Bankruptcy is the process through which, individuals or businesses who are in conditions of surplus debts and in the situation of financial struggles, get relief of this scenario and regain their stability with finances. In order that this process be debtor beneficial, the type of Chapter against which bankruptcy is filed will be important (more…)
Category: Bankruptcy
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Should I Keep My Car during Bankruptcy?
Bankruptcy is a name which often causes people to panic. This is so because most of the time, it is associated with the image of being thrown on the streets penniless. However, nothing could be farther than truth. More often than not, the financial situation of an individual is tight, which has led them to file for bankruptcy. Since financial problems can affect a number of areas of your life including your job, property, and vehicle, many people question whether it is appropriate to keep their vehicle if they plan to file for bankruptcy. (more…)
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Know your Bankruptcy Trustee in Chapter 7 Bankruptcy
A Chapter 7 Bankruptcy trustee is appointed by the court for every Chapter 7 bankruptcy filed with them. These trustees mostly work in favor of the creditors. The prime responsibility is to go over all the paperwork to ensure that they have been submitted in order, to reverse any recently performed financial transactions that may be invalid in the context of bankruptcy and for liquidating viable assets in order to repay the creditors.
A bankruptcy trustee is paid a fee by the court for examining all the associated paperwork. In addition to this, if the trustee is able to find assets that can be liquidated, then he can claim a percentage of it too – the assets under purview include those that have been sold or transferred ahead of the bankruptcy. Hence it indicates that the trustee will be more inclined towards the creditors and not the petitioner who is dealing with the bankruptcy situation.
Here is a sneak peek of the tasks that are generally carried out by your Chapter 7 Bankruptcy Trustee
1. Meticulous review of the bankruptcy petition – Every detail in the bankruptcy petition is revisited by the trustee. Verification of your claims is also their responsibility and a part of this job requires them to check if you have recently transacted a valuable asset for a lesser price or no money. The trustee also requests that claims are to be backed up with pay stubs, tax returns, bank statements or a list of all assets expenses. They will also need to know which debts are expected to be discharged
2. Chair of the meeting of creditors – The 341 hearing or the meeting of creditors is presided by the bankruptcy trustee after the Chapter 7 bankruptcy case has been filed. The majority of the questions on your provided paperwork is generally asked by the trustee as the creditors generally do not attend these hearings. If the paperwork is in place, the meeting is generally conducted concisely
3. Evaluating the viable assets for liquidation – A Chapter 7 bankruptcy trustee evaluated all assets of the petitioner to understand if there are any that can be liquidated so as to pay the creditors. The advantage is that they enjoy a percentage of the money from this liquidation. It has to be noted that Chapter 7 permits certain properties to be exempted from liquidation – home and car equities are common exemptions. The trustee has to work around these exemptions. As most of the cases are ‘no asset’ cases, which means that there are no properties for liquidation, a trustee has the power to question an exemption given to an asset. In those situations, the judge has the final say to determine whether the debtor can avail exemption or not
The need for a right bankruptcy attorney
Since the bankruptcy laws are complicated, it generally takes time to process a bankruptcy filing. Loss of time eventually amounts to a loss of money – hence the right guidance helps debtors save time. A right law firm like Recovery Law Group puts to use their experience of streamlining and handling of Chapter 7 bankruptcy filing cases and in turn, save a lot of time for their clients. They regulate the entire ordeal of filing with the correct paperwork, gaining an exemption for their most important assets and also protecting their properties from liquidation.
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How to Stop Wage Garnishment And Collection Actions of Creditors in California
Time and again, bankruptcy lawyers such as those of Los Angeles based law firm Recovery Law Group reiterate that with a few exceptions (taxes, alimony, child support, student loan etc.) garnishment does not take place in states of California, Nevada and Texas unless a creditor has filed a case against you in a law of court and obtained judgment against you. In case they get a judgment against you, they need to file a request for garnishment which is issued to your employer. With this notice, your employer will need to provide your wages to the creditors at a specified time. However, the process requires you to be aware (via a notice) of the garnishment. Post receiving the notice, you need to ensure that you take appropriate actions against it (demand garnishment hearing, prove federal exemptions to the wage garnishment, etc.)
Considering that you are already going through bad financial times, wage garnishment can really make life difficult. It is important that adequate steps are taken to prevent such instances from happening. One of the ways you can prevent garnishment is that according to federal laws, first $217.50 of weekly take-home pay (after deduction of taxes and social security) is totally exempted from garnishment. In case your wage is more than the mentioned amount, your employer needs to pay the garnishing collector either of the smaller amounts:
- Your weekly pay after deductions and exemptions ($217.50) or
- 25% of your weekly pay after deductions
The specific amount is linked to minimum wage. In case the hourly minimum increases from $7.25 per hour, the weekly amount also increases. It must be kept in mind that this rule applies to wages only as per the federal rule. Supplemental Security income, Social Security payments, and unemployment are exempt from any non-governmental garnishing creditors.
If you wish to tackle the issue of a wage garnishment, it would be better if you take the services of an experienced bankruptcy lawyer. You can opt for filing for bankruptcy under either Chapter 13 or Chapter 7. When you file for bankruptcy, the automatic stay is enforced which stops creditors from taking any garnishment actions. Simultaneously, the defense should be built up to either slow down or prevent the creditors from any garnishment action.
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Does filing bankruptcy relieve you of debts?
It is probably a myth that many of us have come to believe that bankruptcy relieves one of all debts. Although it may sound attractive about not being obliged about settling your creditors and make a new start with your business, there are some facts to the discharge of debts that one needs to clearly understand about – it may be a surprise that bankruptcy conditions when filed do not eliminate all debts.
When filing for bankruptcy using Chapter 7 or Chapter 13, the U.S. Bankruptcy code doesn’t enforce you to pay certain outstanding debts. The code was primarily designed for the benefit of honest debtors who struggle with huge debt loads. It benefits them by discharging certain debts at the culmination of a bankruptcy case. Let’s understand further about discharges and what debts can be cleared and what cannot be
- Non-Dischargeable Debts: There is a category of debts that are directly ineligible for a discharge. Payments ordered by a family court (Alimony/ Child Support), Tax Debts and Secured Debts (involving collateral) fall under this category. In most cases, student loan debts are also non-dischargeable
- Liens: Though debts associated in a property are discharges, the liens on the property held by a creditor cannot be eliminated. This will end in a condition of repossessing the property by your creditors who have liens
- Unsecured Debts: These are debts without collateral – commonly includes a credit card debt. In these cases, the creditor cannot take possession of the property if you fail to make any payments
- Chapter 7 & Chapter 13 bankruptcy debts: These codes allow a discharge of certain debts at the end of the bankruptcy case but the nature of the discharge will differ depending on the code. To cite an example of Chapter 13 personal bankruptcy scenario, the individual will continue to pay the creditors for three to five years using a repayment plan. At the end of the plan, the pending debts are eligible to be discharged. On the other hand, the scenario with Chapter 7 bankruptcy eliminates larger debt loads as the people who file for bankruptcy do not make any payments – they may liquidate their assets to pay their creditors.
At Recovery Law group, we work with individuals and companies towards the discharge of debts after a case of the bankruptcy filing. The needed guidance and assured steps towards a positive outcome in terms of debts discharge are meted out to our clientele in Dallas and Los Angeles areas.
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Being Prepared For Your Meeting of Creditors
The meeting of creditors or a 341 hearing is a mandatory process conducted by the bankruptcy trustee when there is a filing of bankruptcy. During a filing of bankruptcy, the petitioner provides several documentations related to the situation including the petition and schedules. In the hearing process, the trustee gets the opportunity to ask the petitioner questions regarding the furnished information. The answers to these questions have to be answered under oath.
If you are an individual who has filed bankruptcy, it is imperative that you have to be part of this meeting of creditors. Needless to say, this meeting can be an anxious ordeal and can make the individuals to panic. But be prepared for this meeting by knowing what will be asked can help alleviate the anxiety prior to appearing for this hearing. (more…)
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Why Hold Back from Bankruptcy Filing?
Many times, people who owe creditors money, lead a life that is full of threats and harassment. Debt collection agencies do not leave any stone unturned to get back the money that you owe them or the creditors. In case you too are plagued with incessant phone calls, urgent notices or demands for financial settlements, why are you hesitating to file for bankruptcy? More often than not people are afraid of filing for bankruptcy due to the various myths surrounding it. Lawyers of Sacramento based law firm Recovery Law Group provide a number of common reasons why people restrain themselves from filing for bankruptcy:
• Bankruptcy Hurts You Financially: Credit card companies allow you to make purchases now and pay the money later while charging heavy interest on the amount of transaction. Since you are paying for a long period of time, the loans never get paid off while you keep on increasing your debt by continuous usage of credit cards. In the long run, this causes you to have poor credit, which can be eliminated by filing for bankruptcy. With the bankruptcy filing, you can get your old debts discharged (completely or partly) and start fresh. In this manner, you can rebuild your credit score in a couple of years compared to struggling with bills for a long time.
• Your Credit Gets Ruined for a Decade: It won’t be incorrect to say that getting loan or credit card becomes slightly difficult after bankruptcy, but getting one with poor credit score is highly unlikely too. It is important to note that filing for bankruptcy provides you with a chance of getting a fresh slate to start anew. When you make regular and timely payments on your mortgages, utilities, rents and any other debts, your credit ratings will improve. This will ultimately get you approval for secure credit cards and loans within a couple of years of filing for personal bankruptcy
• Lose Your Home by Filing for Bankruptcy: Though there are chances in case of personal bankruptcy (Chapter 7) where personal assets including property are sold off to clear the creditors’ dues, however, the possibility of this happening is slim. This is because of strong federal exemptions. Moreover, if you are eligible and file for bankruptcy under Chapter 13, you won’t be losing your home at all.
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Should I Avoid Summons if I Plan to File for Bankruptcy?
Recurring debts and overspending, as well as some ill-fate, can cause financial problems in anyone’s lives. If you are facing issues regarding the shutdown of utilities or foreclosure, repossession, etc. or are at the receiving end of legal actions due to non-payment of dues and similar debts, then you might be in for some tough time. Creditors and debt collectors can resort to legal actions wherein they can file summons with the court so as to make a debtor answerable in the court, often with the intention to get a garnishment. (more…)
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How Long Do I Have to Wait To File For Bankruptcy Again?
One of the most powerful legal tools to ward of bad financial situation is bankruptcy. While filing for bankruptcy, you can get rid of huge amounts of debts thereby overcoming financial distress. However, one of the most popular misconception that people have is that if they have filed for bankruptcy once, they cannot file again. Well, lawyers of Sacramento based law firm Recovery Law Group, say that nothing could be further from the truth! (more…)
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How Can Bankruptcy Help Me When I Owe More than the Worth of My House?
Due to bad financial conditions, people might find paying for even essential things like the mortgage, difficult. The situation could be worse for those, who had bought property when the rate was at the peaks as this has resulted in high mortgage payment for a property which is no longer worth as much. This situation is not uncommon, but all is not lost as Sacramento based law firm Recovery Law Group provides options for people who have a home which is worth less than what they are paying in mortgages. (more…)