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Can a Married Person File Bankruptcy Individually?

By stonehavenlaw on August 23, 2011 in ,

Can a married person file individually? If so, what is the negative effect on the spouse? What if they’re both on the debt? What if they’re both on title to a house and on the mortgage?

Filing for bankruptcy is a difficult decision to make, especially for married couples. A common question raised in this situation is whether a person can file for bankruptcy individually and if that decision will negatively impact their spouse.

Fortunately, there are no laws that require spouses to file for bankruptcy together. A married couple can choose to file an individual bankruptcy or a joint bankruptcy just as they would when debating to file for joint or individual tax statements. In California and Nevada, bankruptcy law dictates that whether a married person files alone or with their spouse, all community property is considered to be a part of the bankruptcy estate. The community property will be liquidated by the bankruptcy trustee to pay creditors before a bankruptcy discharge can be granted. In common law states, only property that is held jointly can be liquidated to pay creditors. If the non-filing spouse holds individual assets, he/she will not have to worry about losing anything during this period.

Filing for individual bankruptcy will have no negative impact upon an individual’s spouse. The bankruptcy case will not show up on their spouse’s credit report, hurt their chances of obtaining a loan in the future, or force them to explain what has happened to their employer. Keep in mind though, that filing for bankruptcy alone can leave the spouse (who is not filing for bankruptcy) still liable for his/her share of the joint debts. Any joint debt will become the responsibility of the non-filing partner. For example, if a husband files for bankruptcy, the joint debt will become the responsibility of the wife. Likewise, if a husband is discharged, his wife will still be liable for the debt. The spouse will be negatively affected if a loan is unpaid after a chapter 7 or chapter 13 has been filed.

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Keeping Your Car With Bankruptcy

By stonehavenlaw on August 18, 2011 in , ,

Losing your car to creditors can be a very frightening reality to face. Fortunately, there are options that will allow you, the debtor, to keep your car. If faced with this situation, a debtor has the choice of filing for chapter 7 or chapter 13 bankruptcy. Filing for chapter 7 bankruptcy can protect a debtor’s car from a forced sale by the creditors.

On the other hand, a debtor can also file for chapter 13 bankruptcy, which will help to postpone the car payment for a short period of time and allow the debtor to catch up on his/her car loan debts. In both cases, state laws will help to determine what the debtor can or cannot keep.

California state laws allow the debtor to keep his/her vehicle and continue to make the payments so long as he/she maintain adequate insurance and is not past due at the time he/she files for bankruptcy.  If the debtor happens to own the car, its value will determine whether it can be kept or not. If the debtor does not own the car and is still making payments on it, there are two options that are available: reaffirmation and redemption.

A reaffirmation is an agreement between the creditor and the debtor where the creditors agrees to continue making payments while the debtor agrees to not discharge the auto debt. A debtor can also choose to purchase the car and pay off the rest of the loan (redemption). Redemption is a very difficult option to take if the debtor does not have enough money to pay off the debt owed on his/her car.

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5 Tips for Dealing with Debt Collectors

By stonehavenlaw on August 16, 2011 in ,
  1. Put it in writing! When dealing with debt collectors, always follow up every important conversation with a written letter. Keep track of all of your conversations and calls with debt collectors.
  2. Understand that if you are dealing with debt collection, and wish to go on a payment plan, you should have a lump sum to offer the debt collector. Usually, creditors will not agree to a repayment plan if you do not first provide them with a lump sum payment upfront.
  3. Have numbers ready when talking with debt collectors. Know what the maximum amount you can afford is. Give the debt collector specific numbers when you make your offer. If they do not accept your offer. Tell them to run it by their supervisor before they give you the definite no (Debt Relief Attorney).
  4. Understand that if your payment amount has been negotiated down in amount, this is likely to also hurt your credit report.
  5. If the debt collector is calling you at work and you are not allowed to receive personal calls at work, be sure to tell the debt collector. They must comply with your work call rules. (Remember to put it in writing!)
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Understanding California Bankruptcy Exemptions

By stonehavenlaw on August 7, 2011 in ,

What is a Bankruptcy Exemption?

Bankruptcy exemptions are in place to help ensure that the person filing for bankruptcy is able to keep those items which are reasonable and necessary. Different assets have different exemption limits (depending on the asset, and also depending on which exemption system is used.)

Is there one Bankruptcy Exemption limit?

No. There is not one bankruptcy exemption limit. In fact, there are different bankruptcy exemption systems. First, there is the federal exemption system, which might be used in any state. If you are filing in California, however, and if you have been a resident of California for at least two years, then you will be using one of the two bankruptcy exemptions in California.

Will I lose my property if it does not fit within one of the bankruptcy exemptions?

Not necessarily. What chapter are you filing? If you are filing a chapter 13 bankruptcy, then you will most likely not lose any property. Instead, the value of your non-exempt assets must be paid off in your chapter 13 plan.

If you are filing a chapter 7 bankruptcy, and if you have a non-exempt asset, then the Trustee does have the right to sell that asset and use it to pay your creditors. The Trustee may or may not opt to sell the asset (depending on the cost of sale, etc.) The Trustee may even work out a payment plan with you – allowing you to keep the asset, so long as you agree to pay for the non-exempt portion of it.

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Debt Settlement vs Bankruptcy

By stonehavenlaw on August 2, 2011 in ,

How is Debt Settlement Similar to Bankruptcy?

Debt settlement is exactly what it sounds like: it is the settlement of your debts. Bankruptcy is also the settlement of your debts. In both cases, you are in essence saying that you cannot stick to the original terms of your payment contract, and need to settle the debt in a different manner.

How is Debt Settlement Different from Bankruptcy?

In debt settlement, your creditors may or may not work with you. Usually, a creditor is more willing to work with you if you can them offer at a lump sum down payment. In bankruptcy, your creditor has no choice but to abide by the terms of the bankruptcy because the bankruptcy is overseen by the federal court.

In debt settlement, how much the creditor will get paid depends on what both you and the creditor agree to. In bankruptcy, the amount that the creditor will be paid depends on multiple factors, including, which chapter of bankruptcy you filed. You should consult with an attorney to get a better idea of what this amount might be for you.

Most people file for bankruptcy once they are unable to work out any agreement with their creditors via debt settlement.

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The Importance of Hiring a Bankruptcy Attorney

By stonehavenlaw on July 31, 2011 in , ,

The decision to file bankruptcy leads many to speculate on whether a bankruptcy attorney is necessary, or if is something they can handle on their own. Undergoing the process of bankruptcy can be tedious and confusing for individuals who do not have the expertise of a bankruptcy attorney, which is why seeking the help of an experienced Bankruptcy attorney is beneficial for a number of reasons.

Bankruptcy attorneys have the knowledge to conduct a successful bankruptcy case. They are aware of the various applicable laws and precedents, which may affect your case. They are familiar with the different bankruptcy chapters and how they apply to your specific financial circumstances. The bankruptcy attorney you choose to file your case should be licensed in the state in which you are filing, since each state has different laws that regulate the declaration of Bankruptcy. This will ensure a thorough understanding of the applicable bankruptcy laws and their development over time.

Bankruptcy Attorneys are also critical to any case due to their ability to effectively communicate with Trustees and court officials. This eliminates any disadvantages and possible errors which may be cause by miscommunication.  They are aware of when and how to file the proper documents. They are able to sort through and make sense of the tedious and perplexing documentation necessary for a bankruptcy case. Bankruptcy attorneys are trained to speak the legal language vital to presenting a convincing case. In short, a bankruptcy attorney is essential in carrying out a successful Bankruptcy due to their ability to work quickly and efficiently, always being mindful of deadlines and procedures. Eliminating, in turn, any unnecessary stress and worry for the Debtor.

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Chapter 7 vs. Chapter 13: The Main Difference

By stonehavenlaw on June 29, 2011 in , , ,

What is the Main Difference Between a Chapter 7 and a Chapter 13 Bankruptcy?

The Difference between Chapter 7 and Chapter 13 Bankruptcy: How you deal with your debt

Chapter 7 bankruptcy allows you to wipe out most of your unsecured debts. How does it work? Any asset that you own, which does not fit within a bankruptcy exemption, can be sold and used to pay off your creditors.

Chapter 13 Bankruptcy, on the other hand, allows you to keep your property and deal with your debt by going on a repayment plan. Chapter 13 is different from chapter 7 bankruptcy because you are pledging to give your disposable monthly income to your unsecured creditors for a number of years.

The Difference between Chapter 7 and Chapter 13 Bankruptcy – Qualifying for bankruptcy

To qualify for chapter 7 bankruptcy, your income must be equal to or less than the state median income for your household size. If your income is higher than the median income for a household of your size, then you must take and pass the means test. There are no debt limits for filing a chapter 7 bankruptcy.

Qualifying for a chapter 13 bankruptcy is different from qualifying for a chapter 7 bankruptcy. In a chapter 13 bankruptcy, you must have a steady source of income and it must be enough to fund a feasible payment plan. Chapter 13 bankruptcy is also different from chapter 7 bankruptcy because your debts must be within both the secured and unsecured debt limits.

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Credit Counseling for Bankruptcy Filers

By stonehavenlaw on June 22, 2011 in ,

In 2005, the bankruptcy laws changed to REQUIRE, with some limited exceptions, every bankruptcy filer to complete an approved credit counseling course before he or she is able to file a bankruptcy under any chapter in the bankruptcy code.  This means that even if you are filing a joint bankruptcy, each spouse must take the credit counseling course. The credit counseling course itself must be taken with an approved provider, and can be taken online or over the phone.  The credit counseling course generally takes between one hour and three hours, and will go over all available opportunities for credit counseling and budget analysis.

While this requirement can be tedious, the majority of our clients report to us that the courses are interesting and helpful.

For a complete list of approved bankruptcy credit counseling courses, please refer to the bankruptcy court website, or consult with a bankruptcy attorney at the Stone Haven Law Group.

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Dare to Dream?

By stonehavenlaw on June 21, 2011 in

If you have read the newspaper or browsed news websites lately you may have come across the DREAM Act.  You may ask: what is it? Does it mean anything to me?  Well, if you are one of the thousands of students who came to the U.S. without inspection when you were a minor, the DREAM Act matters.

The Development, Relief and Education of Alien Minors Act, or DREAM Act, would provide individuals who meet certain requirements with an opportunity to enlist in the military or go to college and have a path to citizenship which they otherwise would not have without this legislation.

To be eligible for the DREAM ACT, you must:

  • have entered the United States before the age of 16;
  • have been present in the United States for at least five (5) consecutive years prior to enactment of the bill;
  • have graduated from a United States high school, or have obtained a GED, or have been accepted into an institution of higher education (i.e. college/university);
  • be between the ages of 12 and 35 at the time of application; and,
  • have good moral character.

As of this writing, the DREAM Act is said to be voted on in both the House and Senate before the year ends.  So stay tuned.  We will update you as new information becomes available.

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Ideal Candidate for Chapter 7 Bankruptcy

By stonehavenlaw on June 17, 2011 in ,

As a specialized bankruptcy law firm, we get asked all the time who the “ideal candidate” for a chapter 7 bankruptcy might be, or in the alternative, “who can file a chapter 7 bankruptcy.”

There is no set mold for an ideal chapter 7 candidate; in fact, the ideal candidate for a chapter 7 bankruptcy comes in many shapes and sizes. In the simplest terms, the ideal chapter 7 bankruptcy candidate is an individual or family who finds that on a monthly basis their reasonable and necessary expenses outweigh their income, leaving no excess cash to accommodate credit cards, medical bills, unpaid utility bills, etc. The chapter 7 bankruptcy will address these debts, allowing those individuals and families to put their money towards more important things, like their home, food, insurance, and transportation costs.

If you find yourself struggling to meet your monthly financial obligations, consult with an attorney to determine whether you might be the “ideal candidate” for a chapter 7 bankruptcy. At the Stone Haven Law Group, we offer a FREE initial consultation to determine just that, and give you a better idea of your options.

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