Bankruptcy Attorneys Serving Clients Across Murrieta, Temecula & Menifee, CA
How Do I Know If I Qualify for Chapter 7 or Chapter 13 bankruptcy?
When you begin to decide whether bankruptcy is right for you or your business, there are a few things to consider and discuss with trusted bankruptcy attorneys. Firstly, there are several kinds of bankruptcies and most people qualify for one or the other. To decide if you qualify, the court looks at two income tests. First they consider how much your actual expenses are compared to your net income. Second, they look at how your gross income compares to people with similarly sized families. If you have just enough income to meet all your necessary expenses, but enough to pay your unsecured debts, such as credit cards, without much left over, you probably can do a Chapter 7. If you have money left over, a Chapter 13 may be the ticket for you. A chapter 13 allows you to pay back your debt, or a portion of your debt if you can’t pay it all, over three to five years. The unsecured debt is paid at no interest in a Chapter 13 which can make a huge difference in how much it costs you to pay off your debts. At The Ashcraft Firm, our chapter 7 bankruptcy team can help you determine whether you qualify for bankruptcy and which bankruptcy best serves your needs. To learn more about the process, we welcome you to contact our office to schedule a free consultation. Our team of bankruptcy attorneys is proud to serve clients throughout Murrieta, Temecula, Poway and Menifee, CA.
What does bankruptcy do to my credit score?
So many people are concerned whether they will be able to get new credit after they file bankruptcy. My personal observation is that most people can obtain credit cards in a very short time after their bankruptcy is discharged. They can usually finance a car the day after they receive their discharge. Admittedly, the interest rates on such cars and cards will be higher in the early period after a discharge, but the credit is usually available.
Credit scores can either go up or down as a result of filing bankruptcy. If you have a very good credit score prior to filing bankruptcy, you can expect to see your credit score decrease when you file. If your score was low before you filed bankruptcy, it will probably go up right after you get your bankruptcy discharge.
The credit report our office provides to our clients predicts how much change, either negative or positive, you can expect to see after filing bankruptcy.
What’s the difference between a Chapter 7 and a Chapter 13 Bankruptcy?
A chapter 7 is often called a “straight bankruptcy.” It does not involve a payment plan and is complete in about 4 months after the case is filed. Unsecured debts like medical bills, credit cards, and certain taxes can be wiped out in a Chapter 7.
In a Chapter 7, the client may not be able to keep some assets; however, in most instances, a Chapter 7 client gets to keep all of his or her assets. A knowledgeable lawyer will go over assets with his client and determine if there is a law that allows the client to protect each asset. It will be apparent before the case is filed whether there are assets that are at risk. Knowing that before the case is filed, allows the client to weigh whether the loss of the asset at risk outweighs the elimination of debts.
A chapter 13, on the other hand, is a pay-back plan. It is often used to save a house from foreclosure by giving the client 3 to 5 years to catch up delinquent payments. The amount paid back depends on how much the client is able to pay based on income, expenses, and other factors. Unlike the Chapter 7 trustee, the Chapter 13 trustee does not take assets to pay debts. Debts are paid from the client's income during the term of the Chapter 13 plan.
Can I keep my house in a bankruptcy?
We have practiced bankruptcy law in Riverside County for over 20 years, and cannot recall a Chapter 7 case where a client who wanted to keep their home was forced to give it up as a result of bankruptcy. The current exemption laws allow homeowners to keep up to a certain amount of equity in their homes. Our attorneys will determine if the equity in your home can be protected before filing your case.
Can I choose to keep one of my credit cards after bankruptcy?
The easy answer is, “no.” In most cases, credit cards will be canceled whether or not they are listed in bankruptcy schedules. Creditors have the ability to find out about filings based on your Social Security number, so they don’t need to be listed to be aware of the filing.
There is a possibility of keeping a credit card by reaffirming a debt during a bankruptcy. A reaffirmation is a written agreement in which a client agrees to pay a debt notwithstanding the bankruptcy filing. This can only be done if the creditor agrees to the reaffirmation and if the judge does not disapprove the reaffirmation based on his opinion that the client can’t afford to pay the credit card.
Can I keep my vehicle after a bankruptcy?
There are several factors that determine whether you can keep your car after bankruptcy. You have the right to keep a car if the payments are current and if you can afford the payments in the future. In that situation, the creditor cannot refuse to let you reaffirm the debt and keep the vehicle as long as you pay for it.
A competent lawyer will be able to determine whether you have a vehicle that cannot be fully protected and give you strategies to keep the vehicle anyway. If you decide to surrender an unprotected vehicle to the trustee, he will return any amounts that you have “exempted” in your petition. An exemption is a law that allows you to keep equity in specified assets.
Which is better: debt consolidation or bankruptcy?
In most instances, bankruptcy gives you much more protection than a debt consolidation plan. Bankruptcy has the power of the federal court system. It also gives you a better opportunity to make a fresh start. Both debt consolidation and bankruptcy have about the same effect on your credit score initially, but over time the bankruptcy will usually win out when it comes to the credit rating. The reason this happens is that bankruptcy wipes out your debt, while the debt consolidation does not. Also, most people fall out of debt consolidation plans because they are unreasonable amounts and then you end up not resolving your debt problems in the first place.
What bankruptcy clients do we serve beyond Murrieta and Temecula, California?
We serve clients that reside in all of Riverside County as well as Los Angeles County, San Bernardino County, and Orange County. These are all counties that are in the same Federal Court District so they have the same local rules and little or no variation in the court procedures that govern their bankruptcy code.
Does The Ashcraft Firm do Free Bankruptcies or Pro-Bono Bankruptcies?
If you think about it, everybody filing bankruptcy is basically broke. I don’t know of any bankruptcy attorneys in the area or beyond that actually will file your case for free. However, we offer our services with no money down when they qualify, or with payment plans if they do not, so that people can get their fresh start and begin the process of rebuilding their credit now.
Schedule Your Preliminary Consultation With Our Bankruptcy Attorneys
Once you decide to file for bankruptcy, there’s no substitute for reliable legal counsel. If you attempt to go this route on your own, you’ll be forced to deal with mounds of complex paperwork. Thankfully, the experienced team at The Ashcraft Firm is constantly standing by to provide support. We’ll remain by your side throughout each phase of the filing process to ensure a bright financial future. Even if you’re not sure if bankruptcy is right for you, our team will provide the necessary information to make a smart decision.
All you have to do is contact one of our knowledgeable representatives to get the ball rolling. Schedule your preliminary consultation with our bankruptcy attorneys today! We’re proud to assist clients throughout the Murrieta, Temecula, and Menifee, CA communities.
Disclaimer
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Nothing contained herein should be considered legal advice.
Note: In accordance with Section 528(b)(2) of the United States Bankruptcy Code, readers of this message are advised that THE ASHCRAFT FIRM is a DEBT RELIEF AGENCY whose services may include helping people file for relief under the Bankruptcy Code.
IRS Circular 230 Disclosure: To ensure compliance with IRS’s requirements, please be advised that any tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.