Bankruptcy Attorney and Debt Reduction Lawyer in Los Angeles
If you need to file bankruptcy in Southern California because you have too much debt, make sure you understand your options. A variety of debt settlement options are available to you, not just bankruptcy. Also, several types of bankruptcy are available for a person to choose from. Make sure to contact a bankruptcy attorney and debt reduction lawyer to help you through this tough financial process. A competent Bankruptcy Attorney will assess all of your options and help you to make the decision that is best for you and your family.
Here is some helpful information to keep in mind if you are considering filing for Bankruptcy Protection. In most cases, individuals and/or couples are faced with the question of whether to file Chapter 7 or Chapter 13 Bankruptcy. There are advantages and disadvantages to both and many individuals do not have the option of choosing which petition to file.
Differences Between Chapter 7 and Chapter 13 Bankruptcy
Chapter 7 bankruptcy is the type of bankruptcy that most people know about (straight bankruptcy). Once approved, it erases all of your unpaid credit card debt, medical bills and most other types of unsecured debt. There is a common misconception that income taxes do not get discharged, this is not true. If the taxes are more than three years old, there is a strong probability that they will get discharged through bankruptcy as well. A successful Chapter 7 Bankruptcy petition releases your personal obligation to most debts including your first and second mortgage debts. This does not mean that you keep the property without continuing to make payments, but it does mean that the bank cannot come after you personally for any deficiencies or mortgage debts. The moment that a Chapter 7 Bankruptcy is filed, all collection efforts against the debtor including lawsuits and wage garnishments, immediately stop.
Contact our Los Angeles Bankruptcy attorneys if you have any further questions as to whether you qualify or whether a Chapter 7 bankruptcy is a good choice for you and your family. To be eligible for a Chapter 7 Bankruptcy, the debtor needs to make below a certain amount in gross income and must not have filed for Chapter 7 Bankruptcy within the last 8 years.
As compared with a Chapter 7 Bankruptcy, where most of the debts are wiped out, a Chapter 13 bankruptcy does not erase your debt, but puts your debt into a more manageable form. This is done through a plan whereby the debtor is basically required to pay his/her disposable income at the end of each payment plan cycle. Disposable income is basically the income that the debtor has left after paying his/her rent or mortgage, food, car payments and other living necessities. The debtor would be required to allocate his disposable income for a period of three or five years (depending on their income). At the end of that period, most of debtor’s unsecured debt would be discharged (forgiven). A Chapter 13 Bankruptcy is usually recommended for those who either do not qualify for a Chapter 7 Bankruptcy (make above the required income bracket) or those who own more assets than is allowed for the state exemption purposes.
For more detailed definitions for Chapter 7 and 13 Bankruptcy, see below.
Second Home Mortgage
If you are able to pay your mortgage and are worried about other bills, like credit card debt, you may want to apply for a second home mortgage. You can use the funds from your second mortgage to pay off your credit cards. Just make sure that you have enough money to pay the new second mortgage back. A lot of people get into more financial trouble when they take out second mortgages, so consider this option with care. You do not want to end up in worse position and create even more debt that you cannot pay off.
Chapter 7 Bankruptcy Lawyer
If you are looking for a great bankruptcy lawyer who can provide you with an affordable bankruptcy, look no further than the affordable bankruptcy lawyers at Law22. Our Bankruptcy Attorneys are skilled at walking you through your finances and explaining the options that are available for you. From there you can make the educated decision as to what path you would like to take. In fact, the attorneys at Law22 insist on conducting a comprehensive evaluation of their client’s financial situation, before offering any recommendations on whether or not Bankruptcy is the best option. At Law22, you will find all the help you need to start getting your finances back on track.
Yes, a bankruptcy will lower your credit score, but the affect will only last for seven years. Bankruptcy will not follow you around for life. Many people find that a Chapter 7 Bankruptcy is the first step toward a fresh start. A Bankruptcy lawyer will help you to once again take control of your finances with professional counsel and guidance.
Bankruptcy lawyers at Law22 truly have your best interest at heart and want to make sure that you can afford to live a happy and comfortable life. To start living life without constantly worrying about all your debts, take charge now by contacting a Bankruptcy Attorney who you can trust and afford.
Chapter 7 Bankruptcy, otherwise known as total liquidation, virtually erases all unsecured debts incurred by a person with the exception of student loans, government debt, child support debt, and a number of other debts. The obvious debts expunged (or removed entirely) by a Chapter 7 filing include credit card debt, health care debt, and other common consumer debts. Among other things, in order to qualify for this Chapter, the debtor’s household income needs to be below their state’s median income. If their income exceeds the state’s median, then the debtor has to demonstrate that his/her expenses exceed his/her income, or in other words do not allow him to make any payments towards his unsecured debts. In general, individuals filing under Chapter 7 can keep their house, a car, and other personal assets worth up to a certain value.
Individuals who earn above the state’s median, or have assets worth more than what is allowed under Chapter 7, generally choose to file a Chapter 13 Bankruptcy. Although the mechanics of this filing may be complicated, the basic idea is that the debtor’s debt is put into a plan under which the debtor makes monthly payments for a period of three or five years, at the end of that period, the debtor’s unsecured debt gets discharged. Besides allowing debtors to keep all of their assets, another benefit of filing a Chapter 13 is that, in many situations, it rids the debtor of the second mortgage debt on his or her property.
Let’s say you want to buy a house but can’t afford it. So you take out a loan from the bank. This agreement between you and the bank is called a mortgage or deed of trust. The mortgage agreement is secured by a “lien on the house” or secured by any other property you own and you choose to use as “security” or “collateral”. You buy the house, move in and begin living in the house.
Then you lose your job or something happens that prevents you from making your minimum loan payments to the bank. You stop making payments on the house which causes you to default on your mortgage loan. This is considered a “default in payment of a promissory note” and a “violation of the mortgage”. The lender, which is the bank in this case, can come after your property listed as your collateral in the mortgage agreement in order to get its money back.
But you may still have the chance to repay the debt even after a default. The courts of equity can grant you, as the borrower, a chance to repay the debt (“equitable right of redemption”). This equitable right places a cloud on the title and the lender (bank) cannot be sure that it can successfully repossess the property.
That’s when the foreclosure process becomes critical for the lender (the bank). Through the process of foreclosure, the lender seeks the legal and equitable title of the house (equitable right of redemption) to forcefully sell your house (or whatever you used as collateral) in order to make up for the money that you have not paid to them. Other lien holders can also foreclose your, the owner’s, right of redemption, in order to collect money for other debts, such as for overdue taxes, unpaid contractors’ bills or overdue homeowners’ association dues or assessments.
Knowing your options and having the ability to make educated decisions about your finances is critical. If you would like to discuss these options further, contact the Bankruptcy lawyers at Law22. Take charge now by contacting a Bankruptcy Attorney who you can trust and afford.