Frequently Asked Questions
Why should I hire a Los Angeles Bankruptcy Lawyer?
No Mistakes: Chapter 7, Chapter 11 or Chapter 13 bankruptcy in California can be complicated particularly a Chapter 11. You need to know which to file, when to file, how to handle certain creditors, how and if you can pay back certain debts, and how to handle a myriad of other things. Sometimes filing two separate Bankruptcies, one after the other can be great for your personal situation and only experienced Bankruptcy Lawyers will know when is appropriate.
Creditor Harassment: Once your creditors are informed that you have retained counsel, they cannot contact you. They are told to call your attorney’s office regarding anything including foreclosure proceedings. A good attorney will call any harassing collectors and make an attempt to get the calls to stop. This saves you time and money. Our clients feel an immediate sense of relief.
Protection from uncertainty: There are many particulars that go into a bankruptcy petition. From communications from the court, to the trustees who review your case and even from creditors who want to dispute your filing. Going through this can be stressful. You don’t know how your actions will affect whether your discharge is granted or not. If your petition is not granted it can hinder your ability in re-filing. Your bankruptcy lawyer will know exactly how to proceed. When we tell you, “Everything is on schedule, you are going to be OK,” you can rest assure that it will be.
Protection from what you don’t know: We each do the best we can with the information we have. Paralegals can be great but if you want to get the most from the Bankruptcy Laws you need an experienced Bankruptcy Attorney that has been there before and knows what will work and what will not. For example, a paralegal may be able to file a Chapter 13 but only a Bankruptcy attorney will be able to file a LAM motion and fight aggressively in court to get your $200,000 second mortgage discharged completely. If you file on your own, you are functioning with a lot less information. As attorneys not only can we provide you with the most current legal information within the Bankruptcy code we are also required by law to notify you immediately of any legally related issues that are not within our scope of expertise. This includes real estate issues, tax issues or corporate concerns. In the end being put on immediate notice of issues you do not know can save you money. Period.
What type of Bankruptcy should I be filing?
Most individuals want a “fresh start” from their non-secured debts (such as credit cards, medical bills, judgments) and file a Chapter 7 “Liquidation” Bankruptcy. Chapter 7 is also for business entities that are going out of business.
If you just need time to catch up on your past bills for secured debts like your home mortgage or car payment, then a Chapter 13 “Reorganization” Bankruptcy allows you to pay off those debts over time.
If you have a large net worth or you have a troubled business that you want to save, then Chapter 11 Bankruptcy is for you.
Setup a free consultation today to find out what is best for your situation and what debts you can discharge or catch up on.
How much does filing for Bankruptcy cost me?
A Chapter 7 Bankruptcy is the most common bankruptcy filed where your credit cards and other “unsecured” debts are completely wiped away.
For an attorney representation filing our fee is $1,194 for an individual ($1,694 for a joint filing), and we handle all your documents and court filings. The court filing fee is $306, and credit counseling (required) is around $25. For non-attorney representation, our document preparation fee is $475 and the messenger filing fee (if you can’t file it yourself) is $60.
For a business Chapter 7 bankruptcy, our fee depends on the amount of unsecured debt being discharged and the complexity of the case.
A Chapter 13 Bankruptcy is where you pay off all your debts but over time (payment plan) while incurring zero interest, and unlike Chapter 7, it can pay off your secured debts, thus eliminating the threat of foreclosure as long as you maintain your payments.
For attorney representation our fee is usually $2,000 up front, with another $2,000 paid to the attorney through the monthly payment plan. Chapter 13 attorney’s fees are highly regulated by the Bankruptcy Court, thus Chapter 13 attorneys in Southern California charge about the same rates; you want to got with an experienced firm such as Gomez & Simone.
Our firm (along with most bankruptcy judges) advise debtors to hire an attorney, as it is very rare for a Chapter 13 bankruptcy plan to be approved without the guidance of an attorney.
Chapter 11 Bankruptcy filings are for those with a high net worth or for businesses who want to keep their business open. Filings usually require at least a $10,000 deposit towards attorney’s fees after thorough evaluation of whether filing is appropriate. Chapter 11 is not inexpensive, but sometimes it is the only way for a business to stay in business. Just ask General Motors and United Airlines.
What is “unsecured debts” compared to “secured debts”?
Secured debts are debts that are attached to property such as your car or your home; the creditor is said to have attached a lien on your property. If you fall behind in your payments, the creditor can sell your property to pay off what you owe; this is called “foreclosure.” While “debts” are wiped out by bankruptcy, liens cannot. The exception to this is “junior liens” (such as a HELOC) on your home, that can be wiped out in a Chapter 13 if your home is worth less than the first lien (primary mortgage). The only sure way to stop a foreclosure on the lien is to file a reorganization bankruptcy, such as Chapter 11 or 13.
What is the “Automatic Stay”?
For worried borrowers facing a foreclosure sale date, having their wages garnished or being harassed by calls from bill collectors, the “Automatic Stay” is you best friend. The instant that you file any bankruptcy, an “automatic stay” takes effect. Anything and everything financially and legally harmful to you, such as a foreclosure, wage garnishment, or harassing collection calls, is stopped dead in its tracks. If you file a Chapter 13 and maintain your payments, the automatic stay remains in effect the entire five years that the case is open. If you file a Chapter 7, however, the case only lasts a couple of months. Also, creditors sometimes file motions to terminate the automatic stay even sooner. If that happens, you definitely would want the services of an experienced bankruptcy firm such as Gomez & Simone. If you have filed more than one bankruptcy, you may not have an automatic stay in your next bankruptcy, or it may expire after 30 days; if this is your situation, you would be wise to seek the advice of a bankruptcy attorney such as Gomez & Simone.
Bankruptcy is a Useful Financial Tool for All Americans
Before Donald Trump was rich and famous enough to say “you’re fired,” he appeared in Bankruptcy court no less than four times (1991, 1992, 2004 and 2009). Obviously, the “stigma” of Bankruptcy did not hurt Mr. Trump, who has stated during his 2016 Presidential campaign that there is absolutely nothing wrong with “taking advantage of the laws of the United States.” While he was attacked for these bankruptcy filings early in the campaign, the issue faded away once “The Donald” promptly admitted to the filings and said he had no regrets. If bankruptcy is good enough for Henry Ford, Thomas Jefferson, Mark Twain, Ulysses S. Grant, Larry King (twice), Walt Disney, Willie Nelson, Burt Reynolds, Debbie Reynolds, Kim Basinger, Don Johnson, Tom Petty, Vince Neil of Motley Crue, “MC Hammer,” Wayne Newton, Cyndi Lauper, “Meatloaf,” Toni Braxton, Milton Hershey, H.J. Heinz, P.T. Barnum, Orange County, Chrysler, General Motors, Kmart, Texaco, TWA, Pan Am, US Airways, American,Continental, Delta, Eastern, and Northwest Airlines, and Zenith, then it should be good enough for you. Call Gomez & Simone today so we can explain how we can protect your assets under the Federal Bankruptcy laws.