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Financial issues can be trying and daunting when considering solutions to debts. But there are ways to handle this by starting a consultation with an experienced bankruptcy attorney at the law firm of Sunita N. Sood to verify the best viable option for your situation. When all choices have been reviewed, bankruptcy may be the best solution in handling your expenses. There are two types of bankruptcy filing, Chapter 7 and Chapter 13, both with stipulations to see if you qualify.
To file for Chapter 7 Bankruptcy, you would be in a situation where little to no income is being received. A “Means Test” will need to be taken by you, the debtor, to see if any disposable income can be used to pay back creditors. If there isn’t enough, then filing for Chapter 7 should be initiated. The state of California will determine any non-exempt assets that can be liquidated or sold to pay back creditors. Some assets can be protected from being liquidated, such as a home, clothing or unemployment benefits. Our lawyers can guide you in determining which assets can be used to reimburse at least some of the debt. Filing for Chapter 13 Bankruptcy is another option. This option is better suited for you if you have a regular source of income. You will be assisted in reorganizing finances to pay back by means of a payment plan. You will need to file a petition and a court will decide to stop garnishments, collections or repossessions.
Procedures
- Time frame is usually 3-6 months for proceedings. If the time frame includes the completion of a payment plan when filing Chapter 13, it can take up to 5 years.
- Within 15 days of filing, a Notice of Commencement of Case will be mailed to you and your creditors.
- 1 month after filing, a Statement of Intention should be filed deciding on whether you will give up property.
- Within 40 days of filing, your petition will be reviewed in a hearing with creditors.
- 45 days after filing, a statement including income data will need to be submitted to the court to ensure understanding of the bankruptcy procedure.
- Within 3 months of filing, cash advances and purchases over $550 will need to cease.
- Within 6 months of filing, a credit counseling class will need to be completed.
- Once your petition is filed, the court will issue a stop to all collections, garnishments, repossessions or foreclosures.
- A financial management course will need to be taken before the case is completed.
Documents required
- Social Security card.
- California Driver’s License.
- Past six months of employment or unemployment pay stubs.
- Three months of all bank account statements.
- Past month of utility bills.
- Mortgage and vehicle payment statements.
- Past 2 years of tax returns from IRS.
- Tax debt documents.
- Documents concerning lawsuits, foreclosures, collections or repossessions.
- Rental or lease agreements.
- Award letter for any other income such as disability, workers’ compensation, pension, retirement, social security or military compensation.
- Paperwork concerning job termination.