Chapter 7 and Chapter 13 Bankruptcy Attorney Susan J. Salehi Bankruptcy Lawyer for Ventura County, Santa Barbara County, Kern County, Los Angeles County Chapter 7 and Chapter 13
Law Offices of Susan J. Salehi
The Law Offices of Susan J. Salehi is committed to providing the highest level of legal advice and services to every client. I have limited my practice to helping thousands of individuals manage or eliminate their debts through Chapter 7 or 13 bankruptcies since 1992. Every client meets with me personally and every effort is made to treat everyone with respect and dignity during very stressful times. I am always very aware that I am meeting with people who have had no other exposure to attorneys or the legal system, and who rely on me to listen to them, and give them straightforward advice which they can use to decide if bankruptcy is their best option. It is important to me that everyone who meets with me is given the opportunity to fully discuss their particular situation and receive advice about what the best option for them is, exactly how much it will cost, and how their case will proceed.
Frequently Asked Questions:
1. Will I lose any property, assets or belongings?
Bankruptcy laws protect what you own. These are called "exemptions". Most, if not all, of your assets (including automobiles and certain amounts of equity in your home) are "exempt" allowing over 99% of our clients to keep everything and lose nothing. In a typical Chapter 7 Bankruptcy, filed through our office, you will lose nothing. In Chapter 13 (Debt Consolidation) you keep all the assets you choose because your debts are paid off or wiped out.
2. How soon can you stop calls from my creditors?
IMMEDIATELY! Once you retain the Law Offices of SUSAN J. SALEHI, the law requires your creditors deal with us and leave you alone.
3. Can you stop wage garnishment?
Yes. Any wage garnishment must immediately stop when we file your case.
4. Will I have to go to court?
Yes, but it is nothing to worry about because an attorney will be present to represent you. Only one hearing is required approximately 30 to 35 days after filing. This is normally a very short hearing called a "341a Meeting of the Creditors". While many times no creditors appear, it is possible that one or more of your creditors may be present to ask questions.
5. How does bankruptcy affect my credit?
Chapter 7 or a Chapter 13 Bankruptcy remains on your credit report for up to 10 years. However, you can immediately begin re-establishing your credit after your case is filed. Due to the fact that you are wiping out your debts and cannot file again for 8 years, credit companies want to be first in line to extend credit to you again. By not filing Bankruptcy, your credit report may show negative information for 7 years from the time you become current. By filing, negative reporting stops immediately. This allows you to begin re-establishing credit faster by keeping house, auto or other payments current.
6. Can you stop auto repossession?
Yes. No one can repossess your auto after your case is filed. In a Chapter 13, we can sometimes get a repossessed car back and pay for it through the Chapter 13 plan.
7. Does my spouse have to file with me?
No, but because California is a community property state, your debts are usually your spouse's debts. Creditors may pursue your spouse (or ex-spouse) for the entire community debt.
8. Can I sell or refinance my home?
In either a Chapter 7 or Chapter 13 Bankruptcy, you must obtain court permission to sell or refinance your home. After discharge, you may immediately assume a sellers loan or, after two (2) years, possibly qualify for a new home loan using your re-established credit record.
9. When can I purchase a new home?
After discharge, you may immediately assume a sellers loan or, after about two (2) years, you may possibly qualify for a new home loan (depending on your income and your re-established credit record). Additionally, there are many mortgage lenders who specialize in extending credit to those people who file Bankruptcy.
10. Can you stop my home foreclosure?
Yes. In a Chapter 13 case, we can permanently stop foreclosure by proposing a plan whereby you come current over time and continue to make the regular monthly mortgage payment. In a Chapter 7 case, if you are not current on your payments, the Bankruptcy will postpone the foreclosure until your case is dismissed or until your creditor/mortgage holder files a motion for, and is granted, "Relief From Stay".
11. What kinds of debts does Bankruptcy eliminate?
A Chapter 7 Bankruptcy will eliminate most all unsecured debts (credit cards, loans) but not secured debts such as your car or home; child support/alimony, payroll taxes, student loans, recent or unfiled income taxes, etc.. To keep your car and home, payments must kept current. In a Chapter 13 case you pay all or only a portion of your debts, depending on how much disposable income you have each month and how much nonexempt property you have.
12. Do I have to list all my creditors?
Yes. You must list all creditors at filing except accounts with a zero balance. If you no longer owe an individual or company money, they are not a creditor. Our office can assist you in obtaining a credit report so that you are certain to list all your creditors or ou can obtain one each year from www.annualcreditreport.com for free from each agency.
13. Can you remove a lien?
If the lien was not incurred to purchase the asset, was not consensual, and impairs your ownership interest in property (an exemption), it may be possible to have the lien removed by using lien avoidance techniques.
14. Why try to payback creditors in Chapter 13, why not just file Chapter 7?
If there is enough money left over after monthly living expenses the court may require full or partial payment to your creditors in a Chapter 13 debt consolidation. You may also have too many non-exempt assets you do not want to lose.
15. Can my co-signor be protected?
All consumer co-signors are protected under a Chapter 13 case. However, co-signors are still liable and creditors can attempt to collect against them in a Chapter 7 case, or after a Chapter 13 case if less than 100% was paid.
16. Will my employer be notified?
No, unless your employer is also a creditor or you authorize a wage deduction in a Chapter 13 case. Your payroll department would have to be notified of your filing in order to stop a wage garnishment.
17. Will my landlord be notified?
No, unless you have been evicted or are moving and need to include your landlord as a creditor in your Bankruptcy.
18. Will my bank accounts be affected?
Typically not. However, if you owe your bank or credit union money (your bank or credit union is an unsecured creditor), close the account and move to a bank where you owe nothing. Otherwise, at time of filing, your bank could offset or freeze your account.
19. Does Chapter 7 or 13 stop lawsuits and judgments?
Yes, immediately when we file your case.
20. Can I get out of a contract?
Yes. In both a Chapter 7 and Chapter 13 bankruptcy case you can cancel unwanted contracts as long as you discontinue the service and/or return the merchandise. Examples of this could include an agreement with an Exercise/Gym facility you no longer wish to attend or a lease/loan on a returned or unwanted Automobile.
21. How often can I file a Bankruptcy?
Chapter 7 bankruptcy allows 1 discharge every 8 years. Chapter 13 Bankruptcy lets you file as often as needed, if filed in good faith and 70% of unsecured debts were paid in a previously discharged Chapter 13.
22. What about back spousal or child support?
In a Chapter 13 case you pay back child and spousal support in full, without further interest, in your payment plan. In a Chapter 7 case, child and spousal support is not dischargeable. Although you can postpone the payments while you are in Bankruptcy, you eventually will have to pay them off.
23. What about back taxes?
Can be very complicated. As a general rule, in a Chapter 13 Bankruptcy you pay back taxes without interest, or further penalties over the course of your payment plan. In Chapter 7 - Bankruptcy, secured taxes, such as property taxes, cannot be discharged. However, unsecured, personal income taxes may be discharged if the taxes are 3 years old, you filed timely, you have not been assessed the taxes in the prior 240 days and you have not entered into a written "offer in compromise" to settle the debt.
24. Can Bankruptcy help with delinquent student loans?
In a Chapter 13 Bankruptcy you can pay student loans in your payment plan. In Chapter 7 Bankruptcy, student loans are generally not dischargeable (there are some rare instances where an extreme hardship may render student loans dischargeable).
25. Can I use or obtain credit during my Chapter 7 or 13?
No, not until you receive your discharge notice. In Chapter 13 - Debt Consolidation you must get court permission to incur debt over $250, except in emergencies.
26. How long will I be in Chapter 7 or 13?
Chapter 7 Bankruptcy usually takes about 4-5 months, although your creditors cannot attempt to collect on the debts once your case is filed. A Chapter 13 case takes from 3 to 5 years to complete.
27. How Do I Know If I Should file Bankruptcy?
You should never file bankruptcy unless it is your last available option. If you can afford to pay your bills, you should make every attempt to do so. Surepath Financial Services (877) 615-7873 may be able to help you pay your credit card debt at a lower interest rate or payment, however, you generally still have to payback the full balances over 5 years. If you are behind on your car payments, try calling the creditor to see if they will allow you to put 1 or 2 payments at the end of the loan.
Be very wary of the credit counseling/debt management companies.
Bankruptcy Is Not A Bad Word
If your creditors will not work with you and the stress and worry about lawsuits, wage garnishments, repossessions and foreclosures have become unmanageable, filing bankruptcy may be your best option. It is important that your meet with an experienced, well-qualified bankruptcy attorney to make sure that you receive the best advice about your options. Be skeptical about "bankruptcy mill" firms that offer low flat fees or offer to "beat anyone's advertised price" law firms. We are not selling used cars here; bankruptcy is a serious legal matter that have lasting negative effects if it is not handled properly. You may be dealing with firms that have assistants "interview" you by phone or over the internet or you may be dealing an attorney without very much experience in handling bankruptcy cases. We cautious if the firm advises that they do several types of law. There may not be an attorney at the firm that handles primarily bankruptcy cases, or worse yet, you may be forwarded to an attorney not even associated with the firm who pays for leads from the first law firm. If you do not meet with the attorney at the first consultation, or if the attorney does not want to disclose how many cases they have filed or how many years they have been practicing bankruptcy law, you may want to seek a second opinion. Filing a bankruptcy may be better than having a foreclosure on your credit record. Clients have reported that they have been able to rebuild their credit and even buy a new a new car or house within 2 years after their bankruptcy.
Another thing to consider is that some debts cannot be discharged in bankruptcy, even though you you must list them in your case. Child support and spousal support cannot be discharged. Generally, more recent taxes cannot be discharged this is a complex area that requires review by an attorney. Payroll taxes cannot be discharged. Student loans, debts due to fraud, injuries from a DUI; injuries from intentional acts, criminal restitution also cannot be discharged, although there are exceptions to even these. If you driver's license has been suspended due to unpaid claim from a car accident, it can generally be reinstated by filing bankruptcy.
28. What does it cost to file bankruptcy?
The Court fee for a Chapter 7 is $306.00 and $281.00 for a Chapter 13.
Chapter 7 attorney fees start at about $1050 for a simple consumer case and will be more for more complicated or business cases. Everyone will receive a quote for the flat fee cost for their case at the initial free consultation. Chapter 13 Attorney fees are set by the Court.
29. What Do I Need To Bring To the Consultation With The Attorney?
Paystubs or proof of income for the six months prior to the month you are filing in.
Tax returns for the two prior years.
Credit report - you can get a free one from each agency once a year at www.annualcreditreport.com.
All other debts not listed on your credit reports.
IRS or FTB tax notices.
Other documents may be requested at the consultation, depending on the facts in your case.
30. What Happens At the Free Consultation?
I will meet with you personally to go over all of your financial information and help you decide is bankruptcy is the solution for you. I will quote you a flat fee at that time and explain exactly how your case will be handled. You can make a down payment and you can then refer your creditors to my office. We will advise them that you have retained us and instruct them to stop contacting you. We can set up a payment plan, but all Chapter 7 fees must be received before we can file your case or the balance will be discharged in your case. Typically, for Chapter 13, a portion of the fees are paid up front with the filing fee and the balance may be paid through the plan as part of the Chapter 13 plan payment.
31. What is the process in a bankruptcy after I file?
You need to take a credit counseling course before you can file. We refer clients to www.cricketdebt.com. The fee is $36 and they fax your certificates to my office at (805) 830-0387.
As soon as your case is filed, the "automatic stay" goes into effect.
This will immediately stop foreclosures, repossessions, lawsuits, garnishments, and further collection calls from creditors.
We can file a case the same day that you come in, if necessary. All cases are filed over the internet and a case number is issued by the Court immediately.
So, the sooner you come in for your free consultation, the sooner you can get the protection you need from creditors.
You will need to attend a Meeting of Creditors - the 341 hearing - about 4 to 6 weeks after your case is filed. I will be there with you, the trustee (the person in charge of your case) will be there, any creditor can appear although they rarely do, and a whole roomful of other people filing bankruptcies will be there. You will need to bring your driver's license and social security, or some other original government-issued document with your full social security number on it, such as an original W-2 form from your employer.
You will need to take a second counseling class after you file which must be completed with 60 days after you attend this hearing. We refer people to www.a247class.com. The charge is $17.50 and you will enter the attorney code "SALEHI" so that it is emailed directly to my office to be filed with the Court. If you fail to take this case by the deadline, your case will be dismissed and there will be a new court fee of $220.00 and attorney fees of $750.00 to reopen your case and file the missing certificate. So the best advice is to take this class as soon as you receive your case number from my office.
Creditors and the trustee have 60 days from your Meeting of Creditors to object to the discharge in your case, or the discharge of a particular debt. There are other objections which can be filed. It is important to meet with an experienced, well-qualified attorney to discuss potential objections in your case.
If no objections are filed, the Court will issue the discharge which will discharge all dischargeable debts. It is important to meet with an experienced, well-qualified attorney who can explain which debts are not discharged and what to do if you have a house with a judgment lien on it, or if you have a house or cars or other secured items you want to keep.
32. How Do I Know If I Need A Chapter 13 or A Chapter 7 Bankruptcy?
Chapter 7'swill discharge most unsecured debts (see the exceptions above) and to get rid of secured debts if you surrender the collateral. If you want to keep a car with secured loans, you may need to "reaffirm" these debts. The attorney can explain this in more detail to you.
A Chapter 13 is a reorganization/repayment bankruptcy that can last from 3 to 5 years. Chapter 13's are typically filed for clients who need to stop a foreclosure or repossession, who have assets they cannot exempt and might lose in a Chapter 7, whose income is too high for a Chapter 7, who have a sole proprietorship business they need help reorganizing, who want to " strip off" an unsecured second mortgage, or have already filed a Chapter 7 within the previous 8 years.
There are a lot of good reasons to file a Chapter 13 but you must meet with an attorney experienced in filing and confirming Chapter 13's as they are much more complex and complicated that most Chapter 7's. The procedures and requirements can vary widely from area to area, and even from judge to judge so it is important to meet with an attorney who has years of experience in that particular area.
33. What Are The Most Common Mistakes People Make When Filing Bankruptcy?
Failing to list all assets, wherever they are located and even if they are not in your name
Failing to list all debts, even ones you want to keep or don't think you can discharge
Transferring assets out of your name shortly before filing, without receiving full market value for them
Paying friends or family back shortly before filing
Running up your credit cards or taking on new debts shortly before filing when you know you can't pay them
Failing to show up at your Meeting of Creditors
34. If I Already Filed Bankruptcy, Can I File Again?
You can file a Chapter 7 every 8 years, from filing date to filing date.
If you need bankruptcy protection before you can file Chapter 7 again, you may be eligible to file Chapter 13.
35. Will The Debts I List In My Bankruptcy Be Erased From My Credit Report?
NO! They will still be listed, but will be reported as included in your bankruptcy. You should check your credit report a few months after your discharge is entered. You will need to contact the credit reporting agencies if a creditor is not reporting the bankruptcy status of your account.
36. Can I File Without An Attorney?
Yes. You can technically file a bankruptcy yourself, and this is called " filing pro se". If you use a document preparation service, they can only type the information they give you. They cannot give you any legal advice at all, and it does not make sense anyway to ask a paralegal or typist for important legal advice. You may not know that anything was done wrong until the trustee tries to sell property which wasn't properly scheduled and/or protected, or the trustee or a creditor objects to your case because it was done wrong. Even worse, you may not know that something was done wrong until years after your case was filed when it is too late to do anything about it.
We are proudly a debt relief agency.