Archive for the ‘Bankruptcy Advice’ Category.


Mar 2012


San Diego Bankruptcy Review. Should You File?

Author : admin

If you live in the San Diego or Imperial counties this Debt Free League Blog review will help you make a more informed decision on filing San Diego bankruptcy.

Court Venue: U.S. Bankruptcy Court
District: Southern District of California
Building: Jacob Weinberger U.S. Courthouse
Address: 325 West F Street
San Diego, California 92101
Telephone: (619) 557-5620

Chamber 1: Room 218
Judge: Margaret M. Mann
Telephone: 557-5848

Chamber 2: Room 118
Chief Judge: Louise D. Adler
Telephone: (619) 557-5661

Chamber 3: Room 129
Judge: Laura S. Taylor
Telephone: (619) 557-6580

Chamber 4: Room 328
Judge: Peter W. Bowie
Telephone: (619) 557-5158

Chamber 5: Room 318
Judge: James W. Meyers
Telephone: (619) 557-7642

San Diego BankruptcySan Diego bankruptcy can be a great step helping people in debt to gain a fresh start. But, observing the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), the rules have become more rigid. The following information will help you determine if you should consider this debt elimination solution.

San Diego Bankruptcy (Chapter 7):

San Diego bankruptcy filers that can’t repay predominantly file for Chapter 7. Such bankruptcy discharges most debts and does not require filing a plan of repayment like Chapter 13. As such, attorney fees for a Chapter 7 case are generally lower than for Chapter 13 cases.

There are three main downsides of San Diego bankruptcy via Chapter 7:

1) To start a Chapter 7 bankruptcy case, the debtor must first pass a means test, which determines to the bankruptcy court if the debtor can pay back at least a portion of the debt;

2) Chapter 7 requires surrendering your nonexempt property to a bankruptcy trustee to be liquidated and have the proceeds distributed to unsecured creditors;

3) Not all debts can be discharged in Chapter 7, such as alimony and child support, certain taxes, educational debt, and government-guaranteed loans.

San Diego Bankruptcy (Chapter 13):

Chapter 13 is recognized as the Wage Earner’s Plan because it is typically filed by San Diegans that are actively employed. You would file this type of bankruptcy in order to retain ownership and possession of assets. But, in exchange, a portion of your income must be dedicated to repay debts that you owe to creditors.

You must generally repay 30-50% of your debt through a court ordered debt repayment plan. The value of your property and income/expenses determines the amount of the Chapter 13 debt repayment plan and the repayment period, which takes 3 to 5 years.

A major downside of Chapter 13 is that you can’t miss any of your payments. Otherwise, the bankruptcy trustee is likely to motion San Diego bankruptcy court to dismiss your case.

Other “Should I File Bankruptcy” Concerns…

Don’t fall for the low-ball bankruptcy ads. In truth, aside from having to pay attorney fees, San Diego bankruptcy also has court filing fees. As required by the United States Bankruptcy Court, Southern District of California [28 U.S.C. §1930], effective 10/01/08 to 11/01/11, the Chapter 7 case court fee is $299.00 to 306.00 ($245 filing fee; $39.46 administrative fee; $15 trustee surcharge). The Chapter 13 case court fee is $ 274.00 to 281.00 ($235 filing fee, $39 46 administrative fee).

Another issue is that prior to filing San Diego bankruptcy, the new bankruptcy code also requires you to get credit counseling from an approved consumer credit counseling agency. Plus, you must get personal financial management education from an approved consumer credit counseling agency before your bankruptcy case can be discharged.

If you don’t qualify for Chapter 7, you don’t want to risk having to liquidate valued assets, or own a great deal of nonexempt property that can’t be discharged through bankruptcy, you ought to consider another debt elimination option. A good one is the Debt-to-Freedom Plan. Similar to Chapter 13, this bankruptcy alternative helps you repay a small fraction of what you owe. And, the massive savings can get you out of debt in a short 12 to 36 months. Best of all, unlike a Chapter 7 bankruptcy, it won’t force you to surrender nonexempt property.

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By Vic Chevalier

If you seek serious debt consolidation, chapter 13 bankruptcy can provide essential debt relief. But, according to the new bankruptcy law, it can also cause you some pain that you need to be aware of.

Although it does not wipe out all debts, chapter 13 can be a smart way to consolidate debt and repay creditors based on how much you can afford to pay. But, below are 9 reasons why this clearly isn’t a sexy debt consolidation:

1. Chapter 13 Bankruptcy Remains on Credit Reports for 7 Years

According to Experian, “declaring bankruptcy has the greatest single impact on credit scores.” On credit reports, accounts state, “Included in bankruptcy”, which damages opportunities to get credit cards, signature, car, or mortgage loans, and to get insurance or to rent an apartment.

2. Protection from Creditors Immediately Stops After a Case Dismissal

If your debt consolidation payments are late and your case is dismissed, collection activity will resume, your car can be repossessed, and the bank can resume foreclosure on your home.

3. You Must Wait Six Months to Reapply

After a chapter 13 bankruptcy discharge, you must wait 6 months to reapply.

4. It Costs More Money to File for Bankruptcy

The filing procedures of chapter 13 are more rigorous than for 7. Thus, attorney fees are relatively higher. Additionally, besides the $299 mandated court fee, you may have to pay credit counseling course fees.

5. Requirement of a Credit Counseling Session before Filing

Before you can file for chapter 13, you must complete a counseling session. This includes a financial evaluation, discussion of bankruptcy alternatives, and presentation of a personal budget plan by a credit counselor. You must also provide a certificate of completion of the counseling session.

6. Requirement of Debtor Education from an Approved Credit Counseling Organization

Before your case can be discharged and you get any debt consolidation benefit, you must complete Debtor Education with an approved credit counseling organization. You must also provide a certificate of completion.

7. Chapter 13 Requires You to Repay Approximately 50% of Your Debt

Chapter 13 isn’t the prettiest means to consolidate debt. Generally, you have to repay 50% of the creditors claim spread over a 36 to 60 month repayment plan. Thus, if you owe $10,000, you may be forced to repay $5,000.

8. Two Thirds of Chapter 13 Cases are Dismissed or Converted to a Chapter 7

If you fall behind on payments, the bankruptcy trustee will file a motion to dismiss your case. In cases where you can’t afford to make the payments, your case may be converted to a chapter 7.

9. Unpaid Debts for Child Support or Alimony Can Jeopardize Your Bankruptcy

If your payments on child support or alimony are delinquent, the U.S. Bankruptcy Courts will not permit you make a chapter 13 plan or discharge your debts via chapter 7.

Knowing the facts on chapter 13 will help you make the proper step in debt consolidation. Also, ensure to evaluate all of your bankruptcy alternatives so you can make the right decision to consolidate debt.

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