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Commonly Asked Questions About Bankruptcy

Read our commonly asked questions about bankruptcy and our answers. It is important to be thoroughly informed about how bankruptcy works and what will happen after you file so that you can make the best decision for your financial situation. We are here to help light your path on the way to recovery, so that you can start fresh.

If you are considering filing for bankruptcy, contact the Law Office of Raymond J. Seo right away for a free consultation!

  • Who can file for bankruptcy in California?

    Almost anyone can file for bankruptcy. Under United States laws, there are different chapters of bankruptcy that you can file under for your specific situation.

    • Chapter 7-liquidation bankruptcy for low income individuals
    • Chapter 13- reorganization bankruptcy for anyone who doesn't qualify for Chapter 7
    • Chapter 11-reorganization bankruptcy for businesses or individuals with high assets
    • Chapter 12- bankruptcy for farmers and fishermen

    Working with an attorney can help you determine if your debts exceed your income and find the right chapter for you to file under for your situation.

  • What is Chapter 7?
    Chapter 7 bankruptcy is also known as a liquidation bankruptcy. Under this chapter, all non-exempt assets will be sold to help repay debts. Chapter 7 is most often filed for by individuals who have no other options to repay debts and cannot even make minimal payments to creditors. In order to qualify, you will need to take a Chapter 7 means test. Learn more by visiting our page on Chapter 7 bankruptcy.
  • What is Chapter 13?
    If you do not wish to file for a Chapter 7 liquidation bankruptcy, or you do not qualify for Chapter 7, you can still file under Chapter 13. Under Chapter 13, a bankruptcy court will provide you with a payment plan to repay debts. These plans typically last for about 5 to 7 years and allow you to make minimal payments toward debts while still retaining property and assets. To learn more about this chapter, you can visit our page on Chapter 13 bankruptcy.
  • Will I lose my house / car if I file for bankruptcy?

    Not necessarily. Depending on the chapter that you file under and the amount of debts that you have, you may be able to keep your home and car. In fact, in some situations, you may be able to save your home from foreclosure by filing for bankruptcy.

    If you file for Chapter 7 bankruptcy, you make be able to keep your home or vehicle based on the bankruptcy exemptions you choose. In Chapter 13 bankruptcy, you won't be required to sell any of your assets to pay off your debts. Of course, each situation is different, so it is important that you work with an attorney.

  • How long does bankruptcy stay on my credit score?
    Depending on which chapter of bankruptcy you file under, your credit score could reflect the bankruptcy for up to 10 years. It is important to remember that each person's situation is different and their exact outcomes may vary. In order to get a better understanding for how long it may affect you and your credit, you need to consult the lawyer at our firm. We can also provide you with recommendations about how to improve your credit score after bankruptcy!
  • What will happen to my debts after filing for bankruptcy?

    A few things can happen to your current debts when you file for bankruptcy. Depending on the chapter that you file under, your debts will be either automatically eliminated or discharged after the completion of your payments. Personal debt, or consumer debt, is often the most common debt that is discharged in bankruptcy.

    Some debts, however, will not be discharged in any type of bankruptcy. These include the following:

    • tax-related debt
    • student loans
    • personal injury related to DUI
    • association fees
    • debts to the government (including court fines and penalties)
    • debts for alimony and child support

    To find out what will happen to your debts, contact our office to speak with our bankruptcy attorney.

  • Will my student loans be eliminated?

    Student loans are the highest form of consumer debt in the nation. Unfortunately, as it stands now, bankruptcy cannot eliminate student loans; however, change may be on the horizon. Following the 2005 bankruptcy reforms, legislators and consumer debt advocacy groups are proposing bills and laws that can help reduce the amount of debt that graduated students have accumulated.

    If you have a private student loan or a federal loan and you are facing a financial hardship, we recommend working with an attorney to discuss your options and to gain a better understanding of the potential bankruptcy reforms.

  • Will I have to go to court for bankruptcy in California?

    Every individual who files for bankruptcy must go to the initial court hearing; however, working with an attorney is the best way to avoid multiple court hearings and a long, drawn-out process.

    When you retain our representation, we will work to settle most complications outside of court. If you do need to go to court, the attorney from our team will represent you throughout the entire proceeding.

  • Will I have to go to court for bankruptcy in California?

    Every individual who files for bankruptcy must go to the initial court hearing; however, working with an attorney is the best way to avoid multiple court hearings and a long, drawn-out process.

    When you retain our representation, we will work to settle most complications outside of court. If you do need to go to court, the attorney from our team will represent you throughout the entire proceeding.

  • Can bankruptcy stop creditor calls?

    Yes! The moment that you file for bankruptcy, creditor collection attempts will be forced to automatically cease. In fact, filing for bankruptcy is one of the only surefire ways to be certain that creditor harassment will stop once and for all. It is important to remember that you are protected under the law from unnecessary harassment, and our firm's attorney can help protect your rights!

  • When should I file for bankruptcy?

    If you have exhausted all efforts to eliminate debt, yet you are still burdened by bills, creditor calls and collection attempts, now may be a good time to file for bankruptcy. Even if you are already facing foreclosure or other complications, bankruptcy may be the right option for you.

    Our bankruptcy attorney can assess your situation to make sure that you have exhausted all available options. At our firm, we have had years of experiencing counseling clients to a future with financial stability.

  • Should I work with an attorney?
    Definitely! The bankruptcy laws in California and the United States can be difficult to understand, and you should never attempt to face the bankruptcy court alone. Our bankruptcy attorney can analyze your financial situation and recommend the best course of action. We will find out if you qualify for Chapter 7 bankruptcy and make sure that you get all available exemptions so that your assets are maximized.

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