Filing Bankruptcy

The process of filing bankruptcy differs depending on the type of bankruptcy that is most appropriate for the debtor's situation. For a personal bankruptcy there are two appropriate chapters, or applicable sections of bankruptcy law, Chapter 7 bankruptcy and Chapter 13 bankruptcy.

Chapter 7 Bankruptcy Proceeding.

A Chapter 7 Bankruptcy, barring complications, takes approximately four and one-half months to complete. We file the bankruptcy petition with the Bankruptcy Court on behalf of the debtor. Filing the petition initiates the "automatic stay," which stops further collection efforts by the debtor's creditors. The Clerk Of The Court immediately assigns the debtor a judge, a trustee and a case number.

The trustee meets with the debtor approximately five weeks into the case to review the petition, schedules and statement of financial affairs. This meeting, called the meeting of creditors pursuant to 11 U.S.C. § 341(a), is the only formal appearance the debtor will likely have to make during the case.

In approximately ninety-five percent of the Chapter 7 cases filed around the United States each year, the trustee comes to the conclusion that the debtor has no assets worthy of liquidation, because most debtors' assets are either encumbered, leased, exempt under California law, or of immaterial value, in which case the trustee files a "report of no assets" with the Clerk of the Bankruptcy Court. In the other approximately five percent of the Chapter 7 filings, the trustee does liquidate some unencumbered nonexempt assets, from which he pays first his own fees and the fees of his attorneys, accountants and other professionals, and then pays creditors to the extent funds are available.

Chapter 13 Bankruptcy Proceeding.

Chapter 13 Bankruptcy is known as an "individual debt adjustment" bankruptcy. The debtor proposes a plan to repay creditors at least in part over a period of usually no less than thirty-six months and never more than sixty months. The debtor must repay all mortgage arrearages for properties the debtor wishes to keep, all recent tax obligations, and all delinquent child support and alimony obligations. The debtor must devote all disposable income to the plan for a minimum of thirty-six months. And the debtor must pay his or her creditors at least as much as creditors would have received in a Chapter 7 liquidation proceeding. If the debtor makes all of the payments required, he or she receives a discharge from the Clerk of the Bankruptcy Court. Don't wait until it is too late.

For more information, or to discuss your situation with our experienced bankruptcy attorneys, contact the Law Offices Of Hagen & Hagen today to arrange your initial consultation.

We represent clients throughout Southern California, including Los Angeles County, Orange County, Riverside County, San Bernardino County, Santa Barbara County, Ventura County and San Luis Obispo County. We see clients from all over the greater Los Angeles area, including Santa Monica, Long Beach, Anaheim, Pasadena, Orange, Huntington Beach, Newport Beach, Garden Grove, Irvine, Yorba Linda, Riverside, San Bernardino, Pomona, Torrance, Simi Valley, Mission Viejo, Ontario, Glendora, and Covina.