How Can I Avoid Bankruptcy in California?

Facing financial difficulties can be overwhelming, especially when bankruptcy seems like the only option. However, with careful planning and proactive measures, you can avoid bankruptcy and regain control of your financial situation. In this blog post, we will provide you with nine essential tips to help you avoid bankruptcy in California.

1. Assess Your Financial Situation

The first step towards avoiding bankruptcy is to thoroughly assess your current financial situation. Take a detailed look at your income, expenses, assets, and debts. Understanding the full picture will enable you to identify areas where you can make adjustments and develop a plan to improve your financial standing.

2. Create a Realistic Budget

One of the most effective ways to avoid bankruptcy is by creating a realistic budget. Start by evaluating your income and expenses, and identify areas where you can cut back. Prioritize essential expenses such as housing, utilities, and groceries. Cut back on discretionary spending and identify areas where you can reduce costs. Consider eliminating unnecessary expenses and find ways to save money, such as cooking at home instead of eating out or canceling unused subscriptions.  By adhering to a well-defined budget, you can allocate funds toward paying off debts and building an emergency fund, ultimately preventing financial instability.

3. Increase Your Income

Boosting your income can significantly improve your financial situation and help you avoid bankruptcy. Consider taking on a part-time job, freelancing, or starting a side business. Evaluate your skills and passions to identify opportunities that align with your expertise. The extra income can be used to pay off debts faster or build an emergency fund for future financial security. Additionally, you can sell unused items or rent out a spare room to generate extra income. Every additional dollar earned can help you avoid bankruptcy.

4. Negotiate with Creditors

If you’re struggling to make payments on your debts, don’t hesitate to reach out to your creditors. Many creditors are willing to negotiate new payment terms, lower interest rates, or even settle for a reduced amount to avoid the possibility of you filing for bankruptcy. Explain your financial situation honestly and provide them with a proposed repayment plan that you can afford. Open communication can often lead to more manageable debt repayment plans.

5. Seek Credit Counseling

Credit counseling agencies can provide valuable guidance and assistance in managing your finances. They can offer personalized advice, help you create a debt management plan, and provide educational resources to improve your financial literacy. Non-profit credit counseling agencies approved by the Department of Justice’s U.S. Trustee Program can offer reliable assistance and support.

6. Explore Debt Consolidation

Debt consolidation involves combining multiple debts into a single loan with more favorable terms. This can simplify your repayment process and potentially lower your overall interest rates. Research different consolidation options, such as personal loans or balance transfer credit cards, and carefully consider the associated costs and benefits. Keep in mind that debt consolidation should be approached cautiously to avoid accumulating additional debt.

7. Explore Debt Settlement

Debt settlement involves negotiating with creditors to settle your debts for less than the full amount owed. Typically, this process begins when you are unable to make your monthly payments and have fallen significantly behind on your debts. Instead of continuing to struggle with payments or considering bankruptcy, debt settlement offers a potential solution to reduce your overall debt burden.

8. Protect Your Assets

California has specific bankruptcy exemptions that safeguard certain assets from being seized to repay debts. Familiarize yourself with these exemptions and take appropriate measures to protect your assets. Consulting with a qualified California bankruptcy attorney can provide valuable guidance on how to safeguard your property, retirement savings, and other assets within the limits of California’s exemption laws.

9. Seek Professional Financial Advice

When facing financial difficulties, seeking professional advice can be invaluable. Consult with a reputable financial advisor who specializes in debt management. They can help you analyze your financial situation, provide personalized advice, and guide you toward the best course of action. Additionally, they can offer alternatives to bankruptcy, such as debt consolidation or debt settlement.

How can I stop wage garnishment?

If you are facing wage garnishment from a creditor, Kostopoulos Bankruptcy Law wants to help you learn how to put an end to the financial strain and embarrassment it might be causing. Wage garnishment means that your employer is withholding a certain amount of your paycheck and providing the funds to a creditor to whom you owe a debt. How can you stop wage garnishment in California and find relief from debt collectors?

The answer is bankruptcy. When you file for bankruptcy, collection activities are halted by what is called an automatic stay. Creditors are prohibited to continue any wage garnishment or other debt collection actions under an automatic stay. If they wish to resume, they may petition the court to lift the stay, but only if they have a valid reason for doing so. If the debt is discharged through the bankruptcy filing, creditors may not continue wage garnishment after your case has been concluded.

Important notes about wage garnishment and bankruptcy include:

  • Child support or alimony payments that are being garnished from your wages are not covered under the automatic stay
  • Under certain conditions, you may be able to recover wages that have already been garnished within a 90-day period before filing
  • If your bankruptcy claim is dismissed and the debt for which your wages are being garnished has not been discharged, the creditor may continue with wage garnishment
  • There is a chance that creditors may not be alerted of the bankruptcy filing in time to halt garnishments, so you should also alert your company’s payroll department and your local sheriff’s office

To learn more about how to stop wage garnishment in California, contact our Oakland bankruptcy lawyers at Kostopoulos Bankruptcy Law. We can discuss your legal options in a free consultation. Get started by calling us today!

Can I file Bankruptcy while in the Military?

Those in the military have the same right as any to file for bankruptcy relief and actually enjoy certain benefits over civilian debtors. On the other hand, filing for bankruptcy can also affect your security clearance in some situations.

Service members are offered federal protection in civil actions thanks to the Service-member’s Civil Relief Act, or SCRA. This act allows courts the right to put a stay or postpone bankruptcy and non-bankruptcy proceedings being taken against military personnel while they are on active duty. These protections are separate from the automatic stay normally provided by bankruptcies.

Exemptions from Means Testing

Normally, those looking to qualify for Chapter 7 bankruptcy need to pass a means test in order to disqualify those debtors who have enough disposable income to repay part of their debts from filing for bankruptcy. Disabled veterans, however, who have debts which were incurred mainly while on active duty, are not required to complete such a means test to qualify for Chapter 7.

Furthermore, National Guard members and reserve units of the armed forces who were called up for at least 90 days after September 11, 2001 are also excluded form a Chapter 7 means test while on active duty and for 540 days afterwards. Those who qualify must still complete the means test form no more than 14 days after the beginning of the 540-day exclusion period.

While your security clearance will not be affected automatically by filing for bankruptcy, it can factor into a decision regarding your clearance along with your job performance and relationships with superiors and coworkers.

Clearance decisions are made on a case by case basis but having a considerable amount of debt can be seen as a negative to your superiors. You should inquire into how your clearance may be affected before you even file for bankruptcy.

Kostopoulos Bankruptcy Law, our Oakland bankruptcy lawyers help clients in financial distress make important and positive decision to help manage their debt. If you are in the military currently or a veteran, speak with our firm for legal counsel!

Can I Buy a Vehicle After Filing for Chapter 13 Bankruptcy?

After filing for bankruptcy, it almost feels like all big purchases are off limits. After all, your finances just underwent an intense amount of scrutiny and passed through the ringer, so to speak. While bankruptcy can make it more difficult to purchase items such as a car or a home, it’s certainly not impossible.

Can I Get an Auto Loan with an Open Chapter 13 Case?

Those who are looking to purchase a new car with an active Chapter 13 case are able to get a car loan under certain conditions.

There are two options to purchasing a vehicle after Chapter 13:

  • Wait for your bankruptcy discharge which doesn’t occur until the end of your repayment plan
  • Request permission from your trustee to take out a car loan before your discharge

The first option may take longer, but the second one can be infinitely more difficult. Many lenders are hesitant to give you a car loan if they know you just filed for bankruptcy and there are companies just looking to scam you out of your money.

Tips to Getting a Car Loan While in a Chapter 13

  • Plan and budget. Make sure that a monthly car payment is within your budget and won’t affect your ability to pay your payment plan. Stick to a reasonable vehicle that is affordable.
  • Review the options at your own bank first. If they’re unwilling to lend to you, it’s time to do your research. An attorney can simplify the process for you and may be able to recommend a trusted lender. You should also research your options thoroughly before signing any papers; the last thing you want is more financial trouble.
  • Be aware of guaranteed loans despite credit scores, wire transfer requests, and requests for fees right when you sign up. You can also check with the Better Business Bureau for further verification.
  • Get approval from the court. After you have a car loan lender, it’s time to obtain approval from the bankruptcy court. They will assess your bankruptcy income, the amount of the loan you’re applying for, and whether you have the means to pay that loan back over time. The motion you file with the court will go further into detail regarding your loan and the car you wish to purchase.

Getting a Car Loan After Your Bankruptcy Is Done

In some cases, it may make sense to wait until after your bankruptcy is complete to get a new car. By waiting, you can use this time to rebuild your credit and save up for a down payment, which can likely qualify you for better auto loan terms.

We’re Here to Guide you

Life after bankruptcy can be intimidating, especially when you have plans to commit to a large purchase. Kostopoulos Bankruptcy Law has the resources to make this process as seamless as possible. Not only have we been named as one of the Top 100 Firms by the Debt Education and Certification Foundation, we offer legal counsel in English, Vietnamese, Spanish, and Greek.

Call our Oakland bankruptcy lawyers today to receive award-winning legal counsel while purchasing your post-bankruptcy vehicle!

How Fast Does Bankruptcy Work?

Once you’ve made the decision to file for bankruptcy, it is common to just want to get the entire process over with. But with so many varying opinions, is there any way to know how long it actually takes? There’s no doubt that every case is different and the timeframes vary from person to person. Regardless, the following information can at least give you the barebones of what to expect from start to finish.

How Long Does Chapter 7 Bankruptcy Take?

Chapter 7 bankruptcy can take as little as three months, but may last up to six months depending on the way that you file. In a limited asset case, creditors have nothing to follow up on and everything is said and done in roughly four months. For asset-based filing, the entire process may take longer because there is more to process.

How Long Does Chapter 13 Bankruptcy Take?

Chapter 13 bankruptcy on average lasts 3-5 years. This is due to the repayment plan each individual is required to complete before your debt is discharged. However, the quicker you’re able to repay your debt, the faster you can say goodbye to bankruptcy.

How Long Will an Emergency Bankruptcy Take?

Emergency bankruptcy is exactly what it sounds like: an option for people who want an automatic stay with haste. Not everyone can file, but for those who are interested, the necessary documents must be filled out within 14 days or your case may be dismissed. It’s much quicker than either Chapter 7 or Chapter 13 and is beneficial if you need an automatic stay immediately.

Talk to an Experienced Attorney

No matter what chapter you’re hoping to file for, Kostopoulos Bankruptcy Law wants to meet your needs along the way. Get in touch with our Oakland bankruptcy attorney for representation you can count on!

Liquidation vs. Adjustment: How Chapter 13 & Chapter 7 Bankruptcy Differ

Filing for bankruptcy is a serious step. Before you make the decision, you should know what option is best for you. By understanding the differences between Chapter 7 and Chapter 13, you can make an informed choice before filing for bankruptcy.

Not only does the chapter you select influence your immediate financial situation, but it can also effect you in the future. For this reason, it is helpful to know how the two main consumer chapters differ.

What are the main differences?

Chapter 7 is frequently referred to as liquidation bankruptcy, as property will be sold to cover debts. To qualify for Chapter 7 bankruptcy, an individual must be below a certain level of income. Choosing Chapter 7 is basically like scrapping everything and starting over. While you may be able to qualify for certain exemptions for your property, a good portion of it will be liquidated in order to pay off any undischarged debt. In order to have your debts paid off, you must essentially give your bankruptcy trustee permission to sell any non-exempt property and distribute the proceeds to creditors.

In contrast, Chapter 13 is much more focused on readjusting or reorganizing debts and payment plans, rather than paying them off with personal property. You will file a repayment plan in order to pay off either all or a portion of your debts over a designated time period.

How much debt you must pay off will depend on a few factors, such as:

  • Your income or salary
  • The amount of secured and unsecured debts involved
  • How much property or assets you own

You won’t have to liquidate any property in this type of bankruptcy plan, which means individuals can often avoid foreclosure and keep their homes when filing Chapter 13.

Take Steps Towards Financial Freedom

If you have questions about which chapter of bankruptcy is right for your financial situation or would like to learn more, be sure to contact Kostopoulos Bankruptcy Law today for counsel. We are Certified Bankruptcy Specialists and have assisted thousands of clients in the past!

Financial freedom is just a phone call away. Get in touch with our legal team today to discuss your case.

What Type of Debt Can Be Discharged Through Bankruptcy?

If you have found yourself struggling under a mountain of debt and are unable to keep up with your financial obligations, you may be wondering whether bankruptcy is right for you. Our firm has represented clients in more than 6,000 bankruptcy filings and we have helped countless individuals in and around the San Francisco become debt free. The Debt Education and Certification Foundation (DECAF) has named us as one of the Top 100 Firms and we are one of only a few firms that has a board certified bankruptcy specialist as part of their legal team. We understand how devastating it can be to find yourself on the edge of financial ruin, with creditors harassing you non-stop, in fear that you will lose your home to foreclosure and with no viable solution in sight. During your initial consultation we will be able review your financial situation, analyze your debt and advise you as to whether you qualify to file for bankruptcy protection.

If you qualify to file for a Chapter 7 bankruptcy, you will be able to discharge the majority of your unsecured debt. Medical debt, credit card debt, personal loans, revolving lines of credit, certain student loans, auto accident claims, personally-guaranteed business debt, past due rent, and past due taxes that are more than 3 years old, are the most common types of debt discharged through Chapter 7. With this type of bankruptcy, our San Francisco bankruptcy attorney will work diligently to help maximize your exemptions to improve your chances of keeping the property and assets you value most.

There are instances in which filing for Chapter 13 bankruptcy may be a more practical option. There are also certain debts which can be discharged in Chapter 13, but not Chapter 7. These include marital debts stemming from a divorce or settlement agreement, court fees, debts resulting from loans taken from a retirement plan, HOA or Co-op fees incurred after filing for bankruptcy and more. In a Chapter 13 bankruptcy you will be required to pay priority debts such as child support, alimony and recent taxes, however other unsecured debt that will not necessarily get paid off as part of your Chapter 13 repayment plan, will be discharged upon completion of your bankruptcy proceedings. If you want to find out which of your debts may be eligible for discharge, call Kostopoulos Bankruptcy Law today.

he Most Common Reasons to File for Bankruptcy California Bankruptcy Blog

If you are wondering whether bankruptcy may be right for you, we advise you discuss the matter with a certified bankruptcy specialist. Kostopoulos Bankruptcy Law is one of only a few San Francisco law firms that have a bankruptcy specialist on their legal team who has been certified by the American Board of Certification. Having represented clients in more than 6,000 bankruptcy cases, we have the expertise necessary to answer your bankruptcy-related questions and help you navigate through the bankruptcy process.

Done right, bankruptcy can be used as an effective foreclosure defense, a repossession defense, a way to put a stop to creditor harassment and a way to help you get out from under a massive amount of debt. If bankruptcy is not right for you, our firm can also help you avail yourself of another debt relief option that may still be able to give you the peace of mind you deserve. The lawyers at our firm are strong advocates for debtors’ rights and we are here to provide you with a custom strategy designed to help you get back on the road to a full financial recovery.

There are many reasons an individual may want to consider filing for bankruptcy. Some of the most common reasons you may want to consider filing for bankruptcy are:

  • You have recently gone through a divorce and you need help getting your finances under control, particularly now that you only have one source of income.
  • You have sustained serious injury or required extensive medical care that has left you with a large amount of medical bills, far beyond your ability to pay.
  • You or your spouse has lost a job and thus a significant source of income. In situations such as this, we often see people using credit cards or attempting to take out 2nd mortgages and home loans in an effort to pay of basic household expenses.
  • You have overextended your credit or maxed out your credit cards and have only been able to make the minimum payment amounts. High interest rates on credit cards could mean that you are not actually paying down your debt but simply paying interest.
  • You started a business, but due to the economy or other unforeseen circumstances, you were unable to keep the business alive. While business debt cannot be discharged through a personal bankruptcy, most business debts have a personal guarantee. If you provided your home or other assets as a guarantee that the business loan would be repaid, you can be held liable for that debt.
  • Your home is at risk of foreclosure. The housing market fluctuates and when the market goes down it can dramatically reduce the value of your home. You may be unable to keep up with the payments, particularly if you are underwater on your mortgage. In cases such as this, bankruptcy can be used as a foreclosure defense.

Financial problems can happen to anyone. An individual’s race, sex, social stature, career or education have nothing to do with whether he or she may eventually need bankruptcy protection. If you want to alleviate the financial stress you feel and regain control of your finances, you have come to the right place. Our firm can help you pursue true debt relief. Contact a San Francisco bankruptcy lawyer at our firm now to find out more about how bankruptcy can help you become debt free.

Bankruptcy Exemptions in the State of California

Each state has its own laws that dictate the exemptions an individual can claim when filing for bankruptcy. The state of California requires that any individual who wishes to claim certain property and assets as exempt from his or her bankruptcy proceeding, must use the exemptions afforded by state laws. The federal exemptions found in the U.S. bankruptcy code cannot be used here in our state. In certain instances individuals may be able to claim specific “non-bankruptcy” exemptions for a portion of their wages, veteran benefits, Social Security benefits or benefits available to those in civil service jobs.

We advise that any individual who is considering filing for bankruptcy obtain legal counsel before making any final decisions. As a general rule of thumb, those filing for Chapter 7 bankruptcy protection will be able to claim a portion of any real or personal property they occupy, part of the value of a car, truck or other automobile, a limited amount of jewelry, art, equipment, furnishings, tools and other property, as well as a percentage of the wages that were earned up to 30 days prior to filing. All non-exempt property and assets can be liquidated by your bankruptcy trustee and used to pay off unpaid debt. As a result of the various exemption laws, and with the help of a skilled attorney, many individuals will get to retain the majority of their possessions and property.

As each bankruptcy case is different, it is vital that you review your particular situation and individual finances with an experienced San Francisco bankruptcy attorney as soon as possible. The attorneys at Kostopoulos Bankruptcy Law have helped thousands of people file for bankruptcy so as to alleviate their financial woes and get the fresh start they deserve. The Debt Education and Certification Foundation (DECAF) has listed us as one of the Top 100 Firms and we are one of only a few firms who has a certified bankruptcy specialist to guide you through the entire bankruptcy process. We understand how difficult it can be to find yourself on the brink of financial disaster, but with our knowledge staff and legal expertise, you can trust that your case is in good hands. If you want to find out if bankruptcy may be right for you, call our firm so that we can help you review your debt relief options and advise you on how to proceed.

Overview on Debt Settlement

There is no question that the emotional and psychological effects of debt can be devastating and impact numerous aspects of a debtor’s life. Debt can affect your ability to have a nice dinner with friends to your ability to go on a much needed vacation or pay for everyday living expenses. Having too much debt can take the joy out of living.

Given the economic downturn that has impacted millions of Americans and homeowners, especially in the sunshine states such as California, Nevada, Arizona and Florida, it’s not surprising that so many debtors are considering their bankruptcy options or their alternatives to bankruptcy. One such alternative to the traditional bankruptcy is called “debt settlement.”

One of the greatest things about the financial industry is that virtually everything is negotiable. Even if you think an interest rate or a price is set in stone, sometimes getting a discount or a reduction in fees comes down to knowing when and who to ask for it.

Debt settlement is the process of offering a large, one-time payment towards an existing debt in exchange for the forgiveness of the remaining balance. For example, if you owe $30,000 on a hospital bill and we approach the hospital and offer a one-time payment of $20,000. In return for this one-time payment, the hospital agrees to forgive the remaining $10,000.

Why would a hospital be willing to accept a $10,000 loss? Hospitals frequently provide medical services that they are never paid for, especially when the patients are uninsured or cannot afford to pay their bill. The hospital is trying to protect their bottom line, which is a key fact to remember during negotiations. Since creditors such as hospitals or credit card companies represent unsecured loans, there is no “collateral” for them to seize in order to help repay an unpaid balance.

Getting a creditor to accept a settlement on a balance may seem too good to be true, but it’s possible. Lenders don’t generally like to advertise settlement, but if you’re quickly falling behind on your payments and heading towards bankruptcy, your lender may be willing to take whatever they can get, giving you one last opportunity to get back on your feet.

If you are considering debt settlement as an alternative to bankruptcy, it’s important to discuss this option with a qualified professional from Kostopoulos Bankruptcy Law. Not only are there specific procedures that encourage a successful debt settlement, if handled improperly, the creditor may accept a payment yet continue to collect on the remaining debt, which would defeat the purpose of debt settlement.

Contact us today to discuss debt settlement as well as all other viable debt relief options that can put you on the track to a financial fresh start!