Michael Taibi, San Diego Bankruptcy Attorney

San Diego Bankruptcy Attorney

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We are very proud of the services we provide and how we help clients resolve their financial issues. Our office offers a complimentary, in-person, no-obligation consultation with experienced attorneys who can professionally advise you on your best course of action. Contact us today at 619-488-6168 to begin the journey to a fresh financial future.

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Bankruptcy Basics in San Diego

What is Bankruptcy?

Bankruptcy is a legal process through which a person who is struggling to make payments on his/her debts and/or bills, is able to gain financial relief. The legal right to file for bankruptcy is a right provided by federal legislation, thus all bankruptcy cases in California are dealt with by the federal court system. Filing for bankruptcy not only provides you with long term relief, it also helps you gain breathing room in the short term, as filing for bankruptcy automatically stops creditors from attempting to collect any money you might owe, until your debt situation has been handled in court.

Advantages and Disadvantages of Declaring Bankruptcy

There are many advantages to declaring bankruptcy in California. Bankruptcy may allow you to eliminate most or even all of your debts, depending on your unique financial situation. Declaring bankruptcy may help you prevent the repossession of vital property in your life, such as your car or other motor vehicle. It may also help you stop foreclosure on your home, and stop debt collection services from harassing you and/or garnishing your wages. Also, as mentioned in the paragraph above, declaring bankruptcy will relieve you from any immediate debts, as the court system will issue you an automatic stay. Lastly, bankruptcy laws make it illegal for employers to discriminate against you for declaring bankruptcy, so doing so shouldn’t have a negative effect on your employment future.

However, nothing in life is without consequences, and there are certain drawbacks associated with declaring bankruptcy that one should be aware of before entering the process. Declaring bankruptcy will not eliminate all of your debts, such as your recent back taxes or fines currently owed to any government agencies. Also, filing for bankruptcy will have a negative effect on your future credit score. This may make it more difficult to secure a loan for a car or for a home in upcoming years. Additionally, your bankruptcy filing will have to made public record by law, meaning anyone can request a copy of your filings and examine the details of your bankruptcy. Lastly, shady credit lenders have been known to target people who have recently declared bankruptcy, so you may be targeted if you do end up filing for bankruptcy.

Types of Bankruptcy

In California, there are two basic kinds of bankruptcy available to people looking for financial relief: Chapter 13 and Chapter 7. Each of these two forms of bankruptcy is associated with certain benefits and drawbacks, depending on your unique financial situation.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also referred to as liquidation bankruptcy, gives a person the ability to discharge their debts and gain a fresh start, if they meet the qualifications for Chapter 7.  After filing your bankruptcy petition, you will be given a hearing date, usually within 1 to 2 months. At this hearing, a trustee will first make a decision on whether or not you qualify for Chapter 7 bankruptcy. While the process a trustee employs to make that decision is too complex to explain in full detail here, generally the decision is based on your active income. If you currently earn lower than the median income of Californians with households of a similar size, then you will be eligible for Chapter 7 bankruptcy. If you currently earn higher than the median income of Californians with households of a similar size, then the trustee will use a means test to determine your eligibility.

If you fully qualify for Chapter 7, then the trustee is granted the power to seize all of your assets and sell them to recuperate the losses incurred by your debts, except assets which are exempt under California law. Since California maintains relatively generous exemption laws, most people won’t have to give up important pieces of property, such as a house or a car. The money netted by the liquidation of your assets is then redistributed to your creditors in order to pay back as much of your debts as possible. Also, the trustee takes a small commission for handling the sale and distribution. Note that certain kinds of debt can’t be discharged through Chapter 7, such as child support, alimony, student loans, or a few other kinds of debt. Usually, a person filing through Chapter 7 is someone with substantial credit card debt, and not a lot of assets. For these type of people, Chapter 7 is a highly effective way of eliminating debt, in fact most people in this situation are able to have all of their debt eliminated within 3-4 months.

It costs a total of $306 to file for bankruptcy under Chapter 7 in the state of California.

Chapter 13 Bankruptcy

If you find that you aren’t eligible for Chapter 7 bankruptcy, then you can try and file via the Chapter 13 route. While Chapter 7 is a quick debt-relief option that allows you to discharge most or all of your debts within a period of a few months, Chapter 13 allows you to reorganize your debt over a much longer period of time, usually somewhere from 3-5 years.

Through Chapter 13 bankruptcy, you and the trustee assigned to you will conjointly create a plan to pay off most or all of your debt over 3-5 years, with the length of the plan depending on the amount of debt you have accrued. To qualify for Chapter 13 bankruptcy, you must maintain a source of regular income that can be used to repay your debts. This plan will obligate you to make monthly payments to the trustee, who will distribute this money to your creditors. If you follow the agreement and make all of your payments on-time, then the rest of your debt will be discharged at the end of the plan. The advantage of a Chapter 13 bankruptcy is that it can allow you to hold onto secured assets that might otherwise be liquidated through a Chapter 7 bankruptcy.

It costs $281 to file for bankruptcy under Chapter 13 in the state of California.

Note: There are two other forms of bankruptcy available: Chapter 11 and Chapter 12. However Chapter 11 is used almost exclusively by businesses, and is only used by individuals with very large debts and assets. Chapter 12 bankruptcy is reserved only for family farmers, and cannot be utilized by individual debtors.

How to File for Bankruptcy in California

The first step to filing bankruptcy in San Diego is to collect the required legal documentation. This includes your recently filed tax returns, a list of all your bank accounts, valid identification, proof of ownership of valuable assets, and evidence of your income stream. Next, before entering the bankruptcy legal process, you are required by California law to participate in a credit counseling service that has been approved by the California court system. This service will assist you in reviewing your financial predicament and help you decide if you want to pursue bankruptcy. This step is not optional, a failure to participate in credit counseling will result in your case being dismissed. The last step is to consult a bankruptcy attorney, who can guide you through the bankruptcy process. While some people do file for bankruptcy without legal help, the success rate for such cases is less than 1%.

We Understand Your Needs

The costs of living in San Diego and Southern California are higher than in most other parts of the US, and therefore, when financial hardships strike those living in our region, the effects can be felt that much more acutely.

If you lose your job, suffer a pay cut or demotion, suffer an accidental injury, are going through a divorce, or have simply been hit with unexpected expenses that are overwhelming you financially, bankruptcy may be a way to get a fresh start.

No one wants to declare bankruptcy, but when other measures fail and your financial situation becomes chronically impossible to manage - when you are buried in debt you could never reasonably hope to pay off; then, it's time to consider bankruptcy as an option.

At San Diego Bankruptcy Attorney, we can help you better understand California bankruptcy law and how it would apply in your specific situation. Bankruptcy may be able to eliminate your dischargeable debts, prevent wage garnishment or bank levies, save your home and/or car, and stop creditors' from bombarding you with collection phone calls.

We can help you weigh your options and make an informed decision on your best path forward financially.

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Our Practice Areas

We at San Diego Bankruptcy Attorney have extensive experience in all types of California bankruptcies and in all the various issues that often arise during bankruptcy, debt settlement, and related matters.

Here are some of our most important and commonly dealt with practice areas (but note that this list is exemplary and not exhaustive):

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Contact US Today for Immediate Assistance!

At San Diego Bankruptcy Attorney, we stand ready to take your call for help. We have assisted many others in San Diego, Southern California, and beyond in getting out from under impossible debt and getting on their feet again financially. We can do the same for you.

Call us today at 619-488-6168 for a free, no-obligation bankruptcy consultation and immediate attention to your case.

Or, feel free to visit us for an in person consultation at our office located at:

750 B Street, Suite #2515,

right here in San Diego.

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