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FAQs

  1. What is the first step?
  2. What do I bring to my free consultation?
  3. What are the Low Cost Attorneys' Fees?
  4. Are the Chapter 13 Attorneys' Fees the Same?
  5. How much is the Court Filing Fee?
  6. Can I make payments on the attorneys' fees?
  7. If I do not qualify for Chapter 7, do I have to pay all of my creditors back in full?
  8. Will my property be sold if I file a Chapter 7 case?
  9. What must I do before filing bankruptcy?
  10. What property can I keep?
  11. What will happen to my home and car if I file bankruptcy?
  12. Do I need to make my mortgage payments after I file bankruptcy?
  13. Can I own anything after bankruptcy?
  14. Will bankruptcy wipe out all my debts?
  15. Do I need to be a U.S. Citizen?
  16. Will I have to go to court?
  17. What do I bring to my court hearing (meeting of creditors)?
  18. What else must I do to complete my case?
  19. Will the bankruptcy affect my credit?
  20. What else should I know?

1. What is the first step?

If your case is not an emergency, call and schedule a free consultation. If your case is an emergency, call and request names of approved credit counseling agencies, so that you can complete your credit counseling before you come in. Examples of an emergency would be an imminent garnishment, foreclosure, levy or if your car has recently been repossessed or may be repossessed in the near future.

2. What do I bring to my free consultation?

During the consultation the attorney will need to have information about your income, expenses and your debts. This means that you need to have a working knowledge of your debt and the composition of your income and expenses. You may want to bring a copy of your most recent pay check stub and any legal papers that you have been served with, including lawsuits and foreclosure notices. If you make more than $50,000 a year in combined gross income for a family of one or more it would be useful to bring your most recent pay check stubs, and 1040 income tax return.

3. What are the Low Cost Attorneys' Fees?

Low cost attorneys' fees is one of our mottos as we work toward giving back to our community, and helping others who are in need. Although the attorneys' fees do vary, clients do enjoy overall lower fees with the services of our firm. We are certain of this commitment, as we do not charge for the extra services that we deliver. For example, most firms do charge extra for reaffirmation agreements, reaffirmation agreement hearings, non-dischargeability work, and other services necessary in many Chapter 7 cases. The clients with our firm can feel confident in knowing that the fee quoted will include all of the extras, short of creditor litigation and US Trustee involvement. The basic Chapter 7 liquidation case begins at $400 for the attorneys' fees, and many cases of this nature will include a Court filing fee waiver as well. The attorneys' fees range from $400 to $2500 depending on the nature of the work involved for the attorney, and the complexity of the case. For some complicated litigation cases, the fees may be higher than $2,500.

Because of our commitment to help, we have program offers that enable the client to receive extra savings, including free credit reports, and mandatory debtor education and credit counseling classes.

4. Are the Chapter 13 Attorneys' Fees the Same?

No. The Court has set forth a guideline for Chapter 13 attorneys' fees that most attorneys follow. We charge between -0- and $1,500 up front, for non-business cases. The remainder of the guideline fees are paid through the case. Chapter 13 has a monthly payment that the Chapter 13 Trustee administers and a portion of this monthly payment will be paid for the attorneys' fees under the Court's guideline structure. The guideline for the attorneys' fees is set forth in the Rights and Responsibilities Document available on the Court's website (See helpful link, U.S. Bankruptcy Court, Northern District California, under Resources Section)

5. How much is the Court Filing Fee?

  • Chapter 7: $306
  • Chapter 13: $281
  • Chapter 11: $1046.00

The filing fee is the same amount whether you are filing as an individual or as a married couple. The court may allow you to pay your filing fee in installments if you cannot pay it all at once. In some Chapter 7 cases, if your household income is less than 150 percent of the official poverty guidelines, you may request that the court waive the Chapter 7 filing fee. The filing fee cannot be waived in a Chapter 13 case, but it can be paid in installments.

6. Can I make payments on the attorneys' fees?

Yes. Most clients do make payments on their attorneys' fees. If a client is about to be sued due to non-payment on a credit card, Evans Law Offices will help them either to file defensive paperwork or to negotiate on their behalf before the bankruptcy case is filed.

7. If I do not qualify for Chapter 7, do I have to pay all of my creditors back in full?

No. This is a misconception. Whether or not you have to pay your unsecured creditors in full depends on two tests. The first is the asset test or liquidation analysis, where your property values dictate whether and how much you will need to pay back. The second test is the means test; this is where your income for 6 months prior to filing bankruptcy is examined. Many debtors end up paying nothing to their unsecured creditors in a Chapter 13 case and others end up paying a fraction of what they owe.

8. Will my property be sold if I file a Chapter 7 case?

In some circumstances property is sold in a Chapter 7 case, but the goal is to avoid any Chapter 7 filing where the trustee in bankruptcy will seize and sell assets. Normally when debtors are in the position of having their property sold the case has been improperly filed.

9. What must I do before filing bankruptcy?

You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. Different agencies provide the counseling in-person, by telephone, or over the internet. If you decide to file bankruptcy, you must have a certificate from the agency showing that you received the counseling before your bankruptcy case was filed. Our office provides assistance obtaining credit counseling, you can set an appointment to use our computer and have a staff member help you complete the class.

Most approved agencies charge between $25-$50 for the pre-filing counseling. However, the law requires approved agencies to provide bankruptcy counseling and the necessary certificates without considering an individual's ability to pay. If you cannot afford the fee, you should ask the agency to provide counseling free of charge or at a reduced fee. Our office will provide a list of approved credit counseling agencies after your initial interview with the attorney.

10. What property can I keep?

In a Chapter 7 case, you can keep all property which the law says is "exempt" from the claims of creditors. It is important to check the exemptions that are available in the state where you live. (If you have moved to your current state from a different state within two years before your bankruptcy filing, you may be required to use the exemptions from the state where you lived just before the two-year period.) In some states, you are given a choice when you file bankruptcy between using either the state exemptions or using the federal bankruptcy exemptions. If your state has "opted" out of the federal bankruptcy exemptions, you will be required to choose exemptions mostly under your state law. California is an "opt-out" state. California provides two alternative sets of exemptions to be drawn from in protecting your assets. The exemptions are fairly liberal and in most cases that we file an individual debtor's assets are completely protected.

In determining whether property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth when your bankruptcy case is filed. Especially for furniture and cars, this may be a lot less than what you paid or what it would cost to buy a replacement.

You also need to look at your equity in property. That means you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $500,000 house with a $490,000 mortgage, you have only $10,000 in equity. You can fully protect the $500,000 home with a $10,000 exemption.

While your exemptions allow you to keep property even in a Chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. In a Chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law. In most cases you will have to pay the mortgages or liens as you would if you didn't file bankruptcy.

11. What will happen to my home and car if I file bankruptcy?

In most cases you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to creditors in Chapter 13.

However, some of your creditors may have a "security interest" in your home, automobile, or other personal property. This means that you gave that creditor a mortgage on the home or put your other property up as collateral for the debt. Bankruptcy does not make these security interests go away. If you don't make your payments on that debt, the creditor may be able to take and sell the home or the property, during or after the bankruptcy case.

In a Chapter 13 case, you may be able to keep certain secured property by paying the creditor the value of the property rather than the full amount owed on the debt. Or you can use Chapter 13 to catch up on back payments and get current on the loan.

There are also several ways that you can keep collateral or mortgaged property after you file a Chapter 7 bankruptcy. You can agree to keep making your payments on the debt until it is paid in full. Or you can pay the creditor the amount that the property you want to keep is worth. In some cases involving fraud or other improper conduct by the creditor, you may be able to challenge the debt. If you put up your household goods as collateral for a loan (other than a loan to purchase the goods), you can usually keep your property without making any more payments on that debt.

12. Do I need to make my mortgage payments after I file bankruptcy?

It is very important that a person trying to save their house continue to make ongoing mortgage payments after their case is filed. It is true that any debt owing at the time of filing can be put into a reorganization case.

If a person is trying to modify their mortgage, they are attempting to change the terms of an existing contract. There are many programs helping distressed debtors who cannot afford their mortgage payments to modify their existing contracts, however, the bankruptcy system still requires that monthly payments be made to secured debt creditors with valid contracts on long term debt. Sometimes a decision is made to allocate for the HAMP Payment, rather than the contractual payment. The HAMP payment is a calculation that is a percentage of the standard mortgage payment, when considering the HAMP guidelines in conjunction with the Debtors monthly gross income. A HAMP payment proposed for ongoing mortgage payments is done in conjunction with a Modification Chapter 13 Plan. The Court will allow for a debtor to pay less than the full contractual payment when there is proof that a modification of the mortgage request is pending with the same lender.

13. Can I own anything after bankruptcy?

Yes! Many people believe they cannot own anything for a period of time after filing for bankruptcy. This is not true. You can keep your exempt property and anything you obtain after the bankruptcy case is filed. However, in a Chapter 7 case, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after filing for bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt. In our experience, debtors have been able to purchase homes or cars while still in bankruptcy or shortly after the case has closed. Our office can provide a list of lenders who work with people in bankruptcy.

14. Will bankruptcy wipe out all my debts?

Yes, with some exceptions. Bankruptcy will not normally wipe out:

  • Money owed for child support or alimony;
  • Most fines and penalties owed to government agencies;
  • Most taxes and debts incurred to pay taxes which cannot be discharged;
  • Student loans, unless you can prove to the court that repaying them will be an "undue hardship";
  • Debts not listed on your bankruptcy petition;
  • Loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;
  • Debts resulting from "willful and malicious" harm;
  • Debts incurred by driving while intoxicated;
  • Mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your personal obligation to pay any additional money if the property is sold by the creditor).

15. Do I need to be a U.S. Citizen?

No. Citizenship is not a requirement in order to file a bankruptcy case.

16. Will I have to go to court?

In most bankruptcy cases, you only have to go to a proceeding called the "Meeting of Creditors" to meet with the bankruptcy trustee and any creditor who chooses to come. Most of the time, this meeting will be a relatively short hearing where you are asked questions about your assets and financial situation. Creditors are then given an opportunity to question you after the Trustee has finished their questioning.

Occasionally, if complications arise, or if a creditor chooses to dispute a debt, you may also have to appear at an additional hearing or your matter may involve legal or factual findings that the judge will need to decide. At these times, you may be required to come to court and testify. We help you through every step of the Court process.

In a Chapter 7 case, you may need to attend an additional hearing if you want to reaffirm on any of your debts. To reaffirm on a debt means to make yourself personally liable again.

17. What do I bring to my court hearing (meeting of creditors)?

You must bring an unexpired photo I.D. and proof of your social security, in most instances the trustee will want to see either your social security card or a recently filed tax return.

18. What else must I do to complete my case?

After your case is filed, you must complete an approved course in personal finances, debtor education. This course will take approximately two hours to complete. Our office will provide you a list of approved providers. Most providers offer the course over the internet (usually by watching a video). Clients can schedule an appointment with our office for use of a computer and staff assistance in completing this course.

You will not get a discharge in your bankruptcy case unless this course is completed and filed with the court. If you have filed a Chapter 7 case you should complete this class as soon as you can after receiving your case number. In a Chapter 13 case you have a longer period of time to complete the class but our office recommends completing the class at the beginning of your case.

19. Will the bankruptcy affect my credit?

There is no clear answer to this question. Unfortunately, if you are behind on your bills, your credit may already be in the lower scores. Bankruptcy will probably not make things worse.

The fact that you've filed a bankruptcy can appear on your credit record for ten years from the date your case was filed. But because bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and may be able to get new credit.

If you decide to file bankruptcy, remember that debts discharged in your bankruptcy should be listed on your credit report as having a zero balance, meaning you do not owe anything on the debt. Debts incorrectly reported as having a balance owed will negatively affect your credit score and make it more difficult or costly to get credit. You should check your credit report after your bankruptcy discharge and file a dispute with credit reporting agencies if this information is not correct.

20. What else should I know?

Utility Services—Public utilities, such as electric company, cannot cut off service because you have filed for bankruptcy. However, the utility can require a deposit for future service and you do have to pay bills which arise after bankruptcy is filed.

Discrimination—An employer or government agency cannot discriminate against you because you have filed for bankruptcy. Government agencies and private entities involved in student loan programs also cannot discriminate against you based on a bankruptcy filing.

Driver's License—If you lost your license solely because you couldn't pay court-ordered damages caused in an accident, bankruptcy will allow you to get your license back.

Co-signers—If someone has co-signed a loan with you and you file for bankruptcy, the co-signer may have to pay your debt. If you file under Chapter 13, you may be able to protect co-signers, depending upon the terms of your Chapter 13 plan.

Evans Law in the Media

"We're having great results using the rule," said Brette Evans, a San Jose bankruptcy lawyer. In one recent case, a small-business owner was able to hang on to her home by setting aside a $240,000 second mortgage, she said.

mercurynews.com | View Article

Silicon Valley | Mercury News.com
NACBA National Association of Consumer Bankruptcy Attorneys ARAG US Legal Services | Providing Legal Benefit Plans Yelp The State Bar Of California

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