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BankruptcyContra Costa/Solano/Marin/Alameda Bankruptcy AttorneyMost of us believe that bankruptcy just can’t happen to us. We’re responsible citizens, hold regular jobs or own our own businesses. Then the unimaginable happens! Something like the present mortgage meltdown. Or an injury that puts us out of work. Or an illness that devastates us financially. ABOUT FORECLOSURE Much interest in filing for bankruptcy is triggered by a foreclosure notice. Bankruptcy may provide a way to stay in your home if you can catch up on back payments. Whether this is a wise financial decision will depend on the current value of your home and your belief in the housing market’s recovery. An experienced attorney can guide you through your foreclosure and bankruptcy options. CHAPTER 7 Chapter 7 is the original form of “fresh-start” bankruptcy. But not everyone qualifies. For example, if your income is above the California median, you probably can’t file Chapter 7. The alternative is Chapter 13, which requires a repayment plan. Additionally, Chapter 7 does not cancel: Additionally, Chapter 7 does not cancel:
If your income is too high to qualify for a Chapter 7 bankruptcy, Chapter 13 is your remaining choice. This involves negotiating a repayment plan with each of your creditors. When you file, creditors must stop their harassing calls and any foreclosure actions, garnishments and repossessions are halted. Features of Chapter 13 include:
BANKRUPTCY MYTHS Myth: The 2005 Amendments make it impossible for many people to file. Fact: Creditors and debt collectors are making this statement and it is not true. Virtually everyone who needs bankruptcy relief is eligible for bankruptcy relief. The 2005 bankruptcy reform amendments do complicate the process. That is why you hire an experienced and qualified lawyer to assist you. Myth: It is expensive to file for bankruptcy. Fact: My firm never charges for an initial consultation either by phone or in person. And the cost of the bankruptcy will always be a small fraction of the total bills you are discharging. After we personally discuss your possible case, I will quote you a “flat fee price” which will include all normal services in a bankruptcy case. Until I know specific details about your case, I can’t quote an accurate legal fee, but virtually every bankruptcy case will include the following costs:
Myth: You must attempt a debt repayment plan with a credit counselor before you file. Fact: Under the 2005 bankruptcy amendments you must speak with an approved credit counselor before you can file for bankruptcy. You do not have to do anything they say, you just have to listen. Afterward you may proceed to file your bankruptcy case. While you may select your own approved counselor, if you contact my office we’ll arrange for you to use one of our approved vendors. Most of the counseling can be done on the internet or by telephone and it should take about 90 minutes. You should treat the counseling like the “defensive driving” course you take if you get a traffic ticket. You should understand that your credit counselor probably attended a short training course. Your bankruptcy attorney has been practicing law since 1989. Myth: People who file bankruptcy lose their property Fact: Most debtors do not lose any property. California has exceptionally generous exemptions. For that reason, the vast majority of all cases are administered as “No Asset” cases, meaning there are no assets to administer. Before you file, I will review all of your property and let you know if there is a chance you might lose an asset. But again, most people do not lose anything. Myth: People who file bankruptcy never get credit again Fact: For many of our clients, filing for bankruptcy is the first step toward credit recovery. Often our clients begin the process with poor credit scores. But after you file for bankruptcy, you don’t owe anyone any money and you can’t file for bankruptcy (for 8 Years),–YOU ARE THE BEST CREDIT RISK IN TOWN! Many creditors realize this fact and many of our clients receive offers for credit before their bankruptcy is even finished! If you have income credit will be available to you despite your bankruptcy. Myth: Only deadbeats file bankruptcy Fact: Most of my clients should have filed for bankruptcy months or even years before they call me. From my experience, people file for bankruptcy due to personal financial devastation often related to (i) divorce, (ii) illness, (iii) job loss, (iv) business failure. Poor financial planning is a distant fifth. I have never seen anyone who filed for bankruptcy simply because they decided that they would prefer not to pay their debts. Most debtors would do anything to avoid filing bankruptcy but they simply can’t catch-up due to high interest rates and late fees. But understand one thing – bankruptcy is as difficult as you make it on yourself. There is no one at the bankruptcy court whose job it is to berate you or call you a loser. The legal process is fairly simple and virtually everyone you meet will be courteous and respectful. Myth: Banks have lost a lot of money due to bankruptcy filings Fact: Credit card companies and drug dealers are not people you should to feel sorry for as they both expect to make enormous profits from your misery. Bank profits from credit cards are at an all time high. During the first quarter of quarter of 2006, during a period of very high consumer bankruptcies, Citigroup reported record net profits of $5.6 billion. One source reports that during the first quarter of 2003, 915 million credit card solicitations were delivered to consumers. Banks employ economists, actuaries, accountants, and lawyers – they understand more about your financial situation than you do. If the banks were truly suffering from bankruptcy losses, they would start exercising prudence in lending again instead of giving out credit cards like candy, even to children! The simple fact is that credit card companies know and expect that people will do anything to avoid filing for bankruptcy including borrowing from relatives, putting second mortgages on their houses, or borrowing from retirement. Like drug dealers, credit card companies encourage you to do something which you should not because they make money on your misery. Myth: Bankruptcy “costs” each American family an average of $400 a year Fact: This assumes that if people paid their credit card bills, the credit card companies would lower their fees. Since they are making record profits while charging interest rates close to 30% that is clearly not true. Credit card companies charge as much as they legally can with no consideration for what is fair. If more people paid their bills, the credit card companies would just keep the profits for themselves. Further, it assumes that people could and would pay their bills if they did not file bankruptcy. Credit card companies know that people who need to file bankruptcy do not have the ability to repay. If they did, they would. Even if they did not file bankruptcy they would not be able to pay their debts. Myth: There is a minimum amount of debt required to file bankruptcy Fact: Theoretically you could file bankruptcy even if you only have $500 in debt, although you would need to have your head examined, since it costs much more than that to file. But we have had clients with little or no income who have filed for amounts that would be very manageable for those with higher income. There is no minimum. Myth: I only have to list the debt I want to get rid of on my bankruptcy Fact: All debt must be listed, but you can reaffirm debt such as your home, car(s) and other secured loans. You can also simply make voluntary payments to family or medical providers if you wish. Myth: It is ok to charge up credit cards just before filing bankruptcy Fact: Debt acquired after you realize you cannot repay may have to be paid back even if filing bankruptcy. Myth: If you are married and file bankruptcy, your spouse must file too. Fact: Many married debtors file alone and the spouse is not affected. Unless both are on the debt, a single filing makes more sense. Free 30-minute initial consultation
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Attorney Hermin Dowe |
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The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Copyright © 2007 by Dowe Law (510) 233-7700. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement. |
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