Frequently Asked Questions

What is bankruptcy?

Bankruptcy is a choice that may help if you are facing serious financial problems. You may be able to cancel your debts, stop collection calls, and get a fresh financial start. Bankruptcy can help with some financial problems, but does not guarantee you will avoid financial problems in the future. If you choose bankruptcy, you should take advantage of the fresh start it offers and commit yourself to making careful financial decisions to avoid filing bankruptcy again!

 

Generally, how does filing for bankruptcy work?

Although the steps to filing bankruptcy are numerous, here is a general overview of the process that may help you understand some of the main steps in filing for Bankruptcy under Chapter 7 or 13:

  1. Meet with an experienced bankruptcy professional about your particular financial circumstances and your bankruptcy options.
  2. Attend mandatory pre-filing financial and credit counseling courses.
  3. Prepare and File official court Bankruptcy Petition with all relevant financial information. Await court issuance of an automatic stay order, absent any objections from creditors.
  4. Attend mandatory Meeting of Creditors with an assigned bankruptcy trustee to arrange payment plan or certify information contained in Petition.
  5. Make any required payments and await court processing of documents for discharge.

Please note, the individual steps to filing bankruptcy will depend on specific factors about your unique financial situation. For a consultation on your options and to learn how The Grande Law Firm can help you, please contact us at (310) 713-2334.

Do I need a lawyer to file for bankruptcy?

The bankruptcy law significantly changed in 2005, making it more difficult to file for bankruptcy protection. Although you are not legally required to have an attorney file for bankruptcy, consulting with an experienced bankruptcy attorney will help you fully understand your options and avoid potential pitfalls.

 

There are a number of bankruptcy preparer services that advertise that they can prepare and file your petition for you, however, they are prohibited from giving legal advice and they cannot represent you when a problem develops.

What are some of the effects of Bankruptcy?

While the effects of filing bankruptcy are numerous, here are a few worth noting:

  • Temporarily weakened credit:

A bankruptcy filing is seen as a negative action on your credit report and the bankruptcy filing itself will appear on your credit report for seven to 10 years. However, the overall effect your bankruptcy has on your credit diminishes as time passes and your more recent actions begin to fill up your credit report.

  • Difficulties getting loans:

Due to the effect a bankruptcy filing has on a person’s credit, qualifying for a loan tends to be very difficult in the months directly following bankruptcy.

  • Difficulties getting work:

These days, many employers conduct credit checks in addition to criminal background checks for potential employees. Unfortunately, it seems that some employers see a bankruptcy filing as a reason not to hire someone.

What types of debt are not dischargeable under bankruptcy?

Certain types of debts are NOT discharged in bankruptcy. The following debts are among the debts that generally may not be canceled by bankruptcy:

 

  • Alimony, maintenance or support for a spouse or child

Bankruptcy will not discharge court ordered child or spousal support payments. These debts, including any missed payments are not dischargeable through bankruptcy.

  • Student loans.

Typically, student loans are not dischargeable. However, you can ask the court to discharge the loans if you can prove that paying them is an “undue hardship.”

  • Money borrowed by fraud or false pretenses.

A creditor may try to prove in court during your bankruptcy case that you lied or defrauded them, so that your debt cannot be discharged.

  • Income taxes.

Taxes owed to the Internal Revenue Service and in California, the Franchise Tax Board, are generally not discharged in bankruptcy unless the taxes meet specific requirements.

  • Most criminal fines, penalties and restitution orders.

The exception includes tickets fines.