Rita Geraldo is a single mother with 3 children who lives in a small home in Los Angeles. Rita works as a dental assistant in Beverly Hills but could just make her payments and was nearly drowning in debt. However after a change in the interest rates on her adjustable rate mortgage these payments have doubled and reluctantly she cannot afford to pay her credit card bills. Missed payments have caused the interest rates on her credit cards to skyrocket in only a few months and this is on top of the penalty fees for failing to pay. As her debt grew even larger her credit card companies turned over Rita’s accounts to various debt collection agencies. Before only the fear of debt was keeping her up at night but now the collection agencies are making her phone ring off the hook with threats of lawsuits, garnishments of wages, and levying of bank accounts. Rita knew it was now time to take charge of her debt problems.

Rita had heard of bankruptcy before but was embarrassed and was not sure where to start. Rita found an attorney in Los Angeles near the office where she worked and he walked her through the process of filing for bankruptcy. Most individuals will either file for a Chapter 7 or Chapter 13 bankruptcy. Filing for a chapter 7 would allow her to eliminate all of her unsecured debt such as credit card bills and doctors bills. While filing a chapter 13 puts all of your debt both secured and unsecured on a 3 to 5 year payment plan based on your excess income. In certain circumstances, a Chapter 13 bankruptcy can be used to get rid of a second mortgage entirely. A chapter 7 will only allow you to keep exempt assets which for most will be every asset you own. A Chapter 13 bankruptcywill allow you to keep both exempt and nonexempt property but takes more time and is more complex.

Rita really wanted to keep her home and even if her credit card bills were eliminated she could not afford her 2 mortgages so she decided to file for a Chapter 13 bankruptcy. Filing a Chapter 13 bankruptcycreates the opportunity for a lein strip. A lein strip allows a second mortgage which is generally classified as secured debt to be reclassified as unsecured debt like her credit card bills.

She then told the attorney of all her debts, creditors and collection agencies. After starting the process with the attorney Rita had to take a short Debt Management course online. At the attorney’s Los Angeles office, they took care of the mountains of paperwork involved in the process.

The process still had a few steps left as Rita had to take part in a meeting with the bankruptcy trustee. At the meeting she had to answer questions from the trustee which she answered honestly. The meeting with the trustee includes you, your bankruptcy attorney and your creditors. Most of the time the creditors don’t show up. After it was determined that she was not hiding any assets a payment plan was established using the excess income she had after paying her expenses. This calculation excludes any payments to unsecured debt as expenses (i.e., credit card debt). The payment plan goes to a confirmation where a judge decides if the payment plan is satisfactory. Now as a part of the payment plan she only needs to pay her excess funds over the next 5 years while the rest of her debt is eliminated.

Rita is now living comfortably and can afford to pay her mortgage and all her other bills without living in fear of harassment from debt collection agencies.

To learn more about bankruptcy, feel free to contact Mr. Darvish at (310)205-5529. He is truly an attorney that cares and places great effort in making sure his clients understand the process thoroughly.

Los Angeles Bankruptcy Attorney | Los Angeles Bankruptcy Attorneys

Los Angeles Bankruptcy Lawyer | Los Angeles Bankruptcy Lawyers