Los Angeles Bankruptcy Lawyers
Indebted consumers need accurate, timely information to help them think through their options. The fact is that it’s possible to find financial freedom, but you need a seasoned guide to help lead you there. At Wadhwani & Shanfeld, our Los Angeles bankruptcy lawyers have assisted more than 25,000 individuals and investors handle their debts. Bankruptcy is an excellent option for many people, and we answer some of the most common questions below.
Chapter 7 vs Chapter 13 Bankruptcy
Consumers with unsustainable debts have many questions about whether bankruptcy is the solution to their financial problems. For most, the two primary bankruptcy options are Chapter 7 and Chapter 13. Both are great at eliminating certain unsecured debts, like medical debt, credit cards, and personal loans. However, they are also quite different. As a distressed consumer, it is critical that you select the appropriate bankruptcy to maximize your financial wellbeing. Please contact Wadhwani & Shanfeld today to talk with our Los Angeles bankruptcy lawyer about your situation.
What Are the Differences Between Chapter 7 and Chapter 13?
Let’s look at key differences, which should help you identify which bankruptcy is appropriate for your needs.
First, you should consider if you qualify to file:
- You can only file Chapter 7 if your disposable income is sufficiently low, which you prove by passing a means test. Someone with below-average income or high expenses should qualify.
- If your disposable income is too high, then Chapter 13 might be your only option.
Second, you should consider whether you will lose assets. This is the tradeoff in bankruptcy: you can eliminate certain debts, but the trustee overseeing your case can liquidate your assets and give the proceeds to your creditors.
- In a Chapter 7, you will lose any non-exempt property. California has complicated lists of exemptions, but it’s possible to exempt substantial equity in your home.
- By contrast, in a Chapter 13, you will not lose any assets—but you will need to pay your creditors an amount that is equal to your non-exempt property.
Third, consider the speed.
- Chapter 7 is fast—you can typically discharge your debts in 4 months.
- With a Chapter 13, you will make monthly payments for 3 or 5 years. Only at the end of your payment plan can you eliminate remaining debts.
Also consider the impact on your credit profile.
- A Chapter 7 stays on for 10 years from the day you file.
- A Chapter 13 is on for 7 years.
If you are facing foreclosure, then filing for bankruptcy can immediately halt the process. However, a Chapter 13 gives you more time to catch up on past-due mortgage payments. You can pay them over several years. The same is true of unpaid child support or other family law obligations.
- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy
- Bankruptcy & Divorce
- Bankruptcy & Retirement
- Credit Card Debt
- Creditor Harassment
- Debt Relief
- Debt Settlement
- Financial Stress
- Foreclosure Protection
- Investment Property Foreclosure
- IRS Tax Debt
- Lawsuits & Judgments
- Loan Modification
- Means Test
- Medical Debt
- Personal Loan Debt
- Rebuilding Credit
- Second Mortgage
- Second Mortgage Debt
- Small Business Bankruptcy
- Student Loan Debt
- Student Loan Repayment
- Wage Garnishment
These are only some of the most important considerations. It is vital to meet with an experienced bankruptcy lawyer to discuss which option is best for you.
Myths about Bankruptcy
As Board-Certified debt specialists, we talk to many members of the public about their finances. We have heard many inaccurate statements about U.S. law, along with some persistent myths about bankruptcy. We feel compelled to provide the public with accurate information so that they can protect their rights. Call Wadhwani & Shanfeld to speak with a Los Angeles bankruptcy attorney at a convenient time.
Separating Fact from Fiction
Please take note if you have heard any of the following myths:
- Myth #1: You can eliminate all debts in bankruptcy. The truth is more complicated. A Chapter 7 bankruptcy will eliminate some debts, like unsecured credit card and personal loans. You can also eliminate medical debts. But you can’t easily wipe out student loans.
- Myth #2: You can handle your own bankruptcy without a lawyer’s help. While it’s true you can file for bankruptcy on your own, studies have shown that debtors who hire a lawyer are more likely to get their debt discharged. Someone without a lawyer might file in the wrong court, leave out important information, or choose the wrong bankruptcy to begin with.
- Myth #3: Your credit will never recover. To be sure, most people see their credit score tank. But it is possible to rebuild credit after bankruptcy. Many people get back to where they were of prudent credit use.
- Myth #4: You can pick and choose which debts to repay. The fact is that bankruptcy law exists to treat your creditors equally. You can’t pay off your sister for a personal loan and then turn around and file bankruptcy to eliminate other debts.
- Myth #5: Credit counseling is a better option than bankruptcy. Credit counseling is sometimes a better option. For example, your debts might be manageable if you tweak your budget, and the total amount you owe is small. With credit counseling, your counselor typically calls your creditors and negotiates a lower interest rate or reduced monthly payments. But when debts are too unwieldy, credit counseling merely delays the inevitable bankruptcy.
- Myth #6: You can eliminate child support and alimony payments. The bankruptcy code says flat out that family support obligations like these cannot be discharged.
- Myth #7: You will lose all your property if you file. Actually, some assets are exempt. A 401(k) account, for example, is 100% exempt. California has a complicated scheme of exemptions, so you should talk with a lawyer. In a Chapter 7, you might end up having the trustee sell some of your property. But there’s also a Chapter 13 bankruptcy, which is an option for many people. The trustee doesn’t sell any property and, at the end of a repayment plan, your unpaid debts are discharged.
These are only some of the most common myths. There are too many to list here.
Los Angeles Bankruptcy & Debt Settlement FAQs
If you are in over your head with credit card bills, mortgage payments, personal loans or other debts, you are likely stressed out over the situation, and rightly so. But a lot of worry and anxiety in this situation comes from not knowing your options or what you can expect to happen. Below, our Board-Certified bankruptcy specialists answer some of the questions we hear most often from individuals concerned about their finances, filing for bankruptcy, and what comes next. If you have other questions or are ready to take the reins and resolve the debt issues that have been plaguing you, call Wadhwani & Shanfeld for a complimentary consultation with our Los Angeles bankruptcy lawyers to get the information and answers you need. Call now to talk to an attorney now.
Will my employer find out I filed for bankruptcy?
Your employer will not automatically be notified if you file for bankruptcy. Unless you tell them, there is no reason they will find out about it, except in certain circumstances. For instance, your employer could find out about your bankruptcy in the following situations:
- If you owe your employer money for some reason, they are a creditor who will be notified of the bankruptcy.
- If your wages are currently being garnished to pay debts, a bankruptcy filing puts an automatic stay on that garnishment. Your employer will be notified about the stay and ordered to stop garnishing your wages, so they’ll find out about your bankruptcy that way.
- If you file a Chapter 13 bankruptcy, the repayment plan might include wage deductions to go toward the plan. This is for your benefit to help you stick to the plan, but your employer would become aware of the bankruptcy when ordered to make the deductions.
Even if your employer does find out you filed for bankruptcy, that fact should not get you fired or subject you to otherwise unfavorable job treatment. If you become the subject of some adverse job action after filing and think you are being unfairly treated, a labor and employment lawyer might be able to help you.
If you are applying for a new job and have a bankruptcy on your record, this fact will come to light if the employer runs a credit check. Government employers are not permitted to use a bankruptcy against you in making a hiring decision, but private employers are not prohibited from doing so.
Can I save my property if I file for bankruptcy?
Yes! One of the biggest worries we hear from people who have heard the word “liquidation” in connection with bankruptcy is the fear that all of their property will be seized and sold to pay their creditors as part of the bankruptcy process. Chapter 13 does not require you to relinquish any property at all, and in Chapter 7, the bankruptcy trustee can only take assets that are “non-exempt.” We work diligently through the entire list of available exemptions, and in almost every case we handle, our clients don’t lose any of their property as a result of filing for bankruptcy. They do lose most or all of their debt, though!
What happens to my mortgage loan if I file for bankruptcy?
Assuming your home is exempt, you can simply continue making your monthly payments in order to keep your home. In certain circumstances, it is beneficial to reaffirm your mortgage loan with your lender. Our attorneys will review all of your available options in relation to your mortgage loan.
Will I be able to keep my vehicle loan if I file for bankruptcy?
Yes! Assuming your vehicle is exempt, you will be able to keep your vehicle by continuing to make your payments. In a chapter 7 case, your lender may require you to reaffirm your vehicle loan in order to keep it. In certain circumstances you may be able to keep your vehicle loan without a reaffirmation. Our attorneys will review all of your available options in relation to your vehicle loan.
How much of my wages could get garnished by a creditor?
A creditor with a court order in hand can seek to garnish your wages to cover what you owe them. They can take a pretty big bite out of your wages, but there are limits. Under federal law, creditors cannot garnish more than 25% of your disposable income or the amount of your disposable income that is over 30 times the federal minimum wage. California provides even stronger consumer protections. Here, creditors are limited to 25% of your disposable income or half the amount of disposable income that is over 40 times the California minimum wage (or the local minimum wage if higher than the state minimum). It’s also possible to get an even bigger exemption in California based on a showing of need.
Filing for bankruptcy invokes an “automatic stay” on all debt collection, including wage garnishments. Wage garnishments stop as soon as you file for bankruptcy, and if the debt behind the garnishment is dischargeable, bankruptcy can make the garnishment go away for good.
What if I previously filed for bankruptcy and need to file again?
Although bankruptcy can be a great solution to get you out of present financial difficulties, it’s not uncommon that some people later find themselves back in financial trouble. You can only file a chapter 7 bankruptcy once every eight years. You can, however, file a chapter 13 immediately following a chapter 7 but would not be eligible for a discharge in the chapter 13 case unless you waited at least four years post-Chapter 7 to file the Chapter 13 case. After completing a Chapter 13 repayment plan, you would have to wait two years to file for Chapter 13 again or four years to file for Chapter 7.
How can I get a bankruptcy removed from my credit report?
Unfortunately, only the passage of time will take a bankruptcy off your credit report, despite any claims to the contrary from so-called “credit repair” companies. By law, a Chapter 13 bankruptcy stays on your credit report for seven years, while a Chapter 7 bankruptcy stays on your credit report for ten years. That said, many of our clients find themselves with significantly higher credit scores in as little as 6 to 12 after their bankuptcy discharge.
Which is better, bankruptcy or debt settlement?
A lot of factors go into answering that question, including the number of creditors you have and the amounts you owe, who your creditors are, your overall income and expenses, what kinds of property you own, and more.
We can answer that question for you after we have talked to you and learned about your personal situation. So call us now, and talk to an attorney now to answer your questions and address your concerns.
Our Board-Certified Specialists Have Helped More than 25,000 People!
At Wadhwani & Shanfeld, some of our clients reach out only after attempting to file for bankruptcy on their own or with the help of a divorce or criminal defense attorney. They find that their case is filed in the wrong court or that they can’t receive a discharge of their debt. We are happy to give them accurate, timely advice and to shepherd their cases through the bankruptcy court. Instead of relying on a paralegal or non-specialist attorney, please reach out to us today. Our Los Angeles bankruptcy specialist lawyer will review your finances and help you decide whether bankruptcy is right for you.
There are many benefits to hiring a seasoned bankruptcy lawyer in Los Angeles:
- We have detailed knowledge of the bankruptcy laws, which a non-specialist would not have. Bankruptcy law often changes, and your attorney should stay on top of recent developments in this area. For example, some general practice lawyers will tell you it’s “impossible” to discharge student loans. The truth is more complicated, and we can sometimes get a judge to discharge these debts if they are an undue burden on you.
- We can offer legal advice, which a paralegal or notary public is not qualified to do. There is no reason to file the wrong bankruptcy, which can only increase financial stress. Let us review your debt and finances and help you choose the right debt management option.
- We can help you avoid bankruptcy fraud. Fraud consists of making inaccurate statements in your court filings or running up debts in the months before filing for bankruptcy protection. We can help you avoid these errors, which means you can go through the process with peace of mind.
- We have handled all types of surprises. Many Chapter 7 bankruptcies are straightforward. However, in a few, some issues will arise which a non-specialist might not know how to handle. For example, a creditor could object to the discharge of a debt, or the trustee might try to seize property that you believe is exempt. Our Los Angeles bankruptcy lawyer can help protect your rights through the process.
- We can make nasty debt collectors disappear. Once we file for bankruptcy, an automatic stay prevents any creditor from taking a collection action. If they violate the stay, we can notify the bankruptcy court and seek sanctions. Even before you file, a creditor must work through your lawyer, which can provide immediate security and comfort to our clients.
These are some of the most important services we provide to our clients. There really is no reason to rely on a non-specialist when you can hire the go-to firm in Los Angeles at a reasonable price.
Contact Experienced Los Angeles Bankruptcy Lawyers Today
Wadhwani & Shanfeld has helped countless people like you eliminate debt and move forward with their lives. To learn more, call us to speak with our Los Angeles bankruptcy attorneys. We are available to answer your pressing questions about bankruptcy. Get the facts in a consultation and then decide whether we are the right firm for your needs.