Sacramento Bankruptcy Attorneys
The brilliant Sacramento Bankruptcy Attorneys at our trusted law firm possess vast experience in handling a wide variety of bankruptcy matters. Their expertise, as bankruptcy lawyers, includes the filing of Chapter 7 Bankruptcies, usually filed to eliminate credit card debt or medical bills, along with the filing of reorganization bankruptcies: Chapter 13 Bankruptcy and Chapter 11 Bankruptcy. These are generally filed to stop foreclosures and reorganize real estate or businesses.
“We are a debt relief agency. We help people file for
bankruptcy relief under the Bankruptcy Code.“
“The Sacramento Bankruptcy Attorneys at Eason & Tambornini did a great job handling my Chapter 7 Bankruptcy case . . . my hearing was the smoothest and quickest of the 10 cases I observed. This proved that they did a great job preparing my case for the hearing.” Sarah, a Sacramento Bankruptcy Attorney Client
Broadly speaking, there are two primary types of bankruptcies that our Sacramento Bankruptcy Attorneys handle: Chapter 7 (which is the cheapest and easiest to finalize) and the Reorganization Bankruptcies (Chapter 9, 11, 12, and 13), which provide debtors with an opportunity to make payments over a period of time. The Eastern District Bankruptcy Court (Sacramento Division) is the primary court where our Sacramento Bankruptcy Attorneys handle bankruptcy petitions, and that court serves the largest region in California, which includes those living in Sacramento, El Dorado, Placer, and San Joaquin counties.
Our Staff of Sacramento Bankruptcy Attorneys have solid legal expertise with the following Bankruptcies:
The Sacramento Bankruptcy Attorneys in our office have successfully represented hundreds of clients in eliminating tens of millions of dollars in credit card and unsecured debt. Chapter 7 Bankruptcy Law is extremely helpful in protecting individuals from over-bearing creditors. It is often referred to as the “Fresh Start” bankruptcy. Chapter 7 Bankruptcy, (named after a section within the Bankruptcy Code), is generally the cheapest, the easiest, the best for credit rehabilitation, the quickest to obtain a discharge, and for most people the preferred type of bankruptcy to file.
When a Chapter 7 bankruptcy is handled by competent Sacramento Bankruptcy Attorneys, an individual is permitted to keep all of their “Exempt Assets”. For the vast majority of people, all of their assets qualify as exempt. With few exceptions, in a Chapter 7 Bankruptcy, you eliminate or discharge all of your debts. Other than those few debts that are logically excepted from discharge for social policy reasons under bankruptcy law, you are not required to make any payments, unless of course you want to keep an asset that was pledged as collateral. For those assets for which collateral was pledged, you will need to continue to pay, reaffirm the debt, or redeem the collateral if you want to avoid the risk of the collateral being repossessed or foreclosed.
Unfortunately, a Chapter 7 bankruptcy does not give you a formal mechanism to force secured creditors, such as, home or car lenders, to let you catch up on past due payments. A Chapter 13 Bankruptcy, or possibly a Chapter 11 Bankruptcy, is usually the preferred set of bankruptcy laws for those who are looking to establish a formal “plan” for the payment of delinquent debts.
While you can use a Chapter 7 Bankruptcy to remove many involuntary or judicial liens, you cannot normally use a Chapter 7 Bankruptcy to remove voluntary liens such as second deeds of trust or home equity lines of credit. In contrast, there are many circumstances in which a Chapter 13 proceeding can be used to remove these junior deeds of trust or home equity lines of credit. Read More…
The Sacramento Bankruptcy Attorneys in our office have successfully handled many Chapter 11 Bankruptcy Reorganizations. Chapter 11 Bankruptcy Law is the most common bankruptcy for corporations and individuals with high income or very high debt who want to reorganize their debts. It is particularly popular for Corporations and Limited Liability Companies that own commercial real estate property and need to restructure. In a Chapter 11 Bankruptcy, a Plan of Reorganization is proposed to the court. Under the Plan of Reorganization, a repayment program is proposed which may include the writing-off of certain types of debt. In addition to a Plan of Reorganization, a Disclosure Statement is prepared. A Disclosure Statement is much like a prospectus. Its purpose is to describe how the Plan of Reorganization will be feasible, and to provide information for a creditor to make an informed decision of whether to vote for the Plan. Generally, the Debtor continues to operate the business or property during the pendency of a Chapter 11 Bankruptcy. However, there are situations when the Debtor may lose control of its business or assets in a Chapter 11 Bankruptcy to a trustee. The loss of control usually occurs when there have been financial irregularities in the past, financial irregularities in the case itself, or a failure of the Debtor to following the court’s rules.
Generally, if you are looking for a reorganization bankruptcy and qualify for a Chapter 13 Bankruptcy, it is preferred over a Chapter 11 Bankruptcy. The cost to hire Bankruptcy Attorneys to prepare a Chapter 13 Bankruptcy is considerably cheaper, the reporting requirements much less, and the requirements to have a Plan of Reorganization approved are easier. However, if your debts are particularly high, you are not an individual (e.g. a Corporation), or you need more flexibility than generally provided in a Chapter 13 Bankruptcy, Chapter 11 Bankruptcy may be the better alternative. Read More…
Chapter 13 bankruptcy law is traditionally the most beneficial for those wanting to reorganize their debts. Chapter 13 bankruptcies are particularly popular for individuals who have become delinquent on their home loans and need time to get caught up. It is also a good choice for those individuals who may not qualify for a Chapter 7 bankruptcy for income or other reasons.
In a Chapter 13 Bankruptcy, our Bankruptcy Attorneys prepare a Plan of Reorganization to be proposed to the court. Under bankruptcy law, if the Plan of Reorganization meets certain criteria, it is approved by the court even over objections of creditors. In other words, a Chapter 13 Bankruptcy Plan is a way to force uncooperative lenders or debt collectors into working with you.
The formulation of a Plan of Reorganization is rather complicated, but generally speaking, you are required to pay your disposable income to the Trustee for typically three to five years. The trustee, after taking his/her fee of approximately 10% of the payments, uses the money you paid to pay your creditors as set forth in your plan. Typically, at the end of the Plan of Reorganization, your secured loans are caught up, and with limited exceptions, the unsecured creditors are either paid in full or their balances are discharged.
The biggest difference between a Chapter 13 Bankruptcy and a Chapter 7 Bankruptcy is that in a Chapter 13 Bankruptcy you make monthly payments to the trustee. In a Chapter 7 Bankruptcy, you do not make monthly payments to the trustee.
A Chapter 13 Bankruptcy is typically more advantageous than a Chapter 7 if you are behind on secured loans and need time to get up. Likewise, as Sacramento Bankruptcy Attorneys, in a Chapter 13 bankruptcy we can sometimes strip certain deeds of trust from your residence if you owe more on a first deed of trust/mortgage than your home is worth. This option of removing a junior deed of trust and/or mortgage does not currently exist in a Chapter 7 Bankruptcy. In the current housing market, this is one of the greatest benefits of a Chapter 13 Bankruptcy.
Besides providing a plan to catch up on delinquent secured payments and remove junior deeds of trust, a Chapter 13 Bankruptcy is also often filed in cases in which individuals make too much money to qualify for a Chapter 7 Bankruptcy. Read More…
Frequently Asked Questions about the Bankruptcy Process:
The process for filing a Chapter 7 Bankruptcy is relatively straight forward. Unlike many other legal matters, it is extremely rare for Chapter 7 Bankruptcy cases prepared by experienced bankruptcy attorneys to drag on. Arguably 90% of the work is completed before the case is filed.
Almost all of the work for an effective Chapter 7 Bankruptcy is done prior to filing. Typically, you meet with one of our bankruptcy attorneys to discuss your situation and see if non-bankruptcy alternatives are available. If not, then one of our bankruptcy attorneys will assess your income, expenses, assets, and goals to determine if a Chapter 7 or Chapter 13 is better for your situation.
During that same meeting, which usually last about one hour, we will often do some of the basic data entry necessary to complete your schedules, download a credit report, and come up with a list of things needed for the second meeting.
After the first meeting, we will usually ask you to gather necessary documents such as your most recent tax return, bank statements, and pay stubs, and take the court required online counseling session. This online session is usually 30 minutes to an hour in length, and can be done in our office or in your home. At the end of that online session, you will be provided an electronic certificate that must be filed with your case.
After you have obtained the few necessary documents and taken the online counseling session, we typically schedule a second meeting with our bankruptcy attorneys to finalize your schedules, review the petition, and sign the documents. This second meeting can take anywhere from 15 minutes to two hours depending on the complexities of your case and how much we were able to accomplish during the first meeting. Typically, within one to two business days after you have signed the documents, our bankruptcy attorneys will file them with the court.
After your case has been filed, you will receive a one page piece of paper from the court titled “Notice of Commencement of Case.” This is the same document that your creditors get, and to the extent you are receiving harassing phone calls, they usually stop once this document is received. This document typically arrives within four to seven business days after filing.
The Notice of Commencement of Case is important as it describes the date, time, and location of your “First Meeting of Creditors.” Unfortunately, the name “First Meeting of Creditors” is a misnomer as creditors rarely attend in consumer cases. It is usually only the clients, the bankruptcy attorneys, and the Chapter 7 trustee in attendance. These meetings are scheduled for a one-hour block of time, but there are usually 10-15 cases on calendar for that same hour. If your case was prepared by one of our experienced bankruptcy attorneys, it is unlikely that your interview will last more than 3-5 minutes! A quick Meeting of Creditors is the result of good bankruptcy attorneys who have completed your schedules accurately and discussed any potential issues with the trustee in advance. It is required that you bring approved evidence of your Social Security Number (e.g. Social Security Card) and a government issued photo identification to the meeting. Otherwise, you may have to attend a second meeting of creditors.
Besides attending the meeting of creditors with proper identification and answering a few basic questions, there is really only one additional requirement in order to complete your bankruptcy case. You will need to take a Debtor Education course. These courses are offered online, often by the same company that handled your pre-bankruptcy counseling session, and typically take 90 minutes to complete. Once you have taken that course, be sure that one of our bankruptcy attorneys receives the certificate, because it needs to be filed with the court.
In 95% of the Chapter 7 cases handled by our bankruptcy attorneys, no further work is needed on your part, and you will receive your discharge approximately 100-110 days after the date your meeting of creditors was first scheduled.
The process for a Chapter 13 bankruptcy is very similar to that for a Chapter 7. Most of the work is done at the outset. The petition, schedules, and statement of financial affairs are filed usually at the same time, or within 14 days of the petition. Likewise, a “Means Test” type analysis is performed to determine the amount of current monthly income and disposable income of the debtors. The form seems relatively straightforward, but completing it accurately is very difficult, and can have a huge impact in deciding the length of the plan of reorganization, and the amount that has to be paid to creditors during the course of the Chapter 13.
In addition to the above documents which are very similar to a Chapter 7 bankruptcy, in a Chapter 13 bankruptcy a Plan of Reorganization has to be prepared, filed, and transmitted to the creditors. If the Plan meets certain statutory requirements, it will be approved by the court. There is no “vote” of creditors required, and even if a creditor objects to the Plan it will still be approved if the statutory requirements have been met.
In addition to the filing of a Plan, there are often motions to value collateral that must be filed and potentially litigated. These motions are important as they can determine how a potentially secured creditor’s lien is to be treated in the bankruptcy.
When a Plan is approved by the court, the Debtor then traditionally makes monthly payments to the Chapter 13 trustee. While theoretically the Plan payments may only last a few months, in virtually all cases the Plan payments last between 36 and 60 months. The length of the Plan payments is determined by many factors including the income of the debtors, the assets of the debtors, and the amount of claims that need to be paid.
Before the debtors have completed their plan payments, they will want to have taken Debtor Education Course which is required before a discharge can be entered. The course is usually done online, takes approximately 90 minutes, and costs less than $25.00. Once all of the Plan payments have been made, and the course has been taken, the trustee will issue a final report. Following the issuance of the final report by the trustee, and a final report by the Debtor regarding support payments and similar items, the clerk will issue a “discharge”. This is typically the final act in the case, and thus shortly thereafter an order closing the case is issued.
Chapter 7 and Chapter 13 bankruptcies are very much controlled by mandatory forms and procedures. The benefits of them are that they are economical, and not subject to much litigation or dispute. The problem with Chapter 7 and Chapter 13 bankruptcies is that they allow for very little customization. A Chapter 11 is a customizable reorganization bankruptcy. Unless the Debtor had a previous history of wrongdoing, generally speaking, a Debtor that acts with diligence, provides accurate financial reports, and acts in the best interest of the estate is entitled to remain in possession during the bankruptcy.
Many of the same schedules and statements that are required in a Chapter 7 or Chapter 13 bankruptcy are required in a Chapter 11. However in most Chapter 11 bankruptcies, the debtor may customize the plan of reorganization. However, with that right to customization comes with it an obligation to prepare, file, and circulate a disclosure statement. A disclosure statement is much like a business prospectus in that it seeks to be a plain English explanation of what the plan provides, and provides information from which a creditor can determine if they want to vote for the plan.
Unlike in a Chapter 7 of Chapter 13 bankruptcy, to confirm a plan of reorganization in a Chapter 11 requires a vote of the creditors. The number of votes needed is subject to many nuances. While the occasional debtor can successfully handle a Chapter 7 or a Chapter 13 without an attorney, it is extremely rare that a successful Chapter 11 occurs without the assistance of an experienced bankruptcy lawyer. Chapter 11’s not handled properly are typically converted to a Chapter 7, and occasionally dismissed.
Frequently Asked Questions about a Bankruptcy Discharge
There are several potential reasons to file a bankruptcy. Reorganization or restructuring of your debt is a driving reason for many, but for most the object is to obtain a release of liability of your debts. This is commonly referred to as a “discharge” or a “bankruptcy discharge” by a bankruptcy attorney.
In a chapter 7 bankruptcy, the deadline to object to discharge is 60 days after the date first set for the meeting of creditors. That meeting of creditors is usually first set 31 to 45 days after the bankruptcy was filed. Consequently, the deadline to object to discharge in most cases is between 90 and 115 days. The clerks of the court usually issue the discharge order within a week to 10 days after the deadline has passed.
This date is significantly different in a Chapter 11, Chapter 12, or Chapter 13 bankruptcy when discharge often does not happen until the plan payments have been made, or in some cases confirmation of a plan of reorganization. This date could also be delayed if an action to deny discharge was filed. Calculation of the discharge debt in a Chapter 11, Chapter 12, or Chapter 13 bankruptcy is usually best done by a bankruptcy attorney.
The discharge of a debt operates to relieve an individual debtor of their obligation on that debt. To the extent that collateral was pledged to secure the debt such as a car or home, if the debt is not ultimately paid the collateral can usually be repossessed or foreclosed upon to satisfy the debt. While there are some exceptions, the discharge of the debt does not erase the debt, it just removes the debtors’ personal liability for the debt. The collateral or other co-debtors still remain liable and potentially subject to collection actions. A bankruptcy attorney can explain other options of dealing with collateral such as a motion to redeem, motion to surrender, or motion for reaffirmation.
Besides exceptions of certain debts to discharge, there are also possible issues of denial of an entire discharge. Section 727 of the United States Bankruptcy Code discusses in detail certain times in which the debtor’s discharge of all debts is denied. The most common scenarios of non-dischargeablility of all debts are: when the debtor is not an individual, but rather an entity; when the debtor has hidden, concealed, or transferred assets prior to or during the bankruptcy; when the debtor has concealed or destroyed financial records; or when the debtor makes false statements in a bankruptcy. A good bankruptcy attorney should be able to advise you on how to cooperate with the trustee and schedule assets so as to avoid a complaint to deny discharge.
Certain types of discharges happen automatically provided that there is no objection. For example, credit card debt is usually discharged automatically. Other types of discharges require affirmative action on behalf of a debtor, a creditor, or their bankruptcy attorney. If a creditor opposes a discharge of a debt, they usually file an adversary proceeding which is like a mini-lawsuit in the bankruptcy court opposing the discharge. This type of action is typically required to make debt s arising out of fraud non-dischargeable.
Conversely, certain types of debts are automatically not given a discharge even if the creditor takes no action whatsoever. A typical example of a debt that will be due after a general discharge even if the creditor did nothing is child or spousal support.
Certain debts, such as student loans, require an affirmative showing of undue hardship by the debtor before a discharge will be entered. Determining what type of action needs to be taken to avoid or obtain a discharge is very important, and discussing this matter with a bankruptcy attorney is usually wise.
For debtors that are eligible to get receive a discharge, generally speaking all debts are discharged with certain specific exceptions. The good news is that those exceptions are not a random list based on the judge or the court, but rather spelled out relatively clearly in the United States Bankruptcy Code. More specifically, Section 532 of the Bankruptcy Code which is found in Title 11 of the United States Codes provides for eighteen different categories of debts that are not dischargeable. Before filing bankruptcy, a bankruptcy attorney should review that section in detail with you to determine what may be applicable.
While there are sometimes exceptions-to-the-exceptions, the most common exceptions to a bankruptcy discharge include most: taxes or customs duties; debts obtained by fraud; debts not listed or scheduled by the debtor; embezzlement; child support, spousal support, or certain other domestic support obligations; willful or malicious injury to someone or their property; death or injury arising out of drunk driving; criminal fines and restitution orders; and student loans.
As you would expect, there are many twists and turns within each category of debts that may make the debt dischargeable or not, and that is where an experienced bankruptcy attorney can give you some guidance. Likewise, the list above was not intended to list everything, as there are many other types of debts that may not be discharged.
Please contact our law firm today to discuss your case with one of our Sacramento Bankruptcy Attorneys.