Bankruptcy Costs

How much are bankruptcy costs?

Many people who call our  San Diego bankruptcy office will ask us about bankruptcy costs before they even have been set up to meet. They see bankruptcy lawyer after bankruptcy lawyer telling how much less expensive their bankruptcy cost is compared to the next bankruptcy lawyer. It is terribly confusing and hard to make sense of.
We’ve also seen our competitor’s advertisements on TV or heard them on the radio spouting bankruptcy cost  prices, so we completely understand “Call us now, no money down.” “We can do your bankruptcy for $995.” “$300 to start your bankruptcy.”   As a firm, we think quoting prices without really knowing the specific situation leads to huge misunderstandings and distrust.

There is no “one size fits all” in bankruptcy costs.

If giving our clients a “one size fits all” pricing for bankruptcy legal representation worked, we certainly would do it! You wouldn’t have to come in to speak to a lawyer. It wouldn’t require one hour of meeting time to discover exactly what your situation is and how the law might apply to you. If we did a one size fits all pricing you might not even have to talk to a lawyer – you could talk to a paralegal and never even see a lawyer.
 We look at it this way: If I were on the other side of the desk and coming to see a law firm for a problem that was making me lose sleep, I would want to see a lawyer — not a paralegal. Paralegals are forbidden, by law from offering legal advice and that’s what I’d be seeking. And, we know that if it’s bad enough for you to be reading this website, then, truly, it’s bad for you. 
So back to the initial point: the only way we can know how much to bankruptcy costs for you is for you to come in, sit down face to face and discuss your individual situation. That meeting is free, and you will speak to Paul.
One’s financial situation is kind of like weight loss: sometimes they need to lose 10 pounds, sometimes they need to lose 150 pounds. You’ve probably had to lose weight at one time or another. The plan of attack varies from case to case. Sometimes all you need to do is cut out the sodas, other times well, Jenny Craig….to surgery. When you have a consultation with us, we can promise you is that the price that we quote for you will be fair. We are not the most expensive bankruptcy law firm in town nor are we the cheapest. But we’re certainly one of the most thorough firms you’ll find. We take that hour consultation and use it to your advantage, and then price your personal case directly in line with your situation.

Get The Guidance You Need

If you are considering filing for Chapter 7 or Chapter 13 bankruptcy, you need clear and experienced guidance. When you hire a bankruptcy attorney to help you  protect your home, car or property. Taking the wrong action, however, can seriously impact those results. There are important things not to do, such as:

  • Do not transfer assets or change titles
  • Do not repay debts to family members
  • Do not run up your credit cards
  • Do not choose to do nothing

When bankruptcy trustees can review transactions up to four years, things clients do leading up to filing can complicate issues.

Do Not Wait To Get A Free Consultation

The most important thing to do when facing a serious financial crisis is to get the advice of an experienced lawyer. To schedule your free consultation  call our office 619-235-4095. Paul will set up an online consultation.

Will My Employer Know If I File Bankruptcy

will my employer know if i file chapter

will my employer know if I file chapter

If I file Bankruptcy can I lose my job

Clients often ask whether their job may be in danger if they file bankruptcy and / or whether the employer will know if I file bankruptcy. The short answer is generally no. In fact, usually the fact that you have filed bankruptcy is not even known to your employer. The bankruptcy court doesn’t routinely send notices to an employer when her employee files bankruptcy.  There are very rare exceptions. One occurs if you owe your employer money. If you do, you’re required to list him or her as a creditor and s/he DOES get a notice from the Court. Another exception occurs where one’s professional license is directly connected to his / her credit profile. I know of one client whose license as a professional certified financial planner was revoked after he filed bankruptcy, a risk he knew of prior to filing, but in the face of which needed to file anyhow.

Will employer know If I file bankruptcy and fire me?

Thankfully, these exceptions are extraordinary. Now to the question of whether you can be fired for filing bankruptcy. I cover this in greater detail in my article about security clearance and bankruptcy. Generally, an employer is not permitted to fire an employee just because the employee files bankruptcy. As a practical matter, for most employers, the occurrence of an employee filing for bankruptcy would be much more information than he/ she wants. For the vast majority of employees, filing bankruptcy is not even relevant to their occupational responsibilities.

I don’t want to minimize the invasion of privacy one would feel IF one’s employer learned of his employee’s bankruptcy filing. There is a very good reason I qualify this with a big “IF.” That reason is that in my twenty-one years in practice the only time I know of a client’s employer learning of the bankruptcy was when a client informed his boss that he needed to file. That employer so highly valued his employee that he paid the client’s fee in order to expedite the bankruptcy and free his employee of the distraction of creditors calling. We should all have a boss so generous;)

Military employment  and Security clearances

Military service members especially and also many other government employees have unique risks when it comes to finances. The folks up the chain of command expect their subordinates to have their finances in good order. Otherwise – and this is the conventional, but proven wisdom – the employee may be tempted to do something unethical, illegal or downright treasonous in order to avoid the worst consequences of being in debt. Many military service members and those in the intelligence services risk losing their security clearance if their finances aren’t sound enough for the commander’s / supervisor’s criteria. Often as not, the employee’s work requires that security clearance so losing the clearance = losing the job. Please also read my article on “Security Clearance and Bankruptcy.”

It may seem ironic, but I’ve represented clients whose security clearance came up for review and their supervisor’s advice was to consider bankruptcy. In one such case, the supervisor actually gave the employee – who was working for a defense contractor – an ultimatum: file bankruptcy or you’ll lose your clearance and, therefore, your job. All is well with her now, having gotten her bankruptcy discharge (which, by the way, the supervisor also demanded to see.)

 

Bankruptcy when married

What happens if you file bankruptcy when married ?

If only one spouse is in debt or in need of bankruptcy relief, only that spouse should file. It may seem obvious, but there’s generally no reason to torpedo both the filing and the nonfiling spouse’s credit score unless there is a reason.   Where I practice bankruptcy law (in California), it’s at least remotely possible that creditors could go after the non-filing spouse for “community debts” if the creditor is shrewd about applying the Family Code. In the 20+ years, I’ve been in bankruptcy practice though, I have yet to experience a creditor trying this approach with any of my clients’ spouses. But I do know it’s been done.

“I’m married. My spouse is filing. Do I have to file with him/her?” No. See above.

How will assets, credit score, and access to my credit card accounts be affected if my spouse files bankruptcy?

In general, the filing of bankruptcy by one spouse will not automatically and adversely affect the other’s assets, access to credit including credit rating.  A consumer’s credit score and credit history is his / hers alone. Most creditors do not attempt to collect from someone who is not the borrower of record, i.e. signed the application for the loan or credit card because it’s too much additional work and the result for the creditor is often uncertain even in community property states. Pay careful attention to credit cards held jointly, though. Obviously if after the bankruptcy you and your spouse apply for joint credit, there is an impact. The card issuer may cancel and close the entire account or only as to the spouse filing bankruptcy.

Does one spouse’s bankruptcy filing change the character of joint debts? The short answer is no. A debt that was joint prior to the filing of the bankruptcy is afterward the debt of just the nonfiling spouse. There is a difference in how this subject is treated in a Ch. 13 versus a Ch. 7. But keep in mind that although 25% of bankruptcies are filed as Ch. 13s, only about a third of those cases actually survive the Chapter 13 plan and get a discharge. So in about 7.5% of the bankruptcy cases, the difference ultimately matters. A Ch. 13 reorganization allows the filing spouse’s Plan to determine which creditors get paid and how much. A Ch. 7 bankruptcy doesn’t confer this benefit on the nonfiling spouse.

“The state I live in is a community property state. Does that make a difference? If so, how?”  There are nine community property states: California, Arizona, Wisconsin, Idaho, Nevada, Louisiana, New Mexico, Washington, and Texas. I’m only licensed to practice in California so I won’t pretend to be familiar with the state-by-state nuances of the other states in that list. But some characteristics are shared among them all. Generally, in a community property state, assets acquired during the marriage with earnings are owned equally by the husband and wife. Likewise, debts incurred during the marriage are owned equally by husband and wife.  In California, community property is “liable” for the “separate property” debts of either party.

Here’s a classic example, taken from a real case: Man gets divorced, falls behind on his child support to the tune of $20,000. He remarries and, with his new wife, buys a home. His former wife puts a lien on that home for the $20,000 owed. Valid lien? You bet, at least in California. This is obviously a very big deal and triggers the need for smart planning by the bankruptcy lawyer. It’s also a trap for the unwary. Say the divorced-and-remarried man in our story decided to quitclaim the home to his new wife in order to avoid a lien. Probably a very bad move in the context of either bankruptcy or Family Court. Bankruptcy law doesn’t trump state law as to the nonfiling spouse nor as to community property held by the debtor (the spouse who filed bankruptcy) with the nonfiling spouse! This same theory can be applied to any community property asset, whether it’s a bank/credit union/brokerage account or motor vehicle, to name just of few of the most commonly held community assets.

 

I Get Harassing Calls and Dun Letters from Collection Agencies Regarding My Spouse’s debt. Is there anything I can do?

Collection agencies are a species so unique that they have their own federal act defining how they may – and may not – behave The Fair Debt Collection Practices Act [FDCPA]. And in California, consumers also have the additional protection of the Rosenthal Act, which essentially takes much of the FDCPA and applies it not just to collection agencies (“debt collectors”) but also to the original creditors, often an in-house collection department of the creditor.  Neither you nor your spouse has to be in bankruptcy to invoke these laws.

How do you do that, make creditors stop?

Practically speaking, it’s usually more effective to (1) dispute the debt with the collector – demand written proof the debt is owed; (2) secondly, if the debt is owed only by your spouse, you may demand that the collector cease all contact with you.

It’s especially offensive when the person owing the debt has filed bankruptcy and the collectors keep calling. Most of them know better and abide by the law. There are exceptions. While the bankruptcy case is ongoing, the spouse who filed may ask the Court to sanction the creditor for a violation of the “automatic stay”, the rule which as part of Bankruptcy Code Section 362 says creditors must cease all attempts to collect from the spouse who filed. If a creditor persists in this behavior – calling, writing, demanding payment – after the bankruptcy case is closed and the discharge has issued, the creditor may be sanctioned for a “discharge violation.” For you to know these rights and just threaten to invoke them is usually enough to make any sane creditor abandon all attempts to collect.

May I Keep My Bankruptcy Filing a Secret From My Spouse?

Maybe. If there are any debts jointly owned with your spouse, that must be disclosed in your bankruptcy filing and the “co-debtor” spouse is entitled to notice of the proceedings. If there are no joint debts, you may skirt the requirement to disclose, at least in a Ch. 7. In Chapter 13, though, which drags on for years, it’s practically impossible to hide it. Wage garnishment and the surrender of tax refunds are common mechanisms to pay the Ch. 13 plan. Do we really think the nonfiling spouse isn’t going to notice? But the practical answer is that it’s not a good idea to hide your bankruptcy even if you could get away with it.  Mailings from the bankruptcy court will come to the address you give the Court. If that’s your home, OOPS! You don’t need rocket science or even this article to know that keeping such a secret could ultimately have a significant and negative effect on your marriage.

Will I Face My Bankruptcy Creditors?

Will my creditors come to the court if I file bankruptcy?

What many of my bankruptcy clients worry about is that their bankruptcy creditors will be at the banker’s meeting if they file bankruptcy in San Diego and it will be embarrassing for them. The good news is, bankruptcy creditors rarely attend bankruptcy meetings of creditors (also called 341 hearings).  However, this does not mean that your bankers are giving up their right to object to your bankruptcy discharge.

Bankruptcy Bankers are not required to go to the  meeting of bankers

When you file for bankruptcy in San Diego, your creditors receive notice of the date and time of your meeting of bankers. But this does not mean that they will show up. Your creditors are invited, but not required, to attend your hearing. In 98 percent off all bankruptcy cases, no creditors will appear at the meeting of creditors. If a creditor does show up, your attorney will usually know about it and so will you.

Most Bankruptcy Lenders will not appear at the meeting of bankers

Creditors are not allowed to conduct an extensive examination of you and your situation at the meeting of bankers. Mostly creditor questions are limited to the nature and location of the debtor’s assets. In San Diego most creditor meetings are very short over in 5 to 10 minutes so, the bankruptcy trustee only has a few minutes to devote to each case.

As a result, unless a creditor believes that you are committing fraud or hiding assets, it will not benefit from taking the time to come to your hearing. However, even if a creditor does not attend your meeting of creditors, it can still object to your discharge

 

Can I Stop My Bankruptcy Once I Have Started It?

There are debtors who change their minds after filing bankruptcy. They will ask their bankruptcy attorney if they can cancel or stop their bankruptcy filings. Particularly, after whatever emergency that precipitated the bankruptcy has been averted like foreclosure or a lawsuit.
In Chapter 13, the borrower, the person who has filed for bankruptcy, can actually file a voluntary request for voluntary dismissal. In Chapter 7 there isn’t any such process. So, if you’re in a Chapter 7 bankruptcy and um, you just won the lottery, or you know, for some reason, uh, whatever reason, you change your mind um, you’re kind of locked in. However, there’s a sort of unofficial way to maybe get your Chapter 7 dismissed. And that is to just simply not show up for the Meeting of Creditors. Um, now this is not something that I could ever actually, um, advise someone to do um, but the fact of the matter is that if someone fails to appear for their Meeting of Creditors the great likely hood is that the Trustee is going to dismiss the case. So, it’s sort of a back door way of doing it and uh, something that I couldn’t really recommend.

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What Is An Automatic Stay?

Bankruptcy represents a longstanding commitment in this country to helping people get a fresh start. This principle has never been giving only certain people a fresh start.”– Tim Johnson

For the person having financial trouble, there’s a constant loss of money. As each month passes, they tend to fall farther and farther behind. Have you ever been in a situation where you don’t have any money, but the rent has to be paid? The cell phone payment is due and you’ve just received notice that your car is about to be repossessed? How will you have enough money to pay for your child’s daycare while you’re at work? How will you get to work without a car? Sometimes the same creditors will call multiple times in one day. You can’t have peace in your own home because the phone keeps ringing. If you answer the phone, the bill collector is rude and demanding. If you ignore the phone, your children ask why you won’t pick it up. If this is how you’re living right now, don’t despair. Bankruptcy can “stop the bleeding.” As soon as a bankruptcy petition is filed, the court enters what is called an “automatic stay.”

WHAT IS AN AUTOMATIC STAY?

An automatic stay puts all the actions of creditors (people you owe money) on hold while the bankruptcy court determines what type of debt relief is appropriate for you. When the automatic stay is in place,
creditors can’t harass you, and they can’t proceed to sue you for debts listed in your bankruptcy petition. If a creditor already has a judgment against you and is about to garnish your wages, the automatic stay will protect your wages from this as well. Here’s how that works: once your bankruptcy case if file, the Court generates a Notice of “Filing of Bankruptcy Case and of Meeting of Creditors.” The Court EMAILS this notice to your attorney so he or she gets it right away. Armed with this document, your attorney can then file in the court case where the judgment against you was entered  a “Notice of Stay of Proceedings.”  I typically serve that notice on the judgment creditor, his / her attorney, the court clerk and the Sheriff’s office (since they usually enforce the wage garnishments). That’s the end of all my client’s troubles from that case. Once a bankruptcy petition is filed and the automatic stay is in place, you and your bankruptcy attorney are free to devise a plan to put you back on the path to financial freedom. You no longer have to worry about financial bleeding.

 

If we can help you change financial direction call us at 619-235-4095 

 

Small Business owner filing Personal bankruptcy

Will My Small Business Be Affected by my Personal Bankruptcy?

Does your personal bankruptcy affect your corporation? Probably, we should talk about how most of us who operate small businesses get credit for our corporations. And that’s by personally guaranteeing the debt. Any small business owner or operator and, their corporation is gonna be affected, by their personal bankruptcy. This is because it’s a virtual certainty that they’re personally guaranteeing the debt of the corporation when they get credit in the corporation’s name.

Read More

Business Bankruptcy Advice

san diego bankruptcy lawyer Can bankruptcy stop foreclosure?

Can bankruptcy stop foreclosure?

Can bankruptcy stop foreclosure?

One of the most difficult and traumatic challenges that a person can face is the prospect of foreclosure. A person’s home normally is the center of life. The idea that one’s home might be taken away from him or she can be a most bitter pill to swallow. Considering bankruptcy is the next thought. If you have found yourself facing the prospect of a foreclosure on your home — or if you have already found yourself smack dab in the middle of a foreclosure case — you did not necessarily have to assume that all is lost. In this day and age, there are some options available to you should you find yourself involved in foreclosure proceedings.

Bankruptcy can hold the foreclosure

Chapter 7 versus Chapter 13 has very different effects when your house is getting foreclosed on. In  Chapter 7 bankruptcy, if the borrower’s behind on the mortgage, the lender is simply going to ask the bankruptcy court for permission to ahead with the foreclosure. And that’s done by filing a motion. Those motions are routinely granted and then the lender goes ahead with the foreclosure.

Now, that used to be the standard operating procedure for lenders, but that was before the real estate bubble sort of burst and now there are practical considerations coming into the picture as well as legal ones and lenders are prioritizing which foreclosures. Lenders will go after the larger balance mortgages first. So, someone with a relatively modest mortgage loan um, might stay in their home for months. So far the record, in my practice, I’ve seen, I had one client stay in his home for 20 months before even receiving a notice of default.

Chapter 13 is actually designed to be able to help the homeowner stay in the house and catch up on the mortgage payments that they’ve missed. the best case is a borrower who has to be in Chapter 13 because of some kind of temporary financial setback. Because, if it’s a permanent financial setback, in their income flow they’re just not gonna be able to keep up with all the payments. That is because they’ve gotta make not only the entire on-going mortgage payment but, then they’re gonna have to make the Chapter 13 plan payment for the credit payment, bills and to catch up all the missed mortgage payments. But, for someone who’s had a temporary setback, it’s a wonderful thing.

Student loans and Credit Cards


Student tuitions that are charged by credit cards are dischargeable in bankruptcy 

If you have found yourself overwhelmed by your student loans you might wonder if you can discharge any student loan debt in bankruptcy.

There is some student debt that is dischargeable in bankruptcy

Student expenses like tuition and books charged on a credit card aren’t treated any differently than other kinds of expenses charged on a credit card .   If you are at a place where you are considering filing bankruptcy for your student loans. You will be well served to go into your records and see what exactly you charged on a credit card while you were in school . . Often the idea, of borrowing on a credit card to finance educational expenses is a “hindsight is 20/20” thing. When the  student borrower on a student loan has completed his / her education, finds himself in a bad financial bind and learns he could have made a different choice from the outset. 

But the uniformity of treatment of is both good news and bad news. As with any other debt incurred on a credit card, if it looks like the borrower never intended to pay it in the first place, the lender can fight back even in a bankruptcy. Any creditor can object to its claim to be discharged in bankruptcy. They do this by filing an “adversary proceeding.”  This doesn’t happen often, but it is  essentially a lawsuit filed within the bankruptcy proceeding itself.
You get the idea. It’s really common sense. If it looks like the borrower has acted reasonably in taking on debt, s/he will not likely face closer scrutiny if s/he later files bankruptcy.

 Should you charge your student loans on a credit card ?

These days, credit card interest rates are at historic lows. Money is practically free to the banks and they’re passing some of that happiness along to borrowers. It may make sense to many a borrower to finance his/her education on a credit card simply because the rate is so hard to match even under student loan programs.
If you think you might need bankruptcy and have student loans -go back in the records and review .What exactly did you charge by credit card.Then call us  to set up a meeting with Paul, he  will be glad to meet with you

paul staley bankruptcy lawyer
The Law Office Of Paul Staley provides legal advice and representation for residents of San Diego County. The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.
Paul Staley
Bankruptcy Attorney
1901 1st Ave., FLR 1 San Diego, CA 92101
Phone: +619 235 40 95
Email: pstaley@paulstaley.com

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