Common Bankruptcy Questions About Creditors

LA Bankruptcy FAQ and Bankruptcy Attorneys

A creditor has demanded payment after I have filed for bankruptcy, what can I do?

This is where the automatic stay protects the debtor. An automatic stay is a process in bankruptcy law that halts actions by creditors (with certain exceptions) to collect debts from an individual who has declared bankruptcy. If a creditor attempts to repossess your property without the permission of the bankruptcy court, after your case has been filed, it becomes a violation of the automatic stay. If a creditor takes possession of property you own (a vehicle for example), they must return it immediately.

The court has the ability to punish creditors who deliberately violate the automatic stay and the creditor is liable to the debtor for harm caused!

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Los Angeles Bankruptcy Conversion Basics

Los Angeles bankruptcy conversions

Can I Convert From One Bankruptcy To Another?

Yes.

One of the first considerations a person must make when deciding to file for bankruptcy is which specific chapter they wish to file under. A problem that sometimes occurs is when a debtor has filed for one type of bankruptcy, but under unforeseen circumstances must convert to another bankruptcy. This is called a bankruptcy conversion.

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Secured Vs Unsecured Debt

Bankruptcy for Secured and Unsecured Loans

Filing Bankruptcy Can Discharge Secured and Unsecured Loans

Before a lender makes the decision to loan money to an individual, they must evaluate a consumer’s credit history. Once the preliminary screening has been done, the lender has a choice to lend to consumers under two main categories: secured and unsecured debt. It is important to understand the differences between secured and unsecured debt if you are planning on applying for a loan, or filing for bankruptcy, so you can understand what financial options are available to you.

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Student Loan Debt Forgiveness

Filing Bankruptcy for Student Loan Debt

Student Loans and Bankruptcy

In Bankruptcy law, there are many myths about what you can and cannot discharge when filing for bankruptcy. One of the biggest myths in bankruptcy today is that when you file for bankruptcy and attempt to have your debt discharged, student loans are impossible to discharge. While student loans are typically exempted from discharge, it is possible to have the Bankruptcy Court make a determination that the student loans pose an undue hardship.

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Chapter 7 vs. Chapter 11 Bankruptcy

Los Angeles Bankruptcy Attorney

Talk to a Los Angeles Bankruptcy Lawyer

When faced with debt and the inability to pay back all creditors, American citizens or businesses are able to file for bankruptcy based on their financial situation. Chapter 7 bankruptcy is, in general, an overall liquidation of assets, while Chapter 11 bankruptcy is a basic reorganization or rehabilitation bankruptcy. Chapter 7 bankruptcies often result in a Chapter 7 Trustee attempting to sell off a Debtor’s assets to pay off creditors, while Chapter 11 leaves an individual or corporation in control of their assets and allows them to negotiate with creditors to alter or cure the loan payment terms, in an attempt to have debts paid back without forcing a liquidation of assets.
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Can You File Bankruptcy on Taxes Owed

can bankruptcy cover irs taxes

Filing Bankruptcy to Stop the IRS

If you have past due federal taxes and the IRS has begun the collection process, filing for bankruptcy may be a viable option. If you decide to pursue bankruptcy to settle your tax debt, several steps must first be taken.

  1. You you should  file all required tax returns for tax periods ending within four years of your bankruptcy filing.
  2. While your bankruptcy is underway:
    • You must continue to file all necessary returns.
    • You need to pay all current taxes as they are due.

Not all tax debts are dischargeable through bankruptcy. Older income tax obligations with a return due within the past three years are more likely to be discharged. A Chapter 7 bankruptcy wipes out your dischargeable tax debts, with the exception of priority taxes. If you owe priority taxes Chapter 7 bankruptcy will only provide you with temporary relief from IRS collectors while the automatic stay is in effect.
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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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I had many doubts at first

I had to post this. I have been working with URE Law Firm for over 1 year now. I did Bankruptcy 13 and it saved my HOME! All I can say is that the customer service I am still getting is AWESOME. They don’t just work with you while you are going through Bankrupt they still help you down the line. Patty and Yolanda are awesome they keep you up to date with any letters they receive. If you need a Bankruptcy Attorney don’t think twice about URE Law Firm!
– Diane, updated post, 1/23/2015

I was days away from loosing my home and now I am one happy Client!!! I had many doubts when I first did the BK-13. My home is now saved and I can now start fresh thanks to this Attorney and his assistant Patty. I have been approved and I could not have done it without these people!
-Diane, updated post, 3/31/2014

I hired this Attorney back in November. I was very scared about many things and honestly, they were really great with me. I had many attorney letters coming through the mail and called everyone of them. When I spoke with Patty with URE, I can honestly say I felt like this office knew what they were doing and did not beat around the bush. I will highly recommend this office to anyone, you can call for yourself!!
– Diane, Chapter 13 bankruptcy