You’ve got questions about bankruptcy in Los Angeles area, but you want to get some answers before you talk with a lawyer.
Fair enough. So take a few minutes and spend some time with this, The Ultimate Guide For Filing Bankruptcy In Los Angeles.
How To Use This Guide
Los Angeles is a big place, with lots of attorneys who practice in the field of bankruptcy – but getting the right answers isn’t always easy. Attorneys won’t often have the time to sit with you for hours on end, nor is it always easy to know your questions until you have basis of knowledge. If you’re in Los Angeles and need to get out of debt, bankruptcy may be right – or maybe not.
So here’s everything you need to know about bankruptcy in Los Angeles.
Over the years I’ve written a fair amount about bankruptcy and other ways to end your bill problems. Some of what’s written here is taken from those writings, and other times I’ve chosen to give you links to where you can find more information on your own.
If there’s a link here, I’ve personally tested it to make sure that nothing bad is going to happen your computer if you click it. In addition, every link will open in a new tab or window so you don’t lose this page.
Fair warning, though: this is going to take you awhile to get through. If you’d rather sit down and talk with me by phone about your problem and whether bankruptcy can help you, we can help.
Bankruptcy – The Basics
When you’ve got more bills than you can pay according to the terms of the original contracts, you’re in financial difficulty. Los Angeles is an expensive place, so it shouldn’t be a shock that lots of people around you are in this position.
That doesn’t mean you need to file for bankruptcy. That means you’ve got a budgeting issue.
When you tackle those budgeting issues and realize that there’s not enough money coming in on a monthly basis to pay the bills, you’re considered insolvent. You have three options:
- make more money;
- spend less money; or
- reorganize your financial situation to get rid of some bills and restructure others.
For over 100,000 people in Los Angeles every year, the first and second options don’t work out so well. That’s when reorganizing and restructuring start to make sense.
When you do that on your own, it’s called a workout. When you get the legal system involved to force everyone to work with you, that’s called bankruptcy.
Types Of Relief Offered By The Bankruptcy Laws
The U.S. Bankruptcy Code is a single document that reflects the big picture of balance the desires of creditors to get paid with the ability of the person who owes the money (called the debtor) to meet those obligations. In spite of what you may have been told, bankruptcy is not a question of honesty or morality – it’s a legal way of altering the terms of a contract between a creditor and a debtor.
Within the U.S. Bankruptcy Code are options for people to work through their bill problems. Most people in Los Angeles choose to get relief under Chapter 7 or Chapter 13, each offering slightly different protections.
In a big picture, Chapter 7 involves wiping out many of your obligations whereas Chapter 13 provides for repayment of certain debts over a 3-5 year period. Each offers benefits for different situations, and the choice you make is an important one.
Here are my overviews of the two major types of bankruptcy relief:
Should You Hire A Lawyer?
I admit, I’m biased when it comes to hiring a lawyer to help with your bankruptcy case. That’s not simply because I am a lawyer, but also because I’ve seen too many people save money by hiring a non-lawyer only to get into hot water later on.
Here are some things to know about working with a non-lawyer for your bankruptcy case:
- What Is A Bankruptcy Petition Preparer?
- The Dangers of Filing for Bankruptcy Without a Lawyer
- How To File For Chapter 7 Bankruptcy Without A Lawyer
- Filing For Bankruptcy Without A Lawyer – Scams Abound In Los Angeles
Deciding Which Type of Bankruptcy Relief Is Best For You
As I mentioned earlier in this Guide, there are two major types of bankruptcy protection. Deciding which is right for you depends on some of these questions:
- Whether you qualify for Chapter 7 bankruptcy based on your household income;
- Whether you’d be forced to surrender anything you own if you file for Chapter 7 bankruptcy;
- Whether you’d be financially able to make the monthly payments called for in a Chapter 13 Plan;
- Whether you can get rid of your second mortgage in a Chapter 13 bankruptcy; and
- Whether you can lower the interest rate on your car payment, lower the balance due on the loan, or both.
A few articles that will help point you in the right direction are:
- How To Find Out If You Qualify For Chapter 7 Bankruptcy
- California Bankruptcy Exemptions
- California Homestead Exemption
- Getting Rid Of Your Second Mortgage In Chapter 13
- Can You Make Your Car Lender Cry?
The Bankruptcy Process
Though bankruptcy is federal law, the actual practice varies from place to place. Rules are set by individual courts, so filing for bankruptcy in Los Angeles is exceptionally different than doing so elsewhere.
That said, the basic process is fairly standardized. From start to finish, here’s what you should expect to occur:
- compile documents;
- complete the mandatory pre-filing credit counseling certification;
- draft your bankruptcy petition, schedules and related statements (if you’re going into Chapter 13, your Chapter 13 Plan needs to be drafted);
- file your bankruptcy case electronically;
- attend your Meeting of Creditors;
- complete the mandatory pre-discharge financial management certification;
- receive (assuming no difficulties in your case) your Discharge of Debtor.
If you’re going through a Chapter 13 bankruptcy you’ll also need to appear at a Hearing on Confirmation.