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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

 

What is bankruptcy means testing?

 

Bankruptcy means testing is a mathematical formula used by bankruptcy attorneys to determine what type of bankruptcy relief a debtor can receive. Means testing was created by congress with the help of the credit card lobby to prevent bankruptcy abuse. The most likely mistake potential bankruptcy clients make is to first go online, late at night when they can’t sleep, and try to do means testing online. 95 percent of all San Diego residents who file bankruptcy wouldn’t fit the means test requirements online but still, qualify for bankruptcy. 0The bankruptcy means test is all about the math and how you put it together.

Means testing will determine if you can first even be considered as a candidate for a Chapter 7 bankruptcy, or if instead, you may be required to use a Chapter 13 case. This is an income-based means testing, and debtors who have income above the median income of their state are subject to the unpleasant limitations imposed by the Means Test. However, the analysis doesn’t end there; from the income on the Means Test, one gets to take certain deductions.

  • Taxes: You can deduct your tax obligations from your income on the means test as well.
  • Involuntary deductions: Deductions required for employment such as mandatory retirement plans, union dues, or uniforms.
  • Health, disability, or term life insurance
  • Secured debt payments These include payments on secured debts such as your mortgage or car loan. Even if your mortgage or car payment is above the national or local living standards, you can normally deduct it in full on the means test.
  • Court-ordered payments: If you are required to pay domestic support obligations such as alimony or child support, you can deduct these expenses on the means test.
  • Child care: Expenses for child care such as babysitting, daycare, or preschool.
  • Health care: If you incur more out-of-pocket health care costs (other than insurance) for you or your dependents than the allowed national standard, you may be able to deduct the actual amount you pay.
  • Education for employment or disabled child: You can deduct your education expenses if those expenses are required for your employment or for your mentally or physically disabled child.
  • Charitable contributions: If you regularly made charitable contributions prior to bankruptcy and expect to continue making those contributions, you can deduct them on the means test.
  • Care of elderly, chronically ill, or disabled: You can deduct the amount you contribute towards the care of an elderly or disabled family member or person in your household.

The Means Test determines if a bankruptcy petition must be assigned a “Presumption of Abuse” by the court. If your petition is assigned a presumption of abuse status, you must prove that your bankruptcy petition is not “abusive” or fraudulent. The rule of thumb so far, in practice, is that if the Means Test result is that “The Presumption of Abuse Arises,” it is extremely unwise to try and file the case as a Chapter 7. A bankruptcy attorney can properly do the Means Test for you and let you know what your options are. It’s a bad idea for you to rely on the so-called “Online Means Test Calculators” because the test is highly complex. The key to a thorough, accurate Means Test is not just getting in all the required income; it’s knowing how to apply bankruptcy law in figuring out how to maximize the allowable deductions. That is why just having a calculator isn’t going to do the trick.

Is bankruptcy a public record in San Diego?

Filing for bankruptcy is a matter of public record. So the idea that you can keep bankruptcy secret isn’t really true. It is something that you really have to look for to find out about. Who files bankruptcy in San Diego is not easily accessible knowledge. It is not published in the  San Diego newspaper under notices.

If you file for bankruptcy, you must list all of your creditors. Sometimes those bankruptcy creditors might include family and friends who might have cosigned a loan for you. Those bankruptcy creditors will receive notice that you filed. You can find out about a personal bankruptcy on your credit report so some jobs will know filed bankruptcy.  While filing for bankruptcy is not what anyone wants to do, in today’s modern times, many people have filed for bankruptcy.  The last economic storm we went through included many people got caught in the undertow.

However, if you want to keep your bankruptcy filing a secret from your friends or family, the odds are that they may never know. The Bankruptcy Courts and Trustees do not inform others of your bankruptcy filing unless they are in some way related or involved in your case. There is a good chance that many people you know (family, friends, neighbors, co-workers) have filed for bankruptcy in the past and you were unaware. If filing bankruptcy is a viable option for you, embarrassment should not be a barrier to obtaining relief.

bankruptcy means testing Bankruptcy Means Test for San Diego co.

What is the Bankruptcy Means Test?

The Bankruptcy Means Test is a 2005 addition to bankruptcy law. Created as a way of disqualifying petitions for Chapter 7 bankruptcy protection, the bankruptcy means test takes into consideration a lot of complex factors to force more people into Chapter 13 than Chapter 7. The creditors’ lobby loves the bankruptcy means test, because it means they get paid more, and more often than they used to.

If you are starting to do your research about bankruptcy then you should not do an online means test   They’re abysmal.  I have never ever seen one that came out correctly. Not a single one in nearly 10 years has been correctly done. Even getting close isn’isn’t good enough. This is not horseshoes or hand grenades.

San Diego County residents who file bankruptcy

First, the bankruptcy means analysis measures your income against median income in the area. If you earn below the median income, there is a better chance the Chapter 7 will work. Most people in San Diego who are thinking about bankruptcy or at least who I speak to earn more than the proposed income of the means test. However, if your income is higher than the median, the bankruptcy means test becomes much more challenging. Don’t try to figure it out on your own.

I take the time to go through the bankruptcy Means Examination with each person who sits down with me to do a Fresh Start Planning Session. For free. It takes me about an hour, and I do it every day, four times a day. An online bankruptcy means test calculator will not give you the answers you need If you’re online trying to do your own Means Test it is the first sign that you’re in enough trouble that you really need to talk to a good bankruptcy lawyer.

So go ahead, research online. Educate yourself. Then please save yourself and more important the stress and ask a bankruptcy lawyer to qualify you. The Bankruptcy Means Test is also supposed to help determine if you would be able to pay off your debts under Chapter 13 bankruptcy protection. Using the bankruptcy means test, and a couple of other forms and formulae, the court will calculate your disposable income. This is done by mixing fixed expenses and estimates for variable other expenses. If it looks like you can pay off the debts within a three to five-year time frame, you’re in Chapter 13, not a 7. Call me to schedule your Fresh Start Planning Session. You’ll get the answers you need, all you have to do is ask.

Filing bankruptcy san diego

Filing bankruptcy in San Diego

Learn about filing bankruptcy in San Diego

Chapter 7 vs Chapter 13

What is Bankruptcy?  Bankruptcy is a legal petition filed in federal court which you may seek a discharge of a debt when you can’t pay your bills. There are two main bankruptcies for individuals: Chapter 7 and Chapter 13. Most people who are considering filing bankruptcy in San Diego are middle class . They own homes and usually have jobs but, not always. Without talking to a bankruptcy lawyer is is impossible to know if you qualify for Chapter 7 or Chapter 13

Here are the basics of a bankruptcy filing in San Diego:Chapter 7 vs Chapter 13 .

When Should I consider filing Bankruptcy in San Diego ? You should consider filing bankruptcy when you cannot pay your bills or when a particular crisis, such as an illness, accident or loss of employment makes the future payment of your bills very unlikely. Also, if a judgment is handed against you, a bankruptcy may be used to stop the creditor from attaching your assets or wages.

Can bankruptcy stop the collection of tax ?

Taxes are normally given priority and are difficult to erase.As a general rule, if you have an income tax debt that is at least three years old, and you filed your tax returns on time for the year in question, you may be able to discharge all such taxes in a Chapter 7 proceeding. In a Chapter 13, however, that tax debt would be paid in the same way as any other unsecured creditor (i.e., repaid over three years). Payroll taxes (i.e. taxes you failed to withhold from your employees’ pay or withheld and did not pay the appropriate government agency) are generally not dis-chargeable.Bankruptcy will initially stop the collection process but may not eliminate the obligation to pay the taxes. Does a Bankruptcy affect my credit? Yes. Future lenders may consider your bankruptcy when they are deciding whether to loan you money or credit. However, certain laws exist to prevent unlawful discrimination against you just because you filed for bankruptcy. The fact that you have filed for bankruptcy may be carried on your credit records for ten years.

Chapter 7  vs Chapter 13 If I choose Chapter 7 liquidation, do I lose all my assets?

No. Bankruptcy law lets individual debtors keep certain property that is not subject to attachment and execution under state law. These assets include some or all of the debtor’s equity in his or her home, household goods, a car, 401k  retirement plans and numerous other assets. Chapter 7 bankruptcy may enable you to get rid of all your unsecured debts.  In most cases, if you have barely enough to live on, not counting payment of your credit card (and other unsecured) debts, you can make all of your credit card debts go away. If, however, when you look at your monthly budget you have a significant amount of cash left over without paying your credit card (unsecured) debts, you will not be permitted to proceed with a Chapter 7 bankruptcy. Instead, you will be required to file a Chapter 13, also alternatively described as a “debt consolidation” or wage earner bankruptcy. In a Chapter 13 proceeding, the court will require you to pay, usually for three years, all of your disposable income to the bankruptcy trustee, who will in turn pay your creditors. The amount of your monthly payment to the trustee will be approximately equal to the amount of the cash you ordinarily have on hand after you pay your basic necessary living expenses. In many cases, you will not have to pay back everything that you owe. For instance, if you have $100,000.00 in unsecured debt, but you only have $500.00 per month of income available to pay the creditors, your unsecured creditors may receive a total of only $18,000.00 over a period of three years (that’s $500.00 multiplied by thirty-six months)

What is the cost to file a Bankruptcy in San Diego court : Chapter 7 vs Chapter 13 ?

In a Chapter 7, generally your attorney’s fees must be paid up front before the filing. This makes sense because in a Chapter 7 proceeding a promise made before filing the case to pay attorney’s fees after filing makes the promise dischargeable, too. In a Chapter 13, your attorney’s fees can be paid either before the filing or as part of the repayment plan. For Chapter 13 cases, the installment payment plan is the preferred choice of most clients since it requires less up-front cash.The filing costs differ based upon the Chapter of the Bankruptcy you file. Currently, fees are $306.00 for a Chapter 7 and $281.00 for a Chapter 13.

How long does a Bankruptcy take In San Diego : Chapter 7 vs Chapter 13?

Do I have to attend a Hearing? Chapter 7 bankruptcies require you to attend a meeting of creditors. If no objections are filed, the discharge can be entered in approximately 90 days. Chapter 13 bankruptcies take 48 months and may involve a number of hearings over an extended period with both the trustee and the court.

 Where do I file bankruptcy in San Diego

 In the federal bankruptcy district where you have lived for the past 180 days.  If you have not lived in your current District for 180 days, you may file in the district in which you most recently resided for one hundred eighty days or you can take your chances filing where you now live. If you are finally tired for the bill collectors and the stress,Call me 619-235-4095 we can talk.

Chapter 13 Bankruptcy in San Diego Chapter 13 bankruptcy filing a type of bankruptcy that provides you protection from creditors while the outstanding debt is settled through a repayment plan. It can be used to halt  home foreclosure. Filing Chapter 13 in San Diego  is sometimes called the home-saver bankruptcy.  Depending on what the debts […]

do i need to file bankruptcyDo you need bankruptcy ? How do you know when to file?

 

 First of all there are no easy answers , but you probably know that…. Are creditors constantly calling you? Does the thought of opening your mail  stress you out? Are you worried that utilities may be shut off or your car repossessed? Do you lie awake at night because you’re afraid of losing your home? Have you already dipped into savings or, worse, your retirement funds just to pay bills and buy groceries? These are all signs that you might be eligible to file bankruptcy  .

Now, probably more than at any other time in the last fifty years, people are having financial trouble because of events beyond their control, such as recession, layoffs and small business owners suffering acute drop-offs in sales. No one assumes anymore that the need to file bankruptcy is somehow a reflection of the moral character of the person filing. For centuries bankruptcy has been the ultimate relief valve for those in direst of straits. Americans seem pretty unanimous in continuing to believe that bankruptcy is a valid, valuable tool in our economy.  The choice of whether to seek bankruptcy relief is difficult and can be close to
heartbreaking. Many people experience shame and anxiety over filing bankruptcy.  they are sometimes afraid that filing bankruptcy makes them look irresponsible, or like people who don’t want to pay their bills. But the truth is that there is no shame in filing bankruptcy. Some people need bankruptcy, and bankruptcy  law exists to make sure that people having serious financial trouble can survive.

95% of the people who come to my office qualify to file bankruptcy. 

 This is what I have found in my over 20 years of practicing bankruptcy law. By the time a person gets to seeing a  bankruptcy lawyer face to face it is bad. No no wants to come and see a lawyer about being eligible for bankruptcy .

One of the first things you might have done to discover if you are eligible to file bankruptcy is  an online means test.  Big mistake (… really

It is virtually impossible for a middle class person in San Diego with a home and maybe a job  to go online and have any clue if they are eligible to file bankruptcy. There are no easy spreadsheets or lists to help you figure this out.  The process usually takes me about an hour to go over all the issues and questions to really understand are you eligible for bankruptcy. In my practice,we have had  many people who file Chapter 7 who were making a salary of $100,000.00 per year. You might ask, how is that possible?  

There are as many variables to the computation in who and how a person can file for bankruptcy, as choices of cereal at the local grocery store. How much do you owe? How close you are to retirement? Who lives with you? What is your house really worth in San Diego? Who knows that these days? It really does take a professional to figure this out.

One of my practices specialties is taking people who didn’t think they qualified for bankruptcy(or sometimes other lawyers who told it was not possible )and making that happen. Then they can move on with their lives. I am good with the difficult situations,that others can’t seem to figure out. So, if you think it is just not possible to file bankruptcy, or you make too much money or aren’t sure if you qualify. Come down to the office and let’s talk.

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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