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Frequently Asked Questions

Can I be free of my debt by filing for bankruptcy?
A large number of debts are discharged in Chapter 7 bankruptcy. These include credit card bills, medical bills, overdue utilities, phone bills and other unsecured debt. Most people who file for bankruptcy are free from a large percentage of their outstanding debt. Each individual or couple has a unique circumstance that must be addressed as such. Get your case evaluated from an Irvine bankruptcy lawyer from Peter Rasla & Associates, P.L.C. and you can find out specifically what debts would be discharged in filing Chapter 7.

Will my credit be destroyed for years?
It is an interesting point that a foreclosure can frequently have a worse effect on credit than filing for bankruptcy. Most people who file are already in serious trouble with their credit; filing for bankruptcy at least allows their credit report to show that they no longer owe those outstanding obligations. If you carefully manage your finances, it is likely that you will get credit offers within a short period of time, usually at a high interest rate. If you carefully manage the situation going forward, you can expect to have your credit improving quickly as time passes.

I heard that your credit card debt will be discharged. Is this true?
In Chapter 7 bankruptcy, unsecured consumer debt is discharged. Many don't realize that recent purchases on credit cards WILL NOT be discharged, and they believe that if they are going to file for bankruptcy, they may as well use their cards to the max. This is a very bad idea, as those purchases will not be eligible for discharge, and this is one of the many bankruptcy myths out there. Get your information from a trusted source on all such issues, and the firm is here to help.

Why would you file Chapter 13?
In many cases, the individual involved has too high of an income to qualify for Chapter 7. They can then file Chapter 13 which allows them a 3 - 5 year period to pay off overdue obligations, and also allows them to keep their property.

Will I qualify for bankruptcy?
Most people who are under severe financial stress will qualify. We can evaluate your personal financial situation and tell you within a short period of time whether you qualify for Chapter 7 or Chapter 13.

I have a steady income. Can I still file?
It is a common misconception that people filing for bankruptcy are out of a job and have no form of wages. Many filers actually have good jobs, but have a lot of expenses. The cost of living is incredibly high and with a poor economy almost everyone can feel the effects in some way. Since debtors have differing situations, there are also differing types of bankruptcy. Two common ones are Chapter 7 and Chapter 13.

Chapter 7 is for those with more serious debt that have no way of paying it. While it can wipe out more debt, it can also come with downsides. Chapter 13 can allow a debtor to keep most or all of their assets and simply offers aid for meeting expenses. This can be a great option for those that have a job but have faced trouble meeting all their costs. Through this form, debts are lumped together and a payment plan is made. This is usually around three to five years.

What is the means test and why do I need to take it?
The means test was establish by the government as a response to the number of individuals filing for bankruptcy that did not necessarily need it. Bankruptcy is an extreme choice and should not be taken lightly. The means test assesses the income of a person filing and compares it to the average income in their area. There are other factors involved, but for the most part a person that has an income above the average will not qualify to file. This is in regards to being eligible to do so under Chapter 7 and a person that does not pass the means test will still have the option of filling for another form.

Can co-signers be protected if I file?
When filing for bankruptcy, there is a possibility that your co-signer can be protected, though only in certain types of bankruptcy. Under Chapter 7, the creditors will likely go after your co-signer regardless of the bankruptcy file. However, if you choose to file for Chapter 13, they can be protected under certain circumstances. One important factor to be aware of in these circumstances is that in the event you fail to meet the Chapter 13 requirement laid out for you by the court, the creditors may still go after your co-signer.

How to I put a stop to creditor harassment?
Creditor harassment is an overwhelming thing for any person to experience, especially when they are already feeling the pressures of their debt. In order to end creditor harassment (via phone calls, emails, etc.) you will want to discuss your options with an Irvine bankruptcy attorney to see if bankruptcy or any other option of debt relief will be best for you.

What if I don't want to file for bankruptcy?
There are alternatives to filing and bankruptcy is not right for every case. Every client may have different needs and it is important to work with a professional that can review this and act accordingly. Loan modifications are one option and this is for those with a mortgage that they can no longer keep up with. Through a modification, you work with lenders to adjust the terms of the loan and find an agreement that works for the both of you. This can allow you the option of reducing the monthly amount, lowing the principal balance or possibly removing late charges. It is best to take action before you fall behind and suffer further debt. If you are unsure about bankruptcy you should talk with a professional about the other alternatives before you are put in the position of having to file.

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