BANKRUPTCY LAWYER ORANGE COUNTY
INFORMATION (DEBT RELIEF)
Overview
There are various kinds of Bankruptcies in Orange County and benefits for those seeking relief from debt with a bankruptcy lawyer in orange county. Debtors, however, often feel guilty or ashamed for filing of a Bankruptcy petition. This should not be the case. Professionals and giant corporations do the same thing. Getting a fresh start, free from the shackles of debt, is a tradition that has a long moral and legal standing. A Banruptcy Lawyer in Orange County can help.
In Deuteronomy (15:1-2), it is written that "At the end of every seven years you shall grant a release and this is the manner of the release: every creditor shall release what he has lent to his neighbor; he shall not exact it of his neighbor, his brother, because the Lord's release has been proclaimed." Hence, bankruptcy is forgiveness, available to us every six years!
Debtors' prisons are history. Today, federal laws afford the unfortunate a way to get a fresh start or a breather to reorganize. While not all debts are dischargeable, the great majority is. If a debt is discharged, you do not have to pay it at all!
Dischargeability
Examples of debts you will probably have to pay are U.S.-guaranteed student loans (there are exceptions) and child support. Such debt is called "non-dischargeable." A secured portion of a home or automobile loan is non-dischargeable. Generally, you must continue to make payments on the secured debt or return the security (the car, etc.) The unsecured portion of the loan is dischargeable.
On the other hand, all credit card debts or signature loans, without any collateral, are normally dischargeable. The determination of dischargeability is a legal issue and should be evaluated on a case-by-case basis by an experienced bankruptcy attorney.
For example, your income taxes, assessed over three years ago may be dischargeable depending upon the facts of your case. An employer's employment taxes are usually non-dischargeable. Bankruptcy, however, can force the taxing authorities to accept a three to five year payment plan even though it has demanded immediate payment before the bankruptcy. We offer you a free consultation with a bankruptcy attorney. This will give you a better idea about whether or not your debt problem will be solved by filing for bankruptcy or debt reorganization. Because bankruptcy will show on your credit report and will make it difficult for you to obtain credit from some lenders, a bankruptcy attorney can provide additional consultation on re-establishing your credit.
Will you have to give up your house or car when you file bankruptcy? Typically no, for example, a debtor may keep his/her residence, with a homestead, which is $50,000 for single debtors, and $75,000 for married debtors. There are many categories of exempt properties including life insurance, disability and health insurance benefits, pensions etc. The key is to fill out the bankruptcy papers correctly, to ensure that the exemptions are properly claimed. Many individual debtors take advantage of laws which allow them to keep most or all of the property they own. The more you own of value, the greater the chance that some of your property will be taken by the Bankruptcy Trustee and sold to pay off your creditors. Our bankruptcy attorney will be able to evaluate your case and advise you regarding what property can be protected.
The minute you file a bankruptcy under any chapter, all of civil lawsuits, collection actions, threatening phone calls and letters, wage garnishments, levies, evictions, and foreclosures against you come to an immediate halt. This federal protective order is referred to as the "AUTOMATIC STAY." Any creditor continuing collection action against you is breaking the law and will be forced to stop.
Differences in Bankruptcy Laws
For some debtors, Chapter 7 is not as advisable as Chapter 13, debt reorganization. Chapter 13 is an alternative to Chapter 7.
In Chapter 13, a debtor has the same protection under the AUTOMATIC STAY as a Chapter 7 debtor. However, a Chapter 13 debtor must file a repayment plan within 15 days after filing the petition. A debtor can pay from 1 to 100% of total unsecured debts (depending on disposable income), without any interest. For pre-petition secured debts (like a mortgage,) however, debtor has to pay 100% plus 12% interest. The plan is reviewed by the Trustee and must be approved by the judge. Chapter 13 is only available to Individuals (not corporations) having a regular income and with debts not exceeding $1,000,000 ($250,000 in unsecured debts and $750,000 in secured debts).
Chapter 11 is the reorganization chapter, which is most commonly used by corporations or individuals that do not wish to file Chapter 7 and owe too much debt to qualify for Chapter 13. In Chapter 11, the creditors vote to accept or reject a proposed plan of reorganization. The Court must also approve the plan. An advantage of Chapter 11 is that you can delay payment of many pre-petition debts until a repayment plan is approved. Such approval may take more than six months after the case is filed. Chapter 11 is expensive and requires intensive re-porting and legal procedures.
Nevertheless, when a debtor is in business, faced with lawsuit or a large IRS levy, Chapter 11 might be a possible solution. Before a decision is made to undertake a Chapter 11 bankruptcy, the debtor should consult an attorney experienced in Chapter 11. Our attorney is available to consult with you regarding the advantages and possible disadvantages of filing under Chapter 11.
Please see the following flow-chart of Chapter 7 and Chapter 13 to give you a general idea regarding the procedure of bankruptcy and its timelines.
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If you need a fresh start and are considering Bankruptcy please contact one of our experienced Attorneys for a free consultation.
Mashney Law Offices is ready to help you. Please call us at (800) 555-6655 or submit an online case evaluation. This is a FREE CONSULTATION.
