Bankruptcy is a Tool for San Diego Area Families Looking to Start Anew

Seven years on from the economic crash of 2008, many San Diego area families are still struggling to cope with overwhelming debt and financial obligations. Layoffs, reduced work hours, hospital bills, and the lingering effects of the housing market crash are all factors that can leave one with one’s back to the wall financially. Fortunately, that law has put in place a mechanism to start fresh in terms of debt – bankruptcy. The purpose of the article is to provide San Diegans with information about bankruptcy.  Because there are many myths floating around about bankruptcy, it is important to educate oneself about the subject. For individuals considering bankruptcy, it is wise to speak with an experienced San Diego bankruptcy attorney.

Debunking Myths About Bankruptcy in California

Unfortunately, for individuals and families who might otherwise benefit from bankruptcy, there exists the preconception that one exits the process with zero assets. This is simply not true. In Chapter 7 Bankruptcy, for example, there are many exemptions allowing individuals to keep most, and in some cases all, of their belongings. To say that something is “exempt” from the bankruptcy process is to say that it is excluded from the process. The state of California realizes that it is difficult, if not impossible, to start fresh financially without a car, home, and furniture. As such, the state allows for generous real and property exemptions to ensure that Californians who elect to go through the bankruptcy process are in a genuine position to regroup and find their way to better financial days. Keeping certain real and property items exempt from creditors seeking to reach assets in bankruptcy court may not please creditors, but it does serve the public policy purpose of helping California individuals and families get the fresh financial start they need.

A second myth surrounding bankruptcy is that it is the tool of the weak – that bankruptcy is a way deadbeats and bums cheat the system. This myth – perpetuated by creditors – is simply not true. Sadly, it is this very stigma that prevents deserving California individuals and families from even exploring the possibility of getting the financial fresh start they need. The truth is that every year tens of thousands of people file for bankruptcy in San Diego County alone. These people are not deadbeats or bums – they are ordinary folks who have fallen on hard times financially. Like them, you should not feel that bankruptcy is somehow un-American. California law would not allow for bankruptcy if that was the case.

Finally, there is a misperception that bankruptcy is an arduous, endless process.  This, like the myths debunked above, is not true. Bankruptcy does not have to be difficult or painful. With the help of a skilled and experienced California bankruptcy attorney, Californians in need of a fresh financial start can smoothly navigate the procedures and paperwork required to file for bankruptcy. If you are in financial distress, don’t hesitate to contact a skilled and experienced San Diego bankruptcy attorney.

Chapter 7 Bankruptcy: The Basics

Today’s economic climate has caused many families and individuals to feel trapped by debt and struggling to make ends meet. Whether you have been laid off, accumulated medical debt, or accumulated credit card debt, debt can make life incredibly difficult and stressful. Bankruptcy may be an option for you to start fresh with your finances. Are you prepared to take control of your finances and free yourself from the harassment of debt collectors? If so, then filing a Chapter 7 Bankruptcy may be right for you.

A Chapter 7 Bankruptcy allows you to wipe out most debt and start fresh. This type of bankruptcy is a liquidation of your assets by a trustee. The trustee then sells all of your non-exempt assets. The proceeds of the liquidation are distributed to your creditors in satisfaction of your debt. The trustee will take a commission for overseeing the liquidation and asset distribution. Certain debts are classified as non-dischargeable. This type of debt includes student loans, fraudulent debts, alimony, child support, any fines for legal violations, tax debts, debt for personal injury or death caused by driving under the influence of alcohol or controlled substance, or any debt you forget to list in your bankruptcy filing. You will be responsible for paying these debts in full.

The filing of a Chapter 7 Bankruptcy does not require you to surrender all of your assets. Generally, you may keep your home, car, clothing, furniture, employer retirement plans, etc. An experienced attorney can help you determine which assets you must turn over and which you may keep.

If you plan to file a Chapter 7 bankruptcy, you must pass the California means test. This test applies to higher income bankruptcy filers, which means that if your income is below the required median, you will be exempt from this test. Other exemptions from the California means test include those whose debts are primarily consumer and disabled veterans who incurred debt while actively serving in the military. In order to be exempt from the means test, for example, an individual in a one-person household must have an income below $47,798.00.

The basic process of filing a Chapter 7 Bankruptcy is fairly straightforward and consistent. First, you must complete a bankruptcy petition, provide all necessary documentation, and complete a credit counseling course. After these initial requirements, you can then file a Chapter 7 bankruptcy. Approximately one month after filing for a Chapter 7, a Meeting of Creditors is held, where a trustee is appointed. Prior to the conclusion of your bankruptcy proceedings, you must also take a second course in financial management. After the Meeting of Creditors, unless there are any outstanding problems with your filing, no further action will be required from you. Approximately two months following the Meeting of Creditors, you can expect a court order discharging your debt.

Contact an Experienced Attorney

If you are considering Chapter 7 Bankruptcy as a means to rid yourself of crippling debt and get a financial fresh start, the first step is to consult an attorney to ensure this is the correct path for you. The knowledgeable attorneys at the Leslie Legal Group are here to help guide you through every step of the bankruptcy filing process. Contact us today for a consultation.

A little talk about Chapter 7 Bankruptcy in San Diego

Let’s talk a little bit about bankruptcy. In today’s economy, it is extremely easy to get consumed in debt, and more and more individuals are resorting to bankruptcy for a second chance at financial freedom. If you don’t fully understand or know what the term bankruptcy means, it can be described as a monetary “clean slate” – hitting the reset button on life. slide4-new

Before making the decision to actually file for bankruptcy assistance, those considering it should think long and hard about whether they actually need to do it. The process isn’t to be taken lightly and can only be repeated once every eight years, and remains on your credit history for seven to ten years, thus making it important to weigh the decision carefully. Chapter 7 bankruptcy, the “cookie-cutter” version of it, is the most common type and is a relatively simple and effective process to get started. The actual process generally takes only a few months to complete, essentially wiping out some of society’s most crippling of debts. However, it is important to note that not all debts are forgiven through bankruptcy, as there are some which are nearly inescapable. The process is effective at releasing the tension and suffocation from unsecured debts such as credit cards, medical bills, etc. – but does NOT generally render the debtor exempt from obligations such as child support, student loans, taxes, or criminal restitution (although there are circumstances in which some of these may be discharged). Someone who is considering filing for bankruptcy often fits a familiar scenario – an individual who may already be suffering from financial hardship and excessive amounts of debt then encounters an added problem such as unemployment, divorce, injury, loss of insurance, etc. The law defining bankruptcy was designed originally to help people in such circumstances, providing an opportunity to live their lives again without the burden of debt and collection agencies hounding their every move. In the state of California, even before filing bankruptcy, it is possible for a person to protect their assets from being taken away. Under the Exemption Laws of California, it is possible to be “judgement-proof,” preventing unsecured creditors from taking claim of your belongings. although this may not be the best long-term solution. It is even possible to cease their harassing phone calls and letters by contacting the creditors directly, although you must be careful when doing so as offering to pay the debt, or even acknowledging that it is your debt and your intent to pay it can have drastic and negative effects. If you have been experiencing paralyzing financial difficulty and feel as if one of these options may benefit you, make sure to talk to a California bankruptcy lawyer to get some answers and find out what the best option is for you; your financial freedom awaits!