Top 10 Bankruptcy Myths

  1. People who file for bankruptcy are financially irresponsible.

    FALSE

    • Individuals and corporations file for Chapter 7, Chapter 11, or Chapter 13 bankruptcy for a large variety of reasons.  These reasons are often related to unexpected, and, in many cases, unpreventable, expenses.
    • For example, individuals may need to file bankruptcy due to unexpected medical bills or a sudden death in the family.  Filing for bankruptcy can also often be necessary after a divorce.
    • Corporations may need to file commercial bankruptcy under Chapter 7 or Chapter 11 because one of their largest customers suddenly went out of business or business slowed down due to sudden changes in their industry such as the financial meltdown in 2008.
  2. Bankruptcy discharges all past debts

    FALSE

    • Not all debts are discharged in bankruptcy.  Certain debts receive a priority in bankruptcy proceedings such as: IRS and Franchise Tax Board liens against real property or certain IRS and Franchise Tax Board debt that was incurred within the last 3 years.
    • Other Debts that cannot be discharged include certain claims for past wages owed to employees, domestic support obligations such as alimony and child support, certain fines or penalties owed to the government, and debts related to fraud or other types of wrongdoing.
    • This is not a complete list of all debts that cannot be discharged in bankruptcy.  For specific questions on whether or not a specific debt can be discharged in bankruptcy, speak to a Los Angeles bankruptcy attorney today.

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Bankruptcy Court Fees

Bankruptcy Filing Fees Increased June 1st, 2014

Filing for bankruptcy is an important step many people take to protect themselves from creditors, while also giving them the opportunity to retake control of their financial state. As of June 1st, 2014 many bankruptcy filing fees have changed and increased. The list below was compiled to help keep those curious about filing for bankruptcy up to date.

Petition Fees Increased New Costs Effective 6/01/2014
Chapter 7 Bankruptcy Filing Fees $335
Chapter 9 Bankruptcy Filing Fees $1,717
Chapter 11 Bankruptcy Filing Fees $1,717
Chapter 11, Railroad Filing Fees $1,550
Chapter 12 Bankruptcy Filing Fees $275
Chapter 13 Bankruptcy Filing Fees $310
Chapter 15 Bankruptcy Filing Fees $1,717

As petition fees have increased, so have the conversion fees. These conversion fees are applied when an individual or corporation has decided to convert from one type of bankruptcy to another. To note, not all conversion fees have increased.
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