Our economy is built upon consuming goods and services. We are often encouraged to purchase with credit that for which we cannot afford to pay for with cash. If, because of sickness, a job layoff, or just poor economic and estate planning, you no longer can afford to pay off your consumer debt, you might consider hiring an attorney in order to file for Chapter 7 Bankruptcy in order to obtain a fresh start for your personal finances. In a time when billion-dollar financial bailouts are being extended to prominent banking institutions, giant insurance carriers and well established automobile makers, you deserve to obtain your own personal financial relief.
Iowa Bankruptcy Lawyer, Massachusetts Bankruptcy Lawyer, File Bankruptcy,
In order to qualify for a Chapter 7 Bankruptcy, a debtor must meet certain eligibility requirements. First, a debtor may file for Chapter 7 Bankruptcy only once every eight years. Second, the debtor must pass the "Means Test" prior to qualifying for a Chapter 7 filing. As a general rule, the debtor's average monthly income during the six months period preceding the filing should not be higher than California's median income. If the debtor's average income is more than the median, he may not be able to file for Chapter 7 Bankruptcy if his disposable income would allow him to pay off his creditors a certain sum of money over a fixed period of time.
Chapter 7 Bankruptcy takes about three months to complete. Prior to petitioning for Bankruptcy, many candidates will consult an attorney and most filers will be required to consult a nonprofit credit counseling agency. The reasoning behind credit counseling is to figure out whether you can utilize other options for debt management. Once credit counseling is complete, your attorney will file the Voluntary Petition with the court requesting a discharge of debts. After this Petition is filed with the court, the court enters an Order for Relief, commonly known as, the Automatic Stay, which obligates all creditors and collection agencies to stop all collection efforts. This means that most creditors must immediately stop any forms of harassment, terminate their demands for repayment of debt, and halt their threats of pursuing legal action against the debtor.
Filing for chapter 7 bankruptcy also means that the debtor is placing all his debts and assets, including those assets held in living trust, in the hands of the bankruptcy estate. The bankruptcy court controls these debts and assets by assigning a trustee to manage each chapter 7 bankruptcy case. The trustee's role is to obtain money from the debtor's Bankruptcy estate for the benefit of unsecured creditors. However, in most cases, the trustee cannot touch the property which is considered exempt. Exempt property is the property a debtor can retain during and subsequent to Bankruptcy. Your attorney will be able to determine in advance what assets are likely to be exempt.
California has created its own individual exemption system. There are two different sets of state exemptions which California uses in the Bankruptcy process. These are the standard California exemptions and the alternative California exemptions. The later, with a few important deviations, are quite similar to the federal exemptions, which for the most part are not available for use in California. A debtor filing for Bankruptcy in California must satisfy the two year residency requirement in order to use California's exemption system. Generally speaking, a debtor can exempt both real and personal property owned by him, although most exemptions have a cap amount which is continuously updated by the California Judicial Council. One of the most important exemptions offered is the homestead exemption which allows a debtor to retain the equity he amassed in his home. Preparation of a California homestead exemption by a qualified estate planning attorney allows a debtor to retain between $50,000.00 and $150,000.00 worth of equity in his primary residence when declaring a chapter 7 Bankruptcy. In today's California real estate market, property values are fast declining. This means that many debtors who were effectively precluded from filing for Chapter 7 Bankruptcy during the housing bubble, due to significant equity in their homes, are now free to discharge their debts in Chapter 7 Bankruptcy, and retain their homes.
When filing for Chapter 7 Bankruptcy, a debtor must choose either the standard or the alternative set of the California's State exemptions, and cannot pick and choose between exemptions contained in both systems. Your bankruptcy attorney will point out that in many cases even if the debtor has property that is worth more than the exemption amount allows, the bankruptcy trustee may still not want to deal with that property, if the trustee sees that little money can be recovered from taking the asset. In such a case, the trustee is likely to abandon the property, and the debtor will be able to retain it. For the most part, such abandoned nonexempt property can be retained by the debtor through redemption, which simply means offering the creditor a lump sum payment equal to the property's current replacement value. Redemption eliminates all liens on the property. Another alternative available to the debtor is to reaffirm the debt and keep paying for the property. When a debtor reaffirms a debt, both the creditor's lien on the property and the debtor's personal liability under the reaffirmation agreement survive Bankruptcy.
Finally, it is important to note that in some instances a debtor may be able to eliminate or reduce certain liens attached to his exempt property. This procedure is known as lien avoidance. How much of a lien can be eliminated depends on the value of the property and the amount of the available exemption. However, not all liens can be wiped out. For instance, the remedy of lien avoidance cannot be used for home equity loans or second mortgages if a debtor files for Chapter 7 Bankruptcy, but might be available if he files for Chapter 13 Bankruptcy, and strips off his second mortgage, treating it as an unsecured debt in the Chapter 13 plan. It is always best to consult with an experienced Bankruptcy attorney prior to filing for Bankruptcy, so that you can get a better understanding of your legal rights and options.
Orange County Bankruptcy Attorneys
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
Rating of Orange County Bankruptcy Attorneys
Get Online Application at online Bankruptcy Lawyer.
0 comments:
Post a Comment