Bankruptcy FAQ

Who may file a Chapter 7?

Individuals, married couples, partnerships and corporations may file a petition under chapter 7. However, if you can’t file a chapter 7 case if you filed a chapter 7 less than eight years before and got a discharge in that case.

Who may file a Chapter 13?

Only individuals with regular income can file under chapter 13. What this means is that corporations may not file under chapter 13. However, if you are operating a business, even if it’s a corporation, you may still file.

Can businesses or corporation file bankruptcy?

Businesses may file bankruptcy. Generally, when a corporation or a partnership files for bankruptcy they cease to exist – they are terminated as part of the bankruptcy.

What is the timeline for a Chapter 7?

The first step in a Chapter 7 is meeting with one of our experienced bankruptcy attorneys. During that time the attorney will go over your situation and advise you.

Once your retain us, we start a chapter 7 case by collecting information about you: your names, your social security numbers, where you work, etc. We also collect information about your income and we go over your paystubs, your income tax returns, your bank statements and your bills. During this process you will be personally meeting with someone from our staff. Generally this will be one of our paralegals who will follow your case from beginning to end.

Once your bankruptcy petition is drafted you will meet with the attorney who will go over your bankruptcy petition, schedules and statements. Your petition is then electronically filed with the bankruptcy court in Riverside, California.

A month or so later you must attend a hearing in Riverside which hearing is referred to as a “Meeting of Creditors.” The hearing will be conducted by a trustee, who will check you ID’s and ask you questions about the paperwork. One of the attorneys from our office will be present to represent you at that hearing.

A few months after the meeting of creditors you should get a “Discharge” in the mail. With that discharge, you bankruptcy case is over and file gets closed.

The whole chapter 7 process lasts about four months from beginning to end.

What is the timeline for a Chapter 13?

The first step in a Chapter 13 is meeting with one of our experienced bankruptcy attorneys. During that time the attorney will go over your situation and advise you.

Once your retain us, we start a chapter 13 case by collecting information about you: your names, your social security numbers, where you work, etc. We also collect information about your income and we go over your paystubs, your income tax returns, your bank statements and your bills. During this process you will be personally meeting with someone from our staff. Generally this will be one of our paralegals who will follow your case from beginning to end.

Once we have all the information that is needed we prepare the bankruptcy case for filing. You will then meet with the attorney who will go over paperwork with you.

About a month later there is a hearing in Riverside with the chapter 13 trustee. You will make your first payment to the trustee at the hearing. After that you will be mailing chapter 13 plan payments directly to the trustee.

A chapter 13 case can go on anywhere between three and five years. Once your plan is complete you will get a discharge and you case will be over.

What is a “Discharge"?

Your goal in filing bankruptcy is to get a discharge. The discharge is that final order from the bankruptcy court indicating that you no longer have an obligation to pay most of your debts.

Certain debts are not discharged in a bankruptcy case. Among these debts that are not discharged are taxes, child or spousal support, criminal fines and student loans.

Who is the “Trustee"?

The bankruptcy trustee is the individual who is appointed to administer your case.

Is there a class I need to take to file bankruptcy?

Yes, prior to filing a bankruptcy you must attend a credit counseling course. Also, before your case is over you must also take a “Debtor Education Course.” Once you retain our office we provide you with the name of the provider. These classes are taken on-line and by telephone.

Do I need to get a copy of my credit report?

No. When you file bankruptcy you must list all of your creditors in your paperwork. To assist in determining your creditors our law firm will get a copy of your credit report which we will use in completing your paperwork.

How often can you file bankruptcy?

An individual may obtain a discharge in a chapter 7 case eight years after having filed a previous chapter 7 case.

For a chapter 13 case, it depends on whether a discharge was obtained in that prior case. If so, the wait is two years.

Can a Chapter 7 Case be denied?

Yes. A Chapter 7 case can be denied where a person earns too much money: that is where they can pay back all or a portion of their debt. Also, where the debtor fails to disclose all their property in the bankruptcy petition, or fails to account for their income or expenses, or does not cooperate with the Trustee, the case can be dismissed without a discharge.

Also a case can be denied where a debtor has engages in “abuse.” An example of abuse would be where the debtor has planned the bankruptcy by incurring a lot of debt before filing, or has incurred debts for luxury goods or services.

Does filing Bankruptcy stop garnishments, foreclosures or levies?

The filing of bankruptcy stops foreclosures, levies and garnishments from your creditors. When you case is filed the court issues an “Automatic Stay” which stops these collection efforts. Our firm will ensure that your creditors comply with the automatic stay.

The automatic stay does not stop wage garnishments for child or spousal support.

Is filing a Chapter 13 better than filing a Chapter 7 for my credit rating?

Chapter 13 is a repayment plan: your creditors will get repaid. However, it still is bankruptcy and most creditors will hold it against you. Therefore, for credit rating purposes, chapter 13 is really no better than chapter 7.

Please keep in mind that the information contained in this FAQ is for general information purpose only, and is not the substitute for the advice of a bankruptcy attorney. Everyone’s circumstances are different and only a qualified bankruptcy attorney can advise you of the consequences of filing. If you have additional questions or concerns, or you want to know what might be best for your particular circumstances, please give us a call and come in for a consultation.