Discrimination solely because you filed for bankruptcy is prohibited under the U.S. Bankruptcy Code. Certain persons with security clearance and sensitive financial positions can have issues with bankruptcy.

No. Do not wait until you’ve drained out your savings, or 401(K), or borrowed more money from relatives and friends. There are no rules that say you have to be behind or broke to file for bankruptcy. Consult with a bankruptcy attorney right away if you do not see a way out of your current financial situation.

We do our best to be competitive and provide reasonable time to pay attorneys’ fees. In fact, many clients find that stopping payments to credit cards for a couple of months cover attorneys’ fees. In Chapter 13, sometimes part of the fees are paid up front and some through the plan payments.

In Chapter 7, as long as you are current on your payments and meet the equity limits, you can keep your home. In California, there is a homestead exemption up to the following amounts:
(1) $75,000 is single debtor.
(2) $100,000 if debtor is family unit.
(3) $175,000 if debtor or spouse is at least 65 years old, disabled, or if annual income is less than $15,000 or $20,000 if married.
Refer to California Exemption Chart.

You are given the same equity limits in Chapter 13 as Chapter 7. But you do not have to be current on your mortgage. In Chapter 13, you are given up to 5 years to repay the missed mortgage payments.

Bankruptcy is reported on your credit report for 10 years. Most people mistakenly believe that they get a Scarlett Letter stamped on their forehead and won’t be able to get credit for 10 years (or some even believe for life). In fact, most of our clients get credit offers within a few months after filing. Bankruptcy stops the bleeding and places you in a position to rebuild your credit worthiness. Clients usually start with credit cards with smaller limits. They use these wisely (never carrying a balance), and get higher limits. The credit score increases and permits more extensive credit such as car loans. It’s similar to building credit for the first time like a high school or college student graduate.

People do rebuild their credit after bankruptcy and go on to buy homes and/or cars. Some clients’ credit score may actually increase after bankruptcy since bankruptcy will have a positive effect on your debt-to-income ratio.

As the business and consumer bankruptcy filings that have exceeded millions show, this is not the case. The 2005 changes to the bankruptcy laws made it more difficult to file for bankruptcy, but we have spent a significant amount of time using the amendments to our clients’ benefit. Consult with a bankruptcy attorney from JC Law Group PC to determine if you qualify.

Not true. In Chapter 7 bankruptcy, debts are wiped out completely with the exception of certain taxes, child support/alimony, student loans and specially designated debts. In Chapter 13, the amount you repay is based on your disposable income (money left after your expenses are subtracted from your income) or liquidation analysis (property that we cannot exempt). In most situations, 100% repayment is not required.

We suppose this could change, but this does not occur in the Bay Area. However, it is public information, and anyone that wants to can go to the bankruptcy court and request your file. Additionally, the information is available on the federal database PACER. But to access it, you must have an account and pay to view it per page. Hearings related to your case are also posted on the court’s website for a brief time.

Not true. Credit cards are unsecured debts and will generally be discharged by bankruptcy. This is the debt we discharge the most often.

No, in fact it’s the opposite. Once you take the credit counseling course and receive the certificate, the certificate is valid for 180 days. You must file bankruptcy within that 180 day period to use the credit counseling certificate. If you wait too long and the credit counseling certificate expires, you will have to take another credit counseling course and get a new certificate. Check with the US Trustee’s Website for authorized Credit Counseling course providers. We provide clients with information about credit counseling providers that we find are cost-effective and consumer friendly.

In short, there is no waiting requirement after completing credit counseling to file for bankruptcy.

Well then so are your family, friends, co-workers and the businesses you visit. Our clients are doctors, teachers, constructions workers, retail workers, hair stylists, police officers, bankers, rich, poor, blue collar, white collar…you get the idea. Plenty of famous and successful people filed for bankruptcy. For those struggling with the idea of filing, ask yourself whether you want a society of people in indentured servitude that die poor paying their debts, or people free from debt that can be productive and active members of society? Certainly we all want to pay our debts if we can. But sometimes it’s just too overwhelming.

There is no set formula, and don’t let wishful thinking make you believe promises made by debt settlement companies and others feeding off your sense of fear or guilt. It is true that oftentimes credit card companies will offer to settle on stale debts. But sometimes they don’t. And the settlement amounts vary. Moreover, creditors may (and often do) sue you. Unless you have a valid defense for the lawsuit, you may lose the case. They can get a judgment against you and garnish your wages, take your money in your bank account or put a lien on your property.

Assuming they do settle, what the creditors and debt settlement companies don’t tell you is this: the amount forgiven will be considered income to you and you will be taxed on the amount forgiven. It’s better to owe your credit card money than the IRS because you can discharge the credit card debt in bankruptcy much more easily!

It is common for our clients to be scammed by these companies. There is some promise to settle debts for pennies on the dollar. Creditors, however, do not have to settle with you at all; there is nothing special about the relationships between debt settlement companies and credit cards/debt collectors that guarantee settlements. Most of the time, the debt settlement companies will keep most of the money for themselves, leaving little for the actual settlement. They can’t do anything for you that you can’t already do for yourself – not pay your creditors then work out a settlement.

If you do decide to hire a debt settlement company, please be sure to check with the FTC and Attorney General office of the state the company is located. There are lots of warnings issued by governmental agencies regarding the dangers of hiring a debt settlement companies. We also see the United States Trustee that oversees bankruptcy sometimes go after debt settlement companies for scamming consumers.

Accumulating debt with an anticipation of filing for bankruptcy may be considered fraud. Bankruptcy is for the unfortunate but honest debtor.

ALL debts must be listed on the bankruptcy petition. Everyone you owe money to must be listed. This includes friends and families. See Do’s and Don’ts of Bankruptcy. Also note that even if you have a credit card with no balance, that credit card will likely be closed by the credit company automatically.

Ask yourself, what will it take for me to get out of debt? Use this calculator to figure it out. Most people continue to make the minimum payments not realizing the amount of money it will actually take to get out of debt. Do not make the mistake of getting trapped in the cycle of making minimum payments – never being able to live debt free.

After filing for bankruptcy, your debt-to-income ratio improves. This will help your credit score in the long run. Additionally, you cannot file again for 8 years (in case of filing Chapter 7 followed by another Chapter 7) so you’re actually a “safe bet” for the creditors. Most of our clients report being able to get either a secured or unsecured credit card soon after bankruptcy, albeit with a modest credit limit. This fluctuates with how banks extend credit. How long you have to wait to get a credit card will depend on your individual circumstances such as your income, work history and the banks’ lending practices at the time you apply.

The law says your bankruptcy can be reported on your credit report for up to ten years from the date you filed. For whatever reason, it sometimes only reported for seven years, but clients manage to get credit cards, car loan and home loans even with a bankruptcy on their record.

Bankruptcy applies to Bank of America as well as all other banks. Individual banks and persons do not get special passes. Read more about Chapter 7 and Chapter 13 to learn about which debts are discharged.