Sacramento Bankruptcy Attorneys

Sacramento Bankruptcy Attorneys

The 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.

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sacramento bankruptcy attorneysBroadly 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:

Chapter 7 Bankruptcy Law

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…

Chapter 11 Bankruptcy Law

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

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 bankruptcy dischargeFrequently 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.

How long until I get a discharge?

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.

What about debts that I pledged collateral, such as a home or car?

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.

Does a debtor or creditor have to file anything to determine if the debts should be discharged?

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.

Can a discharge be denied?

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.

What debts are discharged in a bankruptcy?

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.

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