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Bankruptcy can end your legal obligation to pay back certain debts. It can stop a foreclosure on your home, your car's repossession, and the garnishment of your wages. It can stop a levy of your bank accounts, lawsuits against you, and other creditor collections. In some cases, bankruptcy can give you time to catch up on unpaid taxes and debts. This includes a mortgage or car loan. You can keep your property while you get current. Bankruptcy can also be used to remove certain liens from your property. It can also reduce the value of certain liens. It also allows you to challenge creditor claims that you dispute.
Dischargeable debts include credit cards, medical bills, and lease obligations. It can address civil judgments, personal loans, business debts, and income taxes. If the taxes cannot be discharged, it may still be possible to stop the accrual of interest and penalties.
Examples of debts not dischargeable are debts from fraud, spousal support, and child support. It includes court fines, restitution in criminal cases, some taxes, and most student loans.
Chapter 7 is a liquidation bankruptcy. A trustee is appointed over the case to sell any non-exempt assets of the debtor to pay creditors. In most cases, there are no non-exempt assets for the trustee to sell. Debtors can keep the most property by exempting it. This includes their homes, cars, clothing, and household goods, up to certain amounts. It also includes jewelry, retirement, and other property, up to specific allowed amounts. The filing immediately stops most creditor collection actions. This includes foreclosures, wage garnishments, repossessions, bank levies, and lawsuits. Judgment liens can be removed in some instances. Usually, a dischargeable debt is discharged within about 90 days of filing. Non-individuals like corporations cannot receive a discharge in Chapter 7. There are situations where Chapter 7 makes sense for such entities. It allows for the orderly liquidation of company assets and termination of operations. As a chapter 7 Bankruptcy Lawyer, the LAW OFFICES OF J. LUKE HENDRIX can provide quality assistance.
Chapter 13 is a reorganization bankruptcy for individuals, including sole proprietors. It allows the debtor to keep their property and avoid liquidation. It allows you to repay creditors a certain amount over a period of 3 to 5 years. It can stop most creditor collection actions. This includes foreclosures, repossessions, wage garnishments, bank levies, and lawsuits. The amount paid to creditors is determined on a case by case basis. Often the amount paid is only a percentage of the amount owed. After the payments are completed, the debtor receives a discharge of the balance. Chapter 13 is often used to help someone catch up on mortgage arrears, car payments, or taxes. This can be done over several years. This can enable the debtor to keep their home and avoid foreclosure and keep their car. You can also catch up on taxes while stopping the accrual of interest and penalties on the unpaid tax. Chapter 13 can also be used to remove a junior lien against your home or other property. It can also reduce the value of some liens, and remove judgment liens, in certain circumstances.
Chapter 11 is generally a reorganization bankruptcy for businesses. This includes corporations, limited liability companies, and limited partnerships. Individuals can also file Chapter 11. In Chapter 11, the business can keep its property and continue its business operations. The company obtains an immediate stay of most creditor collection actions. This includes foreclosures, repossessions, wage garnishments, bank levies, and lawsuits. It allows the debtor to create a plan for paying creditors over a certain period. The repayment period is often over several years. There is no set limit on how long the repayment period can be, and it depends on the circumstances of each case. The amount paid to creditors is determined on a case by case basis. Often it is only a percentage of the amount claimed. Even if all creditors do not approve of the plan, a business can force a creditor to accept the proposed terms. This is if specific requirements are satisfied. Chapter 11 can help a business catch up on rent or mortgage arrears, avoid evictions, and get out of a bad lease. It can remove certain liens or reduce the amount of the liens. It can help with high interest business loans. It can reduce interest rates on loans to a more manageable rate. You will be able to pay unpaid taxes over several years. It can stop costly litigation, restructure other obligations, and resolve disputed creditor claims.
In Chapter 7, a bankruptcy trustee determines whether you have any non-exempt assets. Non-exempt assets are those that can be sold for your creditors' benefit. In most cases, there are no non-exempt assets for the trustee to sell. The debtor can keep the most property by exempting it. This includes homes, cars, household goods, clothing, jewelry, retirement, and other property, up to certain amounts. In California, the exemption amounts are more generous to debtors than many other states. The homestead amount in California can cover $75,000 to $175,000 of equity in your home. This depends on your marital status, age, income, any disability, and other factors. If you don't need to protect home equity, you could take advantage of an alternative set of exemptions. In California, it includes a "wildcard" exemption, which allows you to protect up to $30,825 of property. in addition to any other exceptions that apply to the specific property. For example, if your car has $12,000 equity (car value minus loan amount), you could use California's car exemption. The current exemption is $5,850. If you apply $6,150 of the wildcard amount you can cover the balance of equity in your car. You can also use the wildcard to protect cash you are holding or funds you have deposited in bank accounts.
There are many things to consider when assessing what exemptions to claim. You must also analyze if you qualify for the exemption. It is important to discuss with a bankruptcy attorney how best to apply the exemptions.
A bankruptcy filing could stay on your credit report for 7 to 10 years. In most cases, you will receive credit offers shortly after filing bankruptcy. You can start rebuilding your credit after filing. It is important that you carefully review the terms of any credit offers to ensure they are right for you. Some may include higher than usual interest rates. They could require a deposit or other collateral to secure the credit. We help our clients take steps to begin rebuilding their credit. We also help our clients resolve any credit report discrepancies. We will ensure the report reflects the discharge of debts in their bankruptcy.
Regardless of the bankruptcy attorney, there is a court filing fee that must be paid at the time of the filing. The filing fee is $335 for Chapter 7; $310 for Chapter 13; and $1,717 for Chapter 11. Your attorney does not receive any part of these fees. For the attorney fee, the fee for Chapter 7 is generally less than the fee for Chapter 13. The fee for Chapter 11 is generally the highest.
J. Luke Hendrix offers free consultations to discuss your case and determine how best to help you. Our fees are competitive with other law firms. J. Luke Hendrix handles all aspects of your case. This includes preparing all filing documents and appearing at all required hearings. Mr. Hendrix is also available for as many phone and office meetings as are needed to help your case succeed. Hiring a bankruptcy attorney is an individual decision. You must have good communication with your attorney. He or she must also make you feel at ease. This will ensure you are well represented throughout the entire bankruptcy process. Call (951) 221-3721 for the LAW OFFICES OF J. LUKE HENDRIX.
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We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.
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J. Luke Hendrix is a bankruptcy attorney.