried that they will have to give up their home in order to take care of debts and stop the collector calls.  After living in your home for decades and working hard to pay down the mortgage, you shouldn’t have to walk away while in your retirement years.  Don’t give up hope because we can help.

In a Chapter 13 bankruptcy, you can have a payment plan that will prevent your creditors from pursuing further collection, and you can stay in your family home.  In this scenario, we can help you to create a plan after reviewing how much money you have come in every month and what your true expenses are.  This is different than when you file for a loan.  Instead of only looking at your debt payments, we want to know what you spend on groceries, gas, medication, doctors, etc.  In order to capture a true picture of your financial situation, we need to know every detail. As a bankruptcy attorney, we will then work to create a plan for settlement and repayment.

When you file a Chapter 13, you are proposing to repay some of your debts but not all of your debt.  Once we determine how much money you have to apply towards debt payments every month (after living expenses and bills) we will propose to make a set payment amount on a monthly basis.  It will be disbursed amongst your various creditors for a period of a few years.  Any debt that remains will be discharged or eliminated.  For example, if right now you should make $950 in monthly debt payments and owe a total of $45,000, we could propose that you only pay $300 a month for three years which equals $10,800.  

The court will decide whether or not the plan for repayment is acceptable. Your creditors will also have the opportunity to protest, but most of the time they are happy to get something instead of not getting paid at all.  As a bankruptcy lawyer, it is our job to demonstrate why you should be able to file for a Chapter 13 and why the repayment plan is the best you can do.  Once it goes through, your creditors cannot come after you for any more money and you will be able to live comfortably in your home.   

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. 

If You Need Bankruptcy Help Here are the Guidelines You Need to Meet Under BAPCPA

We offer bankruptcy help to families throughout California.  It is common for clients to ask us if they will qualify given that the bankruptcy laws changed a few years ago.  In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed at the federal level and now anyone that wants to file needs to meet those guidelines in order to do so.  There are multiple components to this legislation.   It aims to protect consumers by educating them and better prepare them to manage their finances, take discretion away from judges, and protect creditors by making sure people aren’t constantly filing for bankruptcy.  We have found that most of our clients still qualify under the new guidelines.  

Here is what you need to know:

Time Delays: If you have filed bankruptcy in the past, there are rules for how long you need to wait before you can file again.  This can range from two years to eight years, depending on the type of bankruptcy filing you did before.  We can review your case and let you know if you have waited long enough. 

Credit Counseling: Before you are allowed to file for bankruptcy you now need to take a mandatory credit counseling class.  This can be done online 24/7 or over the phone and only costs around $50.  It takes an hour, so this isn’t much of an inconvenience.  If you can’t afford a class, they have to let you take it for free. If you have more questions about the course, call us for bankruptcy help. 

Means Test: Before, a judge had the discretion to determine if you should qualify for bankruptcy based on your income and expenses.  Now, there is an eight-page document that needs to be filled out that uses the income you earned over the past six months and includes mandatory deductions.  It also has a provision for qualifying under the median household income guidelines.  In Riverside, CA the average household income is $57,096 according to the U.S. Census Bureau.  This means that most families in the area would qualify since a couple with four children only needs to make less than $80,910.  This has made it easier for most families to qualify and for those that make more than the median income; they can still qualify by using the standard deductions. 

Debt Management: If your bankruptcy gets approved, you have to participate in a debt management course. This course teaches how to manage finances and debt payments so that going forward you are less likely to need to file bankruptcy again.  We have found that people, who seek bankruptcy help, generally like this course because it provides tools they can use later on and most of our clients want to use this as a fresh start that doesn’t have to be repeated.

We understand that the bankruptcy laws can be confusing and will help you to successfully navigate through them.  For more information or a consultation, give us a call. 

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.

What You Should Know Before Hiring a Bankruptcy Attorney

If you are in over your head with debt, a bankruptcy attorney can help.  When financial circumstances become overwhelming, there are ways you can address them in order to get back on your feet.  While bankruptcy used to have negative associations, the down economy has led many people to consider it as an option.  One thing you should evaluate is the level of stress your current debt load and financial situation is creating in your household.  Is that stress worth continuing the struggle and dealing with non-stop debt collection calls?  Many people find a huge sense of relief when the calls and letters finally stop. 

Before you hire a lawyer, there are certain things you need to know.

Bankruptcy Law is a Specialty

Just because someone is a lawyer does not mean that they know how to handle bankruptcy cases.  Yes, they can research it but that time will be added to your bill.  Why spend more money than you have to when you can work with an expert that can complete the paperwork and proceedings with efficiency?  Working with an expert attorney will also give you the advantage of learning about certain areas of the law that others may be unaware of.

There Are Several Types of Bankruptcy

There is no one size fits all bankruptcy solution.  There are several chapters within the bankruptcy code that you can file yours under.  A skilled bankruptcy attorney will be able to discuss your current financial situation with you and make a recommendation for what is likely the best way to file.  For example, there are liquidation bankruptcies where assets are sold in order to pay creditors and bankruptcies that are designed to pay creditors back over time with a set payment plan.  The type that you file should be based on your current financial capabilities and your goals.  

You Can Typically Keep Your Home

Unless you have a staggering amount of equity in your home, you can typically maintain ownership of it even when filing bankruptcy.  If this is your goal, let your attorney know right away so that they can create a legal strategy in order to accomplish it.  Even if you are facing foreclosure a bankruptcy may be able to stop the proceedings and allow you to continue living there.  

Share the Details

When speaking with your bankruptcy attorney, be sure to provide any and every detail about your financial situation and your goals.  This way they can create a legal strategy that will be successful.  If the hearing officer or judge feels that you are untruthful about your financial situation they may not approve the bankruptcy in the first place.  Transparency matters in this situation. 

Ask About Fees

Any time you hire a lawyer you should ask what they will charge and how they will bill you.  It is important to enter a relationship with a mutual understanding.  This will also help you to budget for anything that you need to spend. 

If you are considering filing bankruptcy, The Travis Law Firm can help.  Schedule your consultation by calling (951) 274-9501.