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Bankruptcy FAQs

Orange County Bankruptcy Attorneys

1. Can I wipe out all my bills & debts in a Chapter 7.

Typically, yes! All of your credit cards debt, medical bills, and income taxes over 3 years old may be discharged in a Chapter 7 Bankruptcy. A Chapter 7 will give the honest debtor a “fresh start. Debts that are not dischargeable include student loans, income taxes less than 3 years old, child & spousal support and criminal penalties and fines.

2. Will I lose any property in Chapter 7, like my retirement or pension plan?

Generally no, as California law gives you "exemption" protection over most types of property unless you have large amounts of equity. Pension plans are completely exempt under the law. Other retirement accounts can generally be protected in their entirety. It is important to seek competent legal advice to make sure that you do not place your property at risk.

3. How do I stop the bill collectors from calling?

Upon the filing of the Chapter 7 bankruptcy, there is an “automatic stay” which prohibits any further collection efforts. If a creditor violates the automatic stay, said creditor may be sanctioned by the Bankruptcy Court. The Automatic Stay will promptly stop any telephone calls from creditors. In addition, it will stop any foreclosure or repossession.

4. Does my spouse also have to file bankruptcy?

No. Oftentimes, all the debts are in the name of one spouse. By filing only on behalf of the spouse that is named on the debts, the non-filing spouse’s credit will not be effected.

5. Can I be fired from my job for filing bankruptcy?

No. The U. S. Bankruptcy Law specifically prohibits discrimination based upon a debtor filing for protection under the bankruptcy laws.

6. Will I be able to keep my home in a Chapter 7 bankruptcy?

Your home is protected under California law if you are single and have less than $75,000 of equity, if you are married and your equity is less than $100,000, and if you are over 65, or disabled, and you have less than $150,000 of equity. It is important for you to contact the Law Offices of Joseph M. Tosti so that you can be advised as to whether your home would be protected. If you have too much equity in your home, a Chapter 13 will allow you to force your creditors to accept a payment program.

7. Will I be able to keep my car after I file for bankruptcy?

In the vast majority of cases, there will be exemptions that will protect your vehicle or vehicles.

8. If I am financing my car, do I have to continue making the monthly payments?

If you want to keep your vehicle, it will be necessary for you to continue making the monthly payments. In a Chapter 7, you have the right to return the vehicle to the finance company if you do not want to keep your car.

9. Will my credit be ruined for 10 years after the bankruptcy?

The bankruptcy will be the first step in re-establishing your credit. Typically, the debtors credit is ruined, or about to be ruined, at the time the debtor seeks legal advise. The Chapter 7 bankruptcy will discharge all outstanding debt and the credit reports will reflect that the outstanding debt is reduced to $0.00. The average debtor is typically able to re-establish good credit within 18 to 30 months. If you have sufficient income after the bankruptcy, you will be able to buy a house 24 months after the bankruptcy per FHA requirements.

Contact an Orange County bankruptcy attorney from The Law Offices of Joseph M. Tosti, APC if you are considering filing bankruptcy or need other debt-relief solutions. Call now at (949) 245-6288.

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