What is an automatic stay?
The minute the petitioner files either a Chapter 7 or Chapter 13 bankruptcy, a court ordered “automatic stay” goes into effect. The automatic stay prohibits most creditors from taking any action to collect debts owed them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections. The automatic stay prohibits garnishments of wages, levies against bank account, repossessions of cars and other vehicles and foreclosures.
May married people file alone?
There is no requirement that married couples file bankruptcy together. If one spouse has no substantial debt and good credit there is no reason for that spouse to file bankruptcy. There is no impact on the non-filing spouse’s credit score.
How do I know if I qualify for a Chapter 7 Bankruptcy?
To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. For an individual to qualify, you must make less than the median income for the State of California based on the number of members in your family and your average gross monthly income for the last full six months. If your income is above this median level, it does not necessarily mean that you will not be able to file for Chapter 7 bankruptcy. In that case, you will need to pass a Means Test to determine if you can qualify. The debtor must subtract certain allowed expenses as well as the outstanding debt that is owed from their current monthly income. If the remaining figure is below a certain value, then you pass the Means Test and are able to qualify to file Chapter 7.
What is an Emergency Bankruptcy?
The bankruptcy court allows an abbreviated version of the petition filed thereby providing the debtor an “automatic stay” very quickly. This shortened version is comprised of three pages of the petition, whereas a regular filing will eventually reach over 50 pages. An experienced attorney can prepare and file the shortened version with the court, electronically, in a matter of hours. The remainder of the petition, called a “deficiency filing”, is filed two weeks later. This procedure is highly useful to a debtor if, for example, he or she is about to have their salary garnished or home foreclosed the next day or even the same day of the filing providing the filing is done early that day, allowing our office time to notice the affected parties immediately following the emergency bankruptcy filing.
How will bankruptcy affect my credit?
A Chapter 7 bankruptcy filing will stay on your credit report for up to ten years and seven for Chapter 13. However, this does not mean that you will not be able to improve your credit score and qualify for credit and even home loans. Obviously, consideration for extending credit despite low credit scores depends on the person’s length of employment and income to name just a few considerations normally made on all credit applications. Credit issuers know that after you file for Chapter 7 protection, you have no debt and you can’t file for bankruptcy for eight more years, making you a good candidate as a customer. As you begin to receive credit, your FICA score will keep climbing as long as you keep your credit clean by making all your payments on time.
May I keep my credit cards?
If at the time of filing your bankruptcy petition, you have credit cards with a zero balance, those cards do not have to be listed in your petition. You may keep these credit cards so long as the credit card company allows you to retain their card.
Will filing for bankruptcy affect my job?
No. The Bankruptcy Code prohibits employers from considering a bankruptcy in making employment decisions, even if a debt to the employer is discharged.
Will bankruptcy affect my ability to get a student loan?
No. The Bankruptcy Code prohibits lenders from considering a bankruptcy in making decisions on applications for federally guaranteed student loans, even if a debt to the lender was discharged.
Will bankruptcy affect my ability to rent an apartment?
During the pendency of the bankruptcy, many landlords will not rent to you. However, after you receive your discharge, you will find that many more will be willing to rent to you, particularly if the vacancy rate is high. Your best chance is to apply at smaller properties managed directly by the owner, who may rely more on his or her personal impression of you, relying more on good references you may have in hand from previous landlords.
What property may I keep if I file for bankruptcy?
You are allowed to keep certain property under the concept of “exemptions“. California has two sets of exemptions your attorney can choose from but you cannot pick and choose from each set. One set of exemptions allows to you to protect equity up to a certain amount depending on your age, marital status and property ownership. The other set of exemptions allows you to protect certain assets and includes a “Wild Card” exemption which allows you to protect any personal asset up to a net value of $23,250.
What debts can I eliminate through bankruptcy?
All debts are generally dischargeable except the following:
- sales and employment taxes.
- income taxes, unless
- the tax return was due three years ago.
- the tax return was filed two years ago. and
- the taxes were assessed at least eight months ago.
- alimony, child support, and most marital property settlements.
- debts incurred through fraud, embezzlement, or intentional injury, including credit card charges made without the intent of paying them.
- student loans, unless the court determines that requiring payment would create an undue hardship.
- debts for death or personal injury incurred through driving while under the influence of alcohol or drugs.
- debts incurred to pay non-dischargeable taxes.
- fines and penalties payable to a governmental unit.
- criminal restitution obligations.
How soon after I file for bankruptcy may I file another?
A person may file a file a chapter 7 case every eight years from the date you filed the prior Chapter 7. If you have previously filed a Chapter 7 case, you must wait four years from the date the Chapter 7 was filed before a Chapter 13 can be filed. You can file another Chapter 13 as long as you received a discharge under Chapter 13 more than two years previous. If you have previously filed a Chapter 13 case, you must wait six years from the date the Chapter 13 was filed before a Chapter 7 can be filed.
Will bankruptcy affect my immigration status?
As long as you are in the United States legally, a bankruptcy will not affect your immigration status. You must have a valid social security number when you file for a bankruptcy