Monthly Archives: October 2010

If you are considering filing bankruptcy, then you should file bankruptcy before Christmas.

The reason that I say that is because any debts that you charge on your credit card for Christmas shopping will be presumed to be non-dischargeable.  Bankruptcy law states that any charges made 0-90 days prior to filing bankruptcy is non-dischargeable.  Any charges made 90-180 days MAY or MAY NOT be dischargeable depending on whether or not they are necessities.

So anything that you purchase in the 3 months leading up to Christmas will not be dischargeable.

So why don’t you go ahead and get your bankruptcy started now, that way you can have a fresh start going into the new year?

For more information regarding California Chapter 7 bankruptcy, contact our Los Angeles California Bankruptcy Attorney.

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Let’s say you file for bankruptcy and get the benefit of the automatic stay.  You’ve got a mortgage or a car loan so when you file for bankruptcy the lender can’t repossess or foreclose.

But you stop paying the car loan or mortgage.  They need to take action (or so they say).  How do they do it?

A creditor can ask a bankruptcy judge to lift the automatic stay, but they must prove at a hearing that there’s a good reason to do so.  An example would be when you have no equity in the property or when the property is not insured.  Another example might be when a creditor needs to continue a lawsuit in order to pursue your insurance coverage (if you’ve been in a car accident and the insurance company has not paid the claim, the car lender will need to take action).

When the judge orders that the automatic stay is lifted, such action does not automatically give the creditor ownership of the property.  It merely allows them to pursue their out-of-bankruptcy remedies to foreclose or repossess the property.

For more information regarding chapter 7 bankruptcy in California, click here.

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Automatic Stay

The filing of a bankruptcy case, under any chapter of the Bankruptcy Code, triggers an injunction against the continuance of any action by any creditor against the debtor or the debtor’s property.  11 U.S.C. 362.  

In Chapter 13, the stay even protects co debtors who are liable with the debtor on consumer debts.

The automatic stay gives the debtor protection from his creditors, subject to the oversight of the bankruptcy judge, and brings all of the debtor’s assets and creditors into the same forum, the bankruptcy court, where the rights of all concerned can be balanced.

The ’05 amendments to the Bankruptcy Code instituted limitations on the duration of the stay in the case of repeat filers: debtors who had a prior case pending in the last year which was dismissed get a stay of 30 days; debtors with two or more cases pending in the past years but they were dismissed get no stay at all. The debtor in those situations must seek a stay from the court in order to have the protection of the automatic (or not so automatic) stay.

Prohibited acts

The automatic stay prohibits 

• Beginning or continuing civil law suits
• Collection calls
• Repossessions
• Foreclosure sales
• Garnishment or levies

The automatic stay remains in effect until

• a judge lifts the stay at the request of a creditor;  
• the debtor gets a discharge; or 
• the item of property is no longer property of the estate.  

Thus in Chapter 7, the stay may prevent immediate foreclosure on a debt secured by real estate but the stay will expire, and the creditor freed to proceed,  when the debtor gets a discharge.  (This assumes that there is no non exempt equity in the property for the bankruptcy estate.) In Chapter 13, the stay remains in effect for the life of the Chapter 13 plan.

Stay is permanent upon discharge

When the debtor gets a discharge, the automatic stay is replaced by a permanent injunction prohibiting creditors from all of those actions with respect to discharged pre petition debts that the automatic stay prohibited. 

Outside the stay

The automatic stay does not stop the following:

• Criminal proceedings
• Actions for a family support order or the modification of such order
• Actions to collect support from property that is not property of the estate
• Tax audit, demand for tax returns or assessment of tax (collection of tax is still stayed:  the tax authorities, to their chagrin, are subject to the stay, just like other creditors).

Violations of the stay

Anyone who willfully violates the stay in the case of an individual  is liable for actual damages caused by the violation and sometimes for punitive damages.  Some courts confine the right to damages to individual debtors and  deny damages for stay violations as to corporate debtors.  

Since the court usually takes several days to several weeks to mail creditors notice of the bankruptcy, it is incumbent on the debtor or debtor’s counsel to give actual notice to creditors who might take action without knowledge of the stay.

Creditor actions taken after the stay is in place are generally void or voidable:  that is, any action the creditor takes in violation of the stay has no legal effect.

To learn more information regarding California Chapter 7 bankruptcies, visit my website.

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10 EASY TIPS TO HELP YOU PREPARE FOR BANKRUPTCY.

1. Make sure your taxes are filed and up to date.

2. Create a folder to throw all credit card bills, collection notices & lawsuits into.

3. Create a folder to throw all your paystubs or benefit statements into.

4. Stop using your credit cards, payday loans & personal lines of credit as soon as possible.

5. If you have a bank account where you have also have debt you’ve defaulted on, open a new account at a new bank.  Do this ASAP.

6. Create a folder to throw all your monthly expenses into. Those include electricity, gas, food, cable, phone, etc.

7. If you’re sued, don’t waste money on filing an Answer. Put the money towards getting your bankruptcy filed sooner.

8. Stop making payments to creditors of all unsecured debts, like credit cards, payday loans and personal loans.

9. Continue making payments for houses and cars you wish to keep.

10. Make sure you have a current driver’s license and copy of your social security card.To get the bankruptcy process started visit our website and fill out our questionnaire to see if you qualify.

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Generally, bankruptcy is better for people who:

*Are older and will have less time to pay off their debts and also save for retirement

*Are young and have huge debts, but expect a very bright future.

*Have large ccredit card and other debts relative to their income, so large that they will never be able to pay them off.

*Have few assets outside what is exempt under state or federal law.

*Have reached rock bottom financially, and are starting to see the light at the end of the tunnel.  After all, you don’t want to blow your rare chance to file for bankruptcy by incurring tons of debts after you have filed.  You need to time the case correctly.

If you need to file for a California chapter 7 bankruptcy.  Contact the Law Offices of Chirnese L. Liverpool by visiting our website or calling us at (818) 714-2200

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