1. My lender is threatening foreclosure. How long can I live in my home before the property is sold? In California, if your home is secured by a trust deed, lenders usually resort to nonjudicial trustee's sales in order to foreclose on property. Pursuant to California law, a lender contemplating a nonjudicial foreclosure must first record a Notice of Default, giving the homeowner 3 months to pay any loan delinquencies. Thereafter, the lender must record a Notice of Trustee's Sale, giving the homeowner an additional minimum of 21 days notice before the foreclosure sale. The filing of a bankruptcy by a homeowner will typically delay a foreclosure and in many cases repayment plan can be devised in bankruptcy avoiding the foreclosure altogether. For information regarding judicial foreclosures, which are uncommon in California, consult an attorney

 
2. My friends tell me I should file bankruptcy but I'd rather not. Should I file? Despite the claims made in some late night TV commercials, bankruptcy is a serious matter which should be used only as a last resort to give the debtor a fresh start. On the other hand, there is far less stigma attached to filing bankruptcy today than in years past, and it is not uncommon to see debtors qualify for certain real estate loans after two years from the date of bankruptcy discharge, and sometimes even within one year. Filing bankruptcy should be your choice after you have carefully looked at alternatives to bankruptcy. In certain cases, you may be able to settle with creditors for as low as 10 to 30 cents on the dollar, to rewrite debt obligations, to obtain IRS offers in compromise, or to propose repayment plans, instead of filing bankruptcy.

 
3. What are differences between Chapter 7, 11, and 13 bankruptcies?
Chapter 7 bankruptcy is the most common type, which involves liquidation except to the extent that your assets are exempt (see #4 below). Chapter 13 is an individual debtor's repayment plan currently available to debtors who have secured debts (e.g. mortgages or car loans) of less than $807,750 and unsecured debts (e.g. credit cards, judgments, medical bills) of less than $269,250. In Chapter 13, a debtor may propose a plan whereby they can pay back certain arrearages on secured debts and taxes, typically for 36 months and up to 60 months. Chapter 11 (including the more streamlined small business Chapter 11) typically involves major reorganization and is usually used to reorganize debts when a debtor does not qualify under Chapter 13.

 
4. Will I lose all my assets if I file bankruptcy? No. In California a debtor is allowed to exempt and retain certain assets, depending upon which of two sets of exemptions a debtor elects. For example, a debtor who is a head of household may claim up to $75,000 in the equity in their personal residence, and certain debtors may claim up to $100,000. Other exemptions apply to cars, tools of the trade, wearing apparel, furniture and personal effects, retirement accounts, jewelry, and other assets. See California Code of Civil Procedure §§703, 704.

 
5.What is the Court filing fee for bankruptcy? (Updated 5/16/00) In the U.S. Bankruptcy Court for the Central District of California, which encompasses the counties of Los Angeles, Orange, Riverside, San Bernardino, Ventura, and Santa Barbara, the court filing fees currently are: $200 for Chapter 7, $185 for Chapter 13, and $800 for Chapter 11. Note that filing fees do change and you should consult that bankruptcy court or an attorney before filing. Attorney's will typically charge a flat fee for the bankruptcy and represent their clients at the bankruptcy hearing.

 
6. I live in Southern California. Where do I file bankruptcy? In Los Angeles, the U.S. Bankruptcy Court is located at 255 East Temple Street, Los Angeles. The San Fernando Valley Division is located at 21041 Burbank Blvd, Woodland Hills. The Santa Barbara Division is located at 222 East Carrillo Street #101, Santa Barbara. The Riverside Division is located at 3420 Twelfth Street, Riverside. The Orange County Division is located at 411 West Fourth Street, Santa Ana. The Bankruptcy Court for the Southern District of California is located at 325 West "F" Street, San Diego.

 
7. Can I wipe out my taxes by filing bankruptcy? In certain cases, yes! Pursuant to the U.S. Bankruptcy Code 11 U.S.C. §507, certain income taxes may be discharged (i.e. wiped out) if all three of the following conditions are met: the taxes became due more than three years from the date of bankruptcy filing, a tax return was filed more than two years before, the taxes were assessed more than 240 days from the date of bankruptcy filing. In addition, taxes cannot be discharged if there was any fraud involved. Note that the laws regarding the dischargeability of taxes in bankruptcy are complex and you are well advised to seek an attorney.

 
8. Will I lose my credit cards if I file bankruptcy? In certain cases you may retain some credit cards even if you file for bankruptcy, subject to the approval of your credit card provider. Most department store cards can be retained if you sign a reaffirmation agreement whereby you agree to resume payments on those cards. Reaffirmation agreements must be approved by the Bankruptcy Court in order to determine whether they are fair to the debtor. Certain unsecured credit cards sometimes may be retained, depending upon the credit card provider and upon the Debtor's past payment history. Secured credit cards can usually be kept and can be can also be used to reestablish good credit after a bankruptcy. (See "What You Need To Know About Credit Scores And How To Improve Them")

If you would like more information or would like to obtain a free no obligation special report on how to improve your credit call Darren Gordon Smith, a Professional Law Corporation today at (714) 505-2700.

DISCLAIMER: THE ABOVE IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS LEGAL ADVICE. PLEASE BE AWARE THAT LAWS AND PROCEDURES ARE CONSTANTLY CHANGING AND ARE SUBJECT TO DIFFERING INTERPRETATIONS. AS ALWAYS, IF YOU ARE FACED WITH A POSSIBLE FORECLOSURE OR BANKRUPTCY CONSULT AN ATTORNEY.