Bankruptcy can be a scary and daunting process. If you’re filing for bankruptcy in California, it’s best to seek bankruptcy services from a trusted Pasadena bankruptcy law firm who can walk you through the entire bankruptcy process and make sure that everything goes well in your filing.
At the Law Office of Daniela Romero, APLC, we understand that bankruptcy is a difficult decision, which is why we want to help you through the process step-by-step and make it easy for you to get debt relief in California. We have a wealth of experience in the field, and our bankruptcy attorney in Pasadena, CA is dedicated to helping you file for bankruptcy as quickly and efficiently as possible. Fill out our form today to SCHEDULE A PHONE CONSULTATION and avail of our bankruptcy services today!
What is The Pasadena Bankruptcy Process
Bear in mind that those declaring bankruptcy in the Pasadena Area will be required to appear at a Federal Bankruptcy Court hearing. By choosing our law office, you can rest assured that you will be represented by a qualified bankruptcy attorney. We are tenacious advocates for our clients and will not back down.
Our law firm alleviates our clients’ concerns about bankruptcy filing. If bankruptcy is something you must do, delayed filing will almost certainly result in increased financial losses. If you’re in need of debt relief assistance, contact us immediately to discuss your alternatives.
Is Bankruptcy the Answer to Your Debt Problems?
While bankruptcy is effective at erasing unsecured debt, you may have difficulty eliminating certain types of debt, including child support, alimony, the majority of tax debts, and school loans. If you want to keep your home or automobile, both of which are considered secured property and must be surrendered if you fall behind on payments, Chapter 13 is a better option. In contrast to Chapter 7, Chapter 13 provides a way for you to make up for missed payments.
Which Debts Will Be Forgiven in Chapter 7 and Chapter 13 Bankruptcy?
Chapter 7 bankruptcy eliminates the majority of your unsecured debts, such as credit card debt, medical expenses, utility payments, membership dues, and personal loans. (Chapter 4 discusses secured and unsecured obligations in greater detail.) Certain unsecured debts, on the other hand, cannot be discharged.
You repay some unsecured obligations in full (referred to as priority debts) and others in part in Chapter 13. (called dischargeable debts). Others, such as student loans, do not need full repayment throughout the plan’s duration, but you remain liable for the remaining sum when the plan concludes. Once your repayment plan is completed, the court will discharge any remaining balance on your dischargeable unsecured obligations.
What Debts Will Remain in Chapter 7 and Chapter 13 Bankruptcy?
The following debts will not be discharged in either Chapter 7 or Chapter 13 bankruptcy:
- Alimony and child support
- Student loans, unless there are extenuating conditions (see Chapter 11)
- The most recent tax debts
- Debts that you omitted to list in your bankruptcy filings, unless the creditors ask you to do so.
- debts for personal injury or death caused by your inebriated driving, as well as fines and penalties imposed for breaking the law, such as traffic tickets and criminal restitution (there is an exception in certain Chapter 7 cases)
Certain types of debts are dischargeable in Chapter 13 but not in Chapter 7, including marital debts resulting from a divorce or settlement agreement and HOA costs incurred after filing, to mention a few.
How Are Secured Debts Handled?
A bankruptcy discharge discharges debts, but not liens, save in a few limited circumstances. A lien is a property interest that entitles a creditor to seize the loan collateral if the obligation is not paid. Thus, if you have a secured obligation, such as a mortgage or car payment, bankruptcy will discharge the debt but will not prevent the creditor from repossessing the property if you default on payments. How it works is as follows.
If you’re current on your secured payment, you’ll almost certainly be able to keep the property if you file for Chapter 7 or 13, as long as you remain current in the future and can safeguard the equity with an exemption. If, on the other hand, you wish to eliminate your mortgage or auto payment under Chapter 7 or 13, you must surrender the house or car.
If you fall behind on a payment but wish to keep the collateral, you can catch up in Chapter 13 and keep the property if you have enough income. Chapter 7 bankruptcy does not include a way for you to make up for missed payments. Certain obligations are not dischargeable if a creditor successfully convinces the judge that the obligation should survive your bankruptcy.
These include debts incurred by fraud, such as falsifying information on a credit application, recent credit card charges for luxury items or cash advances, and debts generated as a result of your deliberate and malicious injury to another person or their property.
What is Chapter 13 Bankruptcy Capable of?
Chapter 13 bankruptcy may be more beneficial in certain circumstances than Chapter 7.
Permanently halt a home foreclosure.
While Chapter 7 bankruptcy may delay a foreclosure, it will not prevent it entirely. However, under Chapter 13, you can halt the foreclosure process, repay any missed payments through your plan, and continue making your regular mortgage payments.
Permit you to retain property that is not exempt.
You will surrender nonexempt property in Chapter 7 that the trustee will sell for the benefit of creditors. If you have nonexempt property that you really want to maintain and a stable source of income, Chapter 13 may be a better option because you can keep all of your assets.
Repay indebtedness that is not dischargeable.
If you owe debts that cannot be discharged in bankruptcy, such as child support or certain tax debts, you can use Chapter 13 to settle them over time. While a student loan is not dischargeable, you are not required to repay it in full via your plan. However, you will be required to settle all other non-dischargeable obligations in full.
“Cram down” secured debts that exceed the value of the collateral.
You can utilize Chapter 13 to reduce a debt (including, in some situations, a loan secured by your home) to its current retail value and then repay it through your plan. For instance, if you owe around $10,000 on a car loan but the automobile is only worth around $6,000, and you’ve owned it for at least 910 days, you can suggest a payment plan that pays the creditor about $6,000 via the plan. The remaining debt ($4,000 in this scenario) is consolidated with your unsecured property.
Tackle Bankruptcy with a Bankruptcy Attorney in Pasadena Today!
Concerned about how much it will cost to file bankruptcy? Nervous about how bankruptcy will affect your credit? Filing bankruptcy can be a stressful task. Whatever is holding you back, it is time to stop worrying and start taking control again. We can help you do just that, put you back in control of your financial future. So, request a free phone consultation now. You have nothing to lose and peace of mind to gain. We make bankruptcy filing affordable and help you to rebuild your credit for free. Start Now!