Los Angeles Bankruptcy Law Attorneys will help you file for Bankruptcy protection, Your Legal Rights!
Federal Bankruptcy Laws
Since the drafting of the Constitution, Congress has enacted federal bankruptcy laws to help protect you.
In 1978, Congress adopted the Bankruptcy Reform Act of 1978, codified in Title 11 of the United States Code, commonly referred to as the Bankruptcy Code, and several times it has been amended since then, most recently in 2005 through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 or the BAPCPA.
Filing for bankruptcy can be a tough decision. New bankruptcy laws make it more important than ever to consult and speak with an attorney. Malhotra and Malhotra can advise you regarding the various forms of bankruptcy, suggest which one best suits your situation and lead you though the various steps.
If you have been served with a Summons for a lawsuit, you need to talk to a lawyer, and fast. Contact Malhotra & Malhotra today to schedule your free consultation with attorney Eva Juarez Malhotra and discuss your options for how to stop a lawsuit. We'll help you prevent a judgment from being entered against you, so you can avoid a bank levy and wage garnishment.
When your bankruptcy lawyer files your bankruptcy petition with the Court, an automatic bankruptcy stay goes into effect by law that will finally put an end to and stop creditor harassment, including harassing phone calls, dead in its tracks. Bankruptcy law places stiff penalties against creditors and debt collectors for any phone calls or other contact with you or your employer once you file bankruptcy. The automatic stay gives you true debt relief by freezing all collection activity against you. Once your creditors are notified of your filing, you should never hear from them again. The harassing phone calls from creditors are stopped and you are finally freed of creditor harassment.
Any creditor who had filed a Complaint/lawsuit in the Superior Court and received a judgment against you, including a credit card lender, medical service provider, HOA, or any other type of creditor, can do a bank levy. A bank levy process is a legal procedure by which a creditor empties out all of the money from your bank account in repayment of a debt, and without prior notice. The bank levy process is very similar to the wage garnishment process in that your money is forcefully taken from you, against your will. Depending on the amount of money in your bank account at the time of a bank levy, a bank levy can actually be much worse than a wage garnishment. With a wage garnishment, 25% of your earnings are deducted each pay period and sent to your lender. With a bank levy, 100% of the money in your bank account, up to the amount of your debt, is taken out of your bank account. A bank levy order directs the sheriff to seize the money in your bank accounts in repayment of your judgment debt. The sheriff serves the bank levy order upon one or more banks at which you hold accounts. Once the sheriff delivers the bank levy order, your bank account funds are frozen and your bank will take the money in your accounts and hand it to the sheriff.
Unfortunately, you don't receive notice of a bank levy until after your bank account funds are frozen. Neither you nor your lawyers will receive advance notice of a bank levy in California. If you or your attorneys had advance notice, you would simply go and empty out your bank account, rendering the bank levy process a useless collection mechanism. For this reason, you only find out about a bank levy after your bank account funds are frozen.
A wage garnishment is a legal process by which one of your creditors has begun taking your wages that you receive from employment, in repayment of a debt that you owe. Your employer is ordered to deduct a certain amount of money from your paycheck, each pay period, and hand the money over to your creditor. In California, any one of your creditors can garnish your wages. A credit card lender can file a lawsuit , obtain a judgment against you and obtain a wage garnishment, medical providers can do a garnishment for unpaid medical bills, your Home Owner Association can do a garnishment to collect HOA dues, and most people are aware that the IRS can and will do a garnishment. Virtually any other creditor can do a wage garnishment. Under certain circumstances, the federal government can even garnish your social security income.
Once wages are garnished, the sheriff will hold on to the garnished wages for a short period of time, the sheriff will notify all interested parties and give them an opportunity to object to the wage garnishment. The only way to stop a wage garnishment immediately is to retain the services of an attorney and file for bankruptcy protection. Filing bankruptcy will stop a wage garnishment. The moment your bankruptcy case is filed in Court, all wage garnishments stop. An automatic bankruptcy stay goes into effect immediately and stops all adverse collection action against you, including a wage garnishment.
If your employer has been recently served with a wage garnishment order, it is important that you contact an experienced bankruptcy attorney immediately. Your bankruptcy will take a few days and possibly longer to prepare, and until your bankruptcy case is filed, your wages will continue to be garnished.
Once a wage garnishment order is served by the sheriff, your employer must then deduct from your wages and pay to the sheriff a percentage (usually 25%) of your wages each pay period. The sheriff, in turn, hands the money to your creditor in partial repayment of your debt each pay period until paid off in full.
Chapter 7 is the most common type of bankruptcy and completely eliminates your dischargeable debts forever. It allows individuals or businesses to eliminate credit card debt, judgments, medical bills and other types of debt and move forward. Most of the time you will be able to keep all your real and/or personal property. Chapter 7 also allows owners of failed businesses to close down their operations quickly and efficiently.
Once it becomes clear that a bankruptcy filing should take place, the question of the best time to file arises. Our job is to identify potential risks in any bankruptcy filing and allow the client to make a decision as to whether or not the potential risk justifies the filing of a bankruptcy petition. There are many instances where we advise potential clients not to file bankruptcy.
Certain debts cannot be discharged through Chapter 7 bankruptcy, such as student loans, child support, alimony, most taxes, and personal injury damages while intoxicated.
What Is Chapter 7 Bankruptcy?
A Chapter 7 Bankruptcy is a liquation and discharge of debts for property. In a Chapter 7, the Bankruptcy Code allows the debtor to keep certain property and has created specific exemptions.
One of the benefits of a Chapter 7 is that a debtor may be able to discharge all of their unsecured debts while still continuing to make their house payments by reaffirmation agreement and thus keep their home.
Do I Qualify for a Chapter 7 Bankruptcy?
To qualify a debtor may be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. §§ 101(41), 109(b). In addition, an individual debtor must qualify under the means test. Also, an individual cannot file for Chapter 7 Bankruptcy unless they have received credit counseling from an approved credit counseling agency either in an individual or group briefing within 180 days before filing,. 11 U.S.C. §§ 109, 111.
In addition to the above, an individual cannot file for Chapter 7 if they had a prior bankruptcy petition that was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens within the past 180 days before the filing. 11 U.S.C. §§ 109(g), 362(d) and (e). While there are exceptions to the rule it is important to speak with a bankruptcy attorney who can do the research to determine if you will qualify.
How Does Chapter 7 Bankruptcy Work?
After all the necessary paperwork is filled out it is filed with the court. The court will then assign a trustee. Approximately 30 days after the filing there is a meeting of creditors (referred to as the 341a hearing). At this hearing the debtor brings their driver’s license and original social security card. If everything is in order the debtor will normally receive a discharge shortly thereafter.
A Chapter 7 Bankruptcy is different from other bankruptcy filings because the debtor usually discharges all of their debts and the debtor need not make any payments to the trustee.
The big plus of filing a Chapter 7 Bankruptcy is that the debtor receives a discharge on all dischargeable debts. The bonus of filing a Chapter 7 Bankruptcy is that by signing a reaffirmation agreement a debtor may be able to keep certain assets such as their car or house that has a loan on it by signing the agreement and continuing to pay for the car loan or a mortgage on their home.
Who Can File For A Chapter 7 Bankruptcy?
In order to file for a Chapter 7 Bankruptcy you must make under a certain amount of money taken into consideration with the number of people in your household. If you make more than that amount you may still qualify for a Chapter 7 Bankruptcy if you meet the means test.
By law, you cannot file a Chapter 7 for 8 years, but you are allowed to file a Chapter 13 after four years of the Chapter 7 being discharged.
Only an individual (or couple) can file Chapter 13. Corporations or other businesses cannot be a Chapter 13 Debtor. Most of the time, people file Chapter 13 because:
They are behind on their house payment and are facing foreclosure. Chapter 13 will stop the foreclosure sale and allow you to repay the amount you are behind over a three to five year period.
They owe a large amount of tax debt, which can be repaid interest free over a three to five year period.
They have assets that have too much equity that cannot be protected in a Chapter 7 filing.
Their income prevents them from filing a Chapter 7.
In a Chapter 13 you must pay recent tax debt and any past due mortgage payments in full through the repayment process. Other type of debt can be reduced by paying a discounted amount over time.
Currently, Chapter 13 allows individuals to reduce or eliminate second and other junior mortgages. The stripping of liens is not available in Chapter 7. If your first mortgage is equal to or greater than the value of your home, the Bankruptcy Court may issue an order whereby all junior liens are stripped or removed from your home, thus making it unsecured debt.
By providing you with personal attention, we will provide you with solutions to resolve your bankruptcy concerns as quickly and as economically feasible as possible.
We are a debt relief agency.
We help people file for bankruptcy relief under the Bankruptcy Code.
Call us today at 1 (562) 806-9400.