Woodland Bankruptcy Lawyers

A Woodland, California, bankruptcy lawyer at Pakpour Banks LLP can help if you’re dealing with overwhelming debt. The Bankruptcy Code enables a pathway to debt relief for struggling individuals and businesses. You can seek bankruptcy protection without a lawyer, but the process might be complex and confusing. Working with a Woodland bankruptcy attorney is the best way to maximize the bankruptcy benefits and reduce your stress.

The Benefits of Bankruptcy

Deciding to file for bankruptcy is a difficult decision that has serious consequences. Still, bankruptcy provides a pathway to manage your debt and reorganize your finances. If you’re facing foreclosure on your home or never-ending collection calls, bankruptcy might be the right choice for you.

The “automatic stay” goes into effect when you file your bankruptcy petition. Under this rule, creditors must stop all collection efforts. They cannot attempt to collect unless they get permission from the court or until the bankruptcy case resolves. The automatic stay gives you time to work through your bankruptcy case without pressure from collection agencies.

At the end of your bankruptcy case, you will appear before the bankruptcy judge to request a discharge. Once the court discharges a debt, you no longer have an obligation to repay it. Many debts can be discharged, including credit card bills, medical bills, past-due utility charges, most auto accident claims, and business debts. Some debts, like child and spousal support obligations, recent income tax bills, and student loans, can’t be discharged. Still, these rules have exceptions (for example, student loans can be discharged if it causes you hardship to repay them). As experienced bankruptcy attorneys, we can recommend the best options for your situation.

Two Types of Bankruptcy for Individuals

Most individual debtors file under Chapter 7 or Chapter 13. Both chapters allow a discharge of outstanding debts once the debtor completes the specified process. The most significant difference is that Chapter 13 requires a repayment plan, while Chapter 7 does not.

What Happens in a Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a liquidation, meaning you’ll have to relinquish your non-exempt assets to repay your debts. The Bankruptcy Code exempts certain property, like household goods or your car, from liquidation. Thus, most Chapter 7 cases are “no-asset” because the debtor has no non-exempt assets to liquidate. In any case, most debtors receive a discharge of their outstanding debts within a few months.

What Happens in a Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is called a “wage earner’s plan” because you must agree to a repayment plan for three to five years. Once you complete the plan, you can receive a discharge of your outstanding debts. The plan must either provide secured creditors with the value of the collateral or pledge all your disposable income toward repayment. Chapter 13 is a good option for homeowners because you can use the plan to catch up on missed mortgage payments. 

Can I file for Chapter 7 or Chapter 13 if I run a business?

If your business is struggling, you can use Chapter 7 for a quick liquidation or Chapter 13 to reorganize your business. A Chapter 7 or 13 bankruptcy discharge will cover both consumer and business debts if you operate a sole proprietorship. However, a business entity, like a corporation, partnership, or LLC, won’t receive a discharge in these chapters. In that case, your business will need to file for a reorganization under Chapter 11.

Do I Have to Give Up My Home or Car in Bankruptcy?

Depending on the value of your home or car, you might be able to protect it with an exemption. The goal of the Bankruptcy Code is to treat creditors fairly without placing the debtor out on the street. Thus, California’s bankruptcy exemptions allow you to keep property necessary to maintain your standard of living. Many states allow you to choose between state or federal exemptions. However, California requires you to use the state exemptions and has two separate exemption sets to choose from. 

Although the values are different, both sets allow you to exempt an amount of equity in your home, household goods, or your car. Once you choose an exemption set, you must stick with those rules. You can’t pick and choose between the two. Additionally, California filers can use federal non-bankruptcy exemptions, which cover retirement funds for federal workers, earned but unpaid wages, and death and disability benefits

You must list your exemptions in Schedule C of your bankruptcy petition, including the law that exempts that property. Without an attorney, you risk making mistakes or leaving out an important exemption. Thus, your Woodland bankruptcy lawyer will help you understand which exemptions apply and how to claim them. 

How Long Will Bankruptcy Affect My Credit?

A Chapter 7 bankruptcy can stay on your credit report for up to 10 years. A Chapter 13 bankruptcy typically shows for eight years. While bankruptcy does affect your credit score, it doesn’t mean you’re out of luck during that time. In fact, if you had a low credit score going into your bankruptcy, your score could improve by as many as 50 points. While discharged debts still appear on your credit report, they no longer count against your score. Thus, bankruptcy may be your only negative mark. Those with higher scores before bankruptcy will see their score drop more significantly. After bankruptcy, choices to improve your credit include applying for a small loan with fixed installment payments or a secured card that requires a cash security deposit.

Woodland California Bankruptcy Lawyer: The Pakpour Banks LLP Difference

Formed in 2019, our attorneys serve the heart of agricultural California, including the City of Trees. When you find yourself with ever-mounting debt, let us help. Our experienced bankruptcy attorneys offer each client personalized service to meet their needs and goals. We are a close-knit group of professionals strongly committed to serving our community. As a small law office, we take pride in maintaining active communication with our clients. You’ll find our attorneys and staff available when you need us. We understand the intricacies of the Bankruptcy Code and will be by your side throughout the process. Whether your goal is a quick liquidation or a stress-free reorganization, our attorneys will help you achieve the outcome that meets your needs.

Our firm speaks spanish. Se habla español.