In its most basic form, California bankruptcy law is a consumer protection law. It is a federal process which allows consumers to have their qualifying debts forgiven. The law recognizes that bad things sometimes happen to good people, and consumers sometimes simply do not have the ability to comply with creditor’s repayment demands. California bankruptcy laws are based on forgiveness rather than punishment. Bankruptcy does not seek to deter or regulate certain behavior as other laws do; it simply recognizes that there are sometimes circumstances beyond the consumer’s control which can only be addressed through the cancellation of debt.
For help with your California bankruptcy needs, contact a California bankruptcy lawyer today. We at The Law Offices of Sevag Nigoghosian strive to be the best bankruptcy attorneys in California.
Filing for bankruptcy puts into effect an automatic stay, which stops creditors from trying to collect any debt from you. The automatic stay immediately stops creditor phone calls, collection letters, wage garnishments, lawsuits, bank levies, and all other types of harassment, intimidation and scare tactics by creditors. Once a bankruptcy case is successfully completed, the consumer receives discharge information from the Bankruptcy Court. A Discharge is a legal release from debts. Creditors are left with no legal cause to contact you or pursue debts listed in the bankruptcy documents.
There are two common ways for the typical consumer to file for bankruptcy, Chapter 7 and Chapter 13. Chapter 7 is the most common type of bankruptcy. It allows a consumer to discharge debts completely through a relatively short process. Chapter 13 is a federal debt consolidation plan which allows you to rearrange your financial affairs and repay just a portion of your debts. In most cases, the idea is to allow you time to get back on your feet. We at The Law Offices of Sevag Nigoghosian hope that the information on our site has helped you in the choices you need to make. Don’t wait – start rebuilding your credit for a better future. Contact us today to work with bankruptcy attorneys in Southern California you can trust. Call us today for a free consultation.
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What is the automatic stay?
This is an injunction that goes into effect automatically upon the filing of a bankruptcy. It strictly prohibits the commencement or continuation of any acts to collect on a debt that arose prior to filing the bankruptcy. This includes enforcement of judgments, creating or perfecting liens, and many other actions. (It does not apply to collecting alimony maintenance and support).
Does the automatic stay always apply when a bankruptcy case is filed, and if so, for how long?
Generally, the automatic stay goes into effect immediately upon filing your case and against acts taken towards you personally until you receive your discharge. Stays against actions towards property you own may last longer or shorter depending on what happens to that property during your case (e.g. it is sold by the Trustee or not, etc.).
Is it too late to file bankruptcy if I’m being sued or already have a judgment against me?
No. It’s almost never too late to file bankruptcy. Assuming that it is a dischargeable debt (meaning one that isn’t incurred through fraud, or a domestic support obligation, or one of the others Congress has excluded from discharge), you can still get rid of the debt even if a creditor has filed a lawsuit against you and gotten a judgment. You can even get rid of the debt if they have a lien against your property (although the lien will remain against the property unless you are able to remove it during the bankruptcy proceeding).
Where does my case get filed?
Your case is filed in the District where you have resided or have your domicile (or for a business, its principal place of business) for the greater part of the 180 day period prior to the date your case is filed.
What does it mean to bankrupt or discharge a debt?
Many people refer to getting rid of their debts in bankruptcy as “bankrupting” the debt. They often ask “can I bankrupt this debt?” That is incorrect terminology. The legal term for this is “discharge”. What happens in bankruptcy (assuming you are successful) is that your legal obligation to pay on your debt will be discharged. Debts are never technically eliminated. They still exist after a bankruptcy, but you no longer have the legal obligation to pay on the ones that are discharged (or, bankrupted if you prefer).
What are exemptions?
Exemptions are protected allowances for the value in certain assets. For example, a homestead exemption protects the equity you have in your home, up to a certain value. All States have different exemption laws which protect the value in certain assets. You need to check with a qualified bankruptcy attorney regarding what exemptions you are entitled to when you file your case.
Can I pick and choose who to list in my bankruptcy case?
Absolutely not. I don’t know where people get this idea. You must list all your assets and all your debts in ANY chapter of bankruptcy. You may voluntarily repay anybody you want after your case is concluded (and you are required to repay any debts that are not discharged), but you are still required to list all your creditors.
Can I transfer assets out of my name into someone else’s before filing bankruptcy?
Not unless they are sold for “reasonably equivalent value”. Otherwise it can be recovered as a Fraudulent Transfer.
Can you be fired or denied employment because of a bankruptcy?
No. While an employer can usually find some reason to fire anyone, they cannot use bankruptcy as a basis for doing so. This is set forth in Section 525 of the Bankruptcy Code.
Can I remove liens against my property?
Yes. Under certain circumstances, judicial liens and “nonpossessory, nonpurchase-money security interests” may be removed if, based on the value of the asset and the amount of senior liens and encumbrances against it on the date your bankruptcy case is filed, the fixing of the lien causes it to “impair” an exemption to which you are entitled under State (or other applicable) law.
Are any and all debts dischargeable in a bankruptcy case?
No. There are many debts which Congress has excluded from discharge.
Can you be denied a student loan because you or your parents file bankruptcy?
No. Section 525 of the Bankruptcy Code prohibits discriminatory treatment by any governmental or other student loan program on the basis of filing a bankruptcy. In other words, a student loan agency cannot deny your loan application based on the filing, by you or anyone you know, of a bankruptcy.