Hiring a Los Angeles Bankruptcy Attorney is crucial to becoming debt free.  Are you are considering filing for bankruptcy and are overwhelmed with financial stress caused by creditors , or, your bills are piling up and making you lose sleep over what your options are?  California leads the nation in the amount of bankruptcies filed each year according to the AACER (Automated Access to Court Electronic Records.)  Hiring a professional who has the tools to assist you in your rough times with highly trained individuals and compassion for what you are going through is an important step in the recovering process. Our team at the Law Offices of Alon Darvish can help you with making the right choices and steer you back into the path of financial stability. For some, the embarrassment of facing such challenges will result in the decision to go about doing it alone which is a mistake in the long run as such a big decision plays an important part in your future.  The chances of making errors during the bankruptcy process can mean you not being awarded the discharge of your debts and can become another hassle in your life. Here are some examples of why hiring a qualified individual can make the process stress free and beneficial.

Knowledge of the Law

California attorneys are knowledgeable about the California Bankruptcy process and will know the laws that need to be applied for each case.  New Laws  under the Bankruptcy Abuse Prevention & Consumer Prevention Act make it more difficult for individuals to file for bankruptcy by themselves.  Bankruptcy laws vary depending on the state they reside in, therefore having a qualified Los Angeles Bankruptcy Attorney helps the process along.  One of the advantages of having an attorney is that they understand your situation and can advise you on what is going on so you are not left in the dark during your troubling times.

Paperwork

The process to file for bankruptcy in Los Angeles is time consuming, as the amount of paperwork that needs to be completed is significant.  Making sure the bankruptcy petition has a the correct information is crucial to your bankruptcy as it is the foundation of what needs to be done.

Los Angeles bankruptcy attorney can assist you with gathering all the proper information needed and they will help you file them accordingly.

Representation

Once you have hired a Los Angeles bankruptcy attorney, they will represent you during your case.  Bankruptcy attorney will send out letters sent out to creditors that you have and they will help eliminate the phone calls and collections of property as they are required to contact the bankruptcy attorney, not you.  Your Los Angeles Bankruptcy Attorney will accompany you to your creditors meeting which is a vital part of the process to file Chapter 7 bankruptcy .  This meeting will determine which property can be taken and sold to repay the debts.  Usually, bankruptcy trustee’s do not take property from the debtor because they are entitled to keep certain assets.  However, in order to determine whether your assets are safe (i.e., your home, car, cash in the bank, etc…), you should speak to a knowledgeable Los Angeles Bankruptcy Attorney. The trustee will be asking questions which can be intimidating and with an attorney present, they can help you answer them so you avoid costly mistakes in the long run.

Los Angeles Bankruptcy Attorney

Los Angeles Bankruptcy Attorney

The fair treatment of creditors and public policy both work to limit the extent of the discharge for debtors. The bankruptcy code was not designed so that debtors can take advantage of creditors for their own profit, and so various provisions of the bankruptcy code limit the debts that are discharged if they were incurred dishonestly or by fraud. This includes debts that were incurred on credit cards where the debtor entered false information on the credit application and also includes major debts for luxury goods that were incurred shortly before filing for bankruptcy. However, a creditor must challenge the discharge of these debts, and the court must notify the debtor and conduct a hearing; otherwise, the debts will be discharged.

There are debts that are discharged and others that are not allowed to be discharged. Most unsecured debts acquired by the debtor in good faith and if they cannot pay them off are allowed to be discharged under a regular Chapter 7 bankruptcy . Debts that are never discharged in a bankruptcy can include:

1. Recent taxes
2. Trust fund taxes
3. Child or family support
4. Criminal fine or restitution
5. Accident claims involving intoxication
6. Debts not scheduled
7. Penalties payable to the government other than tax penalties
8. Student loans
9. Debts listed in prior bankruptcy where debtor was denied a discharge
10. Taxes for years where return unfiled or filed for less than 2 years

Some of the listed debt may be discharged if the debtor can prove hardship to pay them back within a reasonable time frame.
Secured debt that is discharged is a little more difficult as the debtor might want to keep that asset such as a car, or home. The individual debtor can surrender the secured property, pay for it in a lump sum, or sign a Reaffirmation Agreement to keep it. In most cases, only prepetition debts are discharged. In an involuntary Chapter 7 case that is brought by a creditor rather than the debtor, discharged debts also includes debts incurred between when the case was filed and when the actual bankruptcy case commences, if the Chapter 7 bankruptcy is approved by the court.

An automatic stay is put once a bankruptcy process begins, this prohibits the collection of debts by the creditors. If the debtor receives the discharge of the debts, then the injunction succeeds the automatic stay and enjoins any further actions to collect the debts from the debtor. If a creditor violates the injunction and tries to collect the debts, then the courts may issue a civil contempt order. Generally, waivers of certain discharged debts are not enforceable except in specific circumstances. Waivers must be in writing and approved by the court. A reaffirmation agreement, for instance, must satisfy these and other requirements to be enforceable. A debtor may volunteer to pay a debt, but the creditor cannot harass or intimidate the debtor into doing so.

A Chapter 7 discharge is granted to an individual debtor if there have been no challenges, which is usually the case. Creditors have 60 days after the creditors meeting to challenge the discharge of its debt. If there are no challenges and if the debtor did not sign an reaffirmation agreement, then after about 3 months after the creditors meeting, the court sends the debtor the notice of the discharge. If the debtor signed a Reaffirmation Agreement and is not represented by an attorney, then the court requires the debtor to appear before it so that it can ascertain whether the debtor understands the Reaffirmation Agreement and that the debt will continue beyond bankruptcy. The debtor can either accept the agreement or cancel the agreement. Regardless, the discharge is granted at this hearing.
A Chapter 7 discharge relieves the debtor of the liability of most prepetition debts and some post petition debts, such as the claims resulting from the rejection of executory contracts or the avoidance of a transfer.

Chapter 7 bankruptcy is a liquidation proceeding where your unsecured debts are discharged and all but your exempt assets are sold. Bankruptcy helps millions get out from under the grip of creditors but chapter 7 can’t help everyone. With the exception of unsecured debt, chapter 7 will usually not be helpful where there is an excess of income, equity, or secured debts you are thinking of keeping. In addition to these categories, bankruptcy won’t have an effect on certain debts due to concerns of bankruptcy abuse such as certain fines, student loans, and certain judgments. Finally, look at your secured debt versus unsecured and balance the positives and negatives.

It is not ideal to file bankruptcy if you have lots of assets or equity. In the typical Chapter 7 bankruptcy , the majority of the debt will be from credit cards and the debtor will have few assets. With few assets, the general exemption will not be exceeded and there will be no non-exempt assets for the trustee to sell. In bankruptcy, equity is treated like any other asset and if there are assets that are not considered exempt, the bankruptcy trustee has the right to sell them and pay the creditors. Therefore,if you had more nonexempt assets than unsecured debt you would probably be better off not filing. Or, if you have assets that you are determined to keep which exceeds the exemption amount, you are essentially allowing the bankruptcy trustee to sell your assets. You could end up giving the trustee your family heirlooms, cars, houses, stocks and bonds. This also extends to chapter 13 bankruptcies because to have a valid chapter 13 plan the amount paid to unsecured creditors must equal the amount that the same bankruptcy in chapter 7 would yield.

If you have substantial excess income, you may not be eligible for chapter 7. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) changed bankruptcy law to prevent abuse. This added requirements like the means test which won’t allow you to file for chapter 7 if your median income is above the median income for your area for the particular family size. With too much excess income you will not be able to qualify for a chapter 7 and the bankruptcy trustee may decide to convert your bankruptcy into a Chapter 13 .

Chapter 7 is not recommended where the majority of your debts are unsecured but are in special categories of bankruptcy law. Bankruptcy is designed to help those who are unfortunate rather than ill willed. If you have debts cause by drunk driving, larceny, embezzlement, or similar crimes, these can’t be discharged. Student loans and support payment are also not dischargeable as it would encourage abuse of bankruptcy.

Finally if your debts are primarily secured debts, chapter 7 might not be the right option. Since Chapter 7 bankruptcy only discharges unsecured debts the secured debts will survive the bankruptcy. If you also have a substantial amount of unsecured debt and relieving that debt would allow you to pay your secured debt, then chapter 7 may be the right solution. It may also improve your ability to get a loan modification because you will have more funds available when your unsecured debts are discharged. These are only broad areas that you may consider and only a Los Angeles Bankruptcy Lawyer can analyze your situation and help you plan the right course of action.

• State your name for the record
• Did you read the bankruptcy petition prior to signing it
• Did you understand the contents of the bankruptcy petition prior to signing
• Have you listed all your debts and assets in the bankruptcy schedule
• Have you sold or transferred any assets (including real estate) within the past 4 years?
• Do you owe any child support or alimony (domestic support obligations)?

By the time you attend the creditors meeting, the bankrupty trustee has already gone through your bankruptcy petition, your tax returns, pay stubs, etc…to determine what your financial situation is.  If they determine something unusual about your bankruptcy petition (i.e., you’re filing for bankruptcy, yet you own two vehicles (a BMW and a Range Rover) which you would like to keep, they question your motives.

To learn more about filing for bankruptcy or the types of questions they may potentially ask you, feel free to contact a Los Angeles Bankruptcy Attorney.