FAQ'S

The following questions and answers provide general answers to standard questions. They cannot be construed to be specific legal advice concerning the facts of your situation. Your specific case may be different from the facts assumed in this section. Consult with an attorney regarding your cases before filing

Will filing bankruptcy ruin my credit?
A: No in most cases it will improve bad credit

Will filing bankruptcy stop me from renting a new apartment?
A: No, federal law prohibits discrimination in housing or in employment because of an exercise of your options under the federal bankruptcy act.

How long does a bankruptcy stay on my credit report?
A: Bankruptcy can be reported on a credit report for ten years.

Will I have to pay taxes on debts that are discharged in bankruptcy?
A: No, the Internal Revenue Service code specifically excepts debts that are discharged in bankruptcy as taxable income under the debt forgiveness doctrine.

Can I keep my car after my bankruptcy case closes?
A: Yes, bankruptcy in California provides substantial exemptions in property including most motor vehicles.

Can I stop a foreclosure by filing a Chapter 7.
A: Yes, the automatic stay or 11 U.S.C.A. of the bankruptcy act 362 halts all actions to collect a defaulted debt including foreclosure

What is the median income?
A: The median income is the average household income for a particular location based on household size and comes from U.S. census bureau statistics.

What is the means test
A: The means test (form 22C)is a comparison of the bankruptcy debtors household income against the median income and thereafter an application of IRS collection standards and other U.S. census bureau statistics as deductions against household income to determine an objective and standardized dmi.

What is a Chapter 13 lien strip?
A: A motions proceeding in the bankruptcy court to value real estate and a request for an order declaring a mortgage or a portion thereof that is beyond the courts valuation determination as unsecured.

Can student loans be discharged in a bankruptcy?
A: Yes but only on a showing of unusual or special hardship

Can IRS Tax debt be discharged in a bankruptcy?
A: Yes, but it has to be considered "stale".

Do I need to have a certain amount of debt to file for bankruptcy
A: No, there is no specific cut off point for the amount of debt that you need to have.

Do I have to go to court if I file a bankruptcy?
A: There is a court hearing called a 341 hearing in which you appear and answer questions before a trustee concerning your financial situation.

Can I file bankruptcy on my car?
A: Yes, a secured debt such as a car loan is dischargeable in a bankruptcy proceeding.

What is a re-affirmation agreement.
A: Bankruptcy has a procedure for taking a debt out of the bankruptcy, or keeping a certain debt voluntarily.

Can I file Chapter 7 if I am over the median income?
A: Yes, you can still file no matter what your income is. However, you need to meet a special circumstances doctrine if you are over the median income.

What would be an example of special circumstances?
A: There could be many different reasons or special circumstances for obtaining a chapter 7 discharge. The primary consideration is that you show little or no dmi based on necessaries. In California actual mortgage expenses are often much higher than the standardized mortgage expense leaving a zero dollar bottom line for an over the median income debtor.

Can the court deny a discharge?
A; Yes, although denial is rare, it usually happens when a debtor does something dishonest in connection with a bankruptcy case such as failing to schedule assets.

How long does it take to regain credit after bankruptcy
A: For an individual with a steady work history, usually less than two years. In some cases less than six months.