While our clients are rightly concerned with the cost of filing bankruptcy, we find that they often fail to vastly underestimate the cost of waiting too long to file a case, when the facts are clear that a case would be in their best interest. Credit card companies, medical bill collectors, and other creditors are experts at extracting every last dollar from people on the verge of insolvency. The creditors will call and ask for "just one more payment" for them to "forbear", when in fact, they actually have no immediate ability to collect on their debt anyway because they have not sued and obtain a judgment.
Potential bankruptcy filers need to be aware the San Francisco and Oakland Divisions of the U.S. Bankruptcy Court have developed a new, more complex Model Chapter 13 plan. Your bankruptcy attorney needs to be familiar with the new plan to avoid pitfalls and traps and prevent delays to confirmation of your bankruptcy plan. Simply put, the old plan and old techniques will not work! Law Office of Jason Honaker attended meetings at the Courthouse and the Chapter 13 trustee's office regarding the new plan so we are prepared to help you. We have already filed several new plans based on the model plan. Note: Santa Clara County residents will not use the new plan - we can assist them in preparing the same San Jose Division plan that was used there in years before.
We are ready to help clients from San Francisco, San Mateo, Alameda, and Contra Costa Counties file a new Chapter 13 plan to save their home, car and other property - and stop collections like levies and garnishments on taxes and other debts. Call 650-259-9200 or send us a message today to schedule a free consultation so we can explain how we can prepare a new Chapter 13 plan for you.
How Much Does It Cost to File Chapter 13 or Chapter 7 Bankruptcy in San Jose and San Francisco? And how long will it take to get my case filed?
How much does it cost to file a bankruptcy case with an experienced consumer bankruptcy attorney in San Jose or San Francisco? It is hard for people to obtain this information online, and they do not want to have to come in for an office appointment just to know bankruptcy attorney prices. While the total cost may vary depending on how complicated the case is, we will currently represent debtors in Chapter 13 proceedings for as little as $400 as an attorney fee retainer to get the case filed, and we represent people in basic Chapter 7 proceedings for as little as $1200.00 + out of pocket costs. Unless the court will grant a fee waiver, all Chapter 13 and Chapter 7 filers are responsible for the court's filing fee, which is approximately $281.00 to $306.00. When need can be demonstrated, the court may allow the filing fee to be paid in installments.
Our goal to provide the best possible service at a very reasonable and competitive cost. Please contact us at 650-259-9200 to schedule a free consultation in Burlingame, San Francisco, or Campbell - or submit a contact form online and we will set up an appointment with you to review your case and give you a more exact cost estimate for your particular case. Have an emergency? No problem. We can make an appointment to see you in one of our offices within one business day. If necessary and appropriate, we can file an emergency bankruptcy petition the same day.
There is a common misconception that the Bankruptcy Code only provides relief to those without valuable assets or those with low incomes. In fact, Chapter 13 of the Code provides flexible forms of relief for taxpayers with any amount of assets or income, and the only limitation is on their debts.
Unfortunately, many people believe that bankruptcy relief is not available to them because they have for example, home equity (an asset) or a high-paying job (high income). This is incorrect, and people are missing out on the help the law intends to provide them. Many of these people still have the option of either a) paying back a fraction of their debts, and b) paying back their debts without interest, or with only a small rate of interest.
For example, according to Bankrate, if someone owes $25,000 on an 18% interest-rate credit card, and attempts to pay $500 on this balance each month, it will take them 66 months to pay the balance down to zero.
Had this client filed Chapter 7 bankruptcy and had no un-exempt assets, this debt would have received zero repayment, saving them hundreds of dollars a month. In Chapter 13, even if this individual had a very high income and very high assets - this debt could have been zeroed out sooner.
In practice, the vast majority of clients, even with incomes normally considered "high" would pay only a fraction of the debt back in bankruptcy. But the important point to remember is that bankruptcy is helpful for people at all income and wealth levels, and can be a very useful tool for them to get their financial house back in order without creditor harassment.
Please call or contact us via our website for a free, no-obligation consultation about your options for filing Chapter 7, Chapter 13, or working out your debts without filing bankruptcy.
False. Non-priority IRS debts are dischargeable in bankruptcy. In Chapter 13 certain penalties, interest, and older taxes do not have to be accounted for in your plan. In Chapter 7, these non-priority debts may we wiped out entirely even though you do not have a repayment plan. It is a common misconception that all IRS debts need to be paid back.
File your returns in a timely and accurate fashion, and if you ultimately cannot pay those tax debts, you may have the option to discharge those taxes in bankruptcy. Unfortunately, many people who cannot pay their taxes make the serious error of not filing a timely tax return.
Call us today at 650.259.9200 or submit a consultation form online and we can meet with you for a free consultation to discuss how bankruptcy can resolve your tax problems.
The Wall Street Journal reported today that Sen. Durbin will introduce new legislation today that would make private student loans dis-chargeable in bankruptcy. As a general matter, student loans are not currently dis-chargeable. Under this legislation, public loans would still survive bankruptcy, but privately issued loans, which often carry higher interest rates and less terms, might be wiped out.
Relief from other debt in bankruptcy already makes student loans more affordable, and bankruptcy can put student loan creditors on hold even when the debts are not discharge-able. If intervening law changes, a Chapter 13 bankruptcy might potentially be dismissed and re-filed, or re-filed under another Chapter, to take advantage of more reasonable future laws. Contact us if you would like a free consultation to discuss how to manage debts that include student loan obligations.
One of the primary benefits of the bankruptcy process, in particular Chapters 11 and 13, are the ability to "strip-off" mortgages on a primary residence or second property. Chapter 13, when available, is simpler and usually more cost-effective. However, to strip-off a second lien in Chapter 13, it is an all-or nothing proposition. What may be an "all" proposition in 2012 and early 2013 may very well be a "nothing" proposition in late 2013.
Why? Rising home prices in the Bay Area.
Simply put, if it can be demonstrated that the house is worth less than the balance of the first mortgage, the second loan can be "stripped off" in a Chapter 13 bankruptcy proceeding. If, however, the house is a primary residence and its value can be demonstrated to be higher than the balance on the first mortgage, the lien strip is simply not available.
According to DataQuick, California real estate prices rose 17 to 18% in San Jose and San Francisco over the last year. Economists are predicting modest gains in housing prices next year across the U.S., and stronger gains in the Bay Area. Many home buyers whose homes were "underwater on the first mortgage" will become "underwater on the second mortgage only." Those underwater on the second only can't "strip off" liens - i.e. emerge from a Chapter 13 bankruptcy with only one mortgage.
Accordingly, if your house is arguably worth less than the balance on the first mortgage, and you have a second mortgage, you should act now and investigate your ability to strip the second mortgage in Chapter 13 before it is too late.
If you would like a free consultation about lien stripping in Chapter 13, please call us at 650.259.9200 in Burlingame or 408.520.9301 in Campbell.
One of the recurring problems we see in the office lately are individuals waiting until their financial situation improves before investigating their bankruptcy options. This is another situation where doing the "right thing" puts you at a disadvantage under our country's complex bankruptcy laws.
Why? Under the 2005 Bankruptcy reform legislation, debtors are subjected to "means testing" to determine whether they qualify for bankruptcies that involve no or merely-fractional payment of future income to general unsecured creditors via a Chapter 7 or Chapter 13 plan.
An oversimplified example to clarify what we are trying to say is as follows:
1) John D. is an unemployed software engineer in South San Francisco. His last opportunity for unemployment insurance ran out three months ago. He has been searching for permanent employment, and has several good leads for possible job interviews.
2) John D. lives in a rental apartment. He owns no real property, and drives a 2001 Toyota that is paid for.
3) In 2008, John D. made $88,000 a year. During the financial crisis of 2008-2009, he lost his regular job with a financial company, and has been unable to find a good paying, permanent job since then. His income has been up and down, and he has been working on a project basis off and on. His 2011 Tax Returns indicate gross income of $40,000.00.
4) John D. has a $17,000 judgment for a repossessed car recorded against him, and $43,000 of credit card debt once you include the interest and late charges that have accrued. The car lender is threatening to levy his bank account, which has $10,000 of savings.
If John D. files bankruptcy before he secures a job, he would likely make no repayment to unsecured creditors, his bankruptcy would wash away his debts entirely.
However, if John D. secures employment earning $122,500 a year, for example, and files bankruptcy, say, six months later, absent a change in his financial circumstances - he might have to repay his debts in full over five years. The net outcome? Waiting to file could cost John D. up to $60,000, and the lost income opportunities on that $60,000.
It is always best to investigate your bankruptcy options before you secure new employment. If you feel that your job prospects are improving, but that you have unmanageable debt, contact us to today for a free consultation in one of our Bay Area offices.
Note that merely securing employment does not mean you will have to repay all your debts in bankruptcy. Whether debts have to be repaid, and the amount, depends on many factors. Notably, it is far better to file bankruptcy while your secured debts are high, rather than after a repossession or foreclosure. Too complicated? Don't worry, we can simplify it for you at an in-office appointment.
Questions or want to make an appointment? Call us today at:
650.259.9200 Burlingame / S.F. Peninsula
408.520.9301 Campbell / South Bay
We often get questions regarding the following issues:
1) After bankruptcy, will I be able to get credit?
2) How long will I have to wait until I get new credit?
The New York Times recently ran an informative article on this issue and we intend to provide it to our clients in the future.
You will very likely be able to get new credit after your bankruptcy if you are able to afford to pay the bills. The waiting time varies - some people may qualify for new credit immediately after receiving a discharge, others may have to dedicate more time to rebuilding their credit. Whether you can get credit immediately will depend on your overall financial situation.
Of course, we advise everyone to make do as best as possible without using credit. The interest rate and terms of the loan will likely be less favorable than the lender's "best rates," but credit is available. Generally, when people come into our office, they would most likely be unable to obtain credit for necessary life purchases at that time because of missed payments or an unmanageable debt load, so bankruptcy ultimately improves their standing.
The New York Times points out the following guidelines for new home loans:
FHA Loan = 1 year after Chapter 13 completion or 2 years after Chapter 7 discharge
Fannie Mae / Freddie Mac Loan = 2-4 year waiting period
Rebuilding cannot start until after bankruptcy. We generally see people filing after struggling for years with an unmanageable debt load, and these good intentions unfortunately delay their recovery by many years. Waiting until one's income improves can also lead to situations where the court demands a repayment of debts that otherwise would have simply been discharged.
Call us today at 650.259.9200 to set up a free consultation if you would like to discuss a potential filing.
We regularly get calls from people who assume that their taxes cannot be wiped out in bankruptcy. The good news? Actually, old taxes can be wiped out in bankruptcy, as can penalties and interest on more recent taxes. This can stop IRS or Franchise Tax Board paycheck garnishments and levies and help you get back on your feet.
Bankruptcy code is especially helpful if you filed your returns on time, but simply could not afford to pay. But the burden of new taxes can be greatly reduced and repayment of taxes that can't be wiped out can be spread over a long time period. We can explain to you in more detail the multi-part test for whether tax debt is dis-chargeable (capable of being wiped out) in bankruptcy at a free office appointment.
Are you considering an IRS payment plan? You might be able to pay much less by wiping out taxes, penalties, and interest in a Chapter 7 or Chapter 13 bankruptcy. You can put all your creditors on hold while you work out something manageable under court supervision. Taxes and bankruptcy are complicated issues and each situation is unique.
There is a common misconception that people can't afford an attorney. It's not true. We make our help affordable to you. We offer very reasonable payment plans so that any Chapter 13 attorney fees can be paid over up to 60 months, depending on your situation; we allow you to pay your Chapter 7 fees in installments before your case is filed.
Call us at 650.259.9200 or schedule a free consultation online.
Request a Consult or Call Back Online, or Call Us at 650.259.9200
Law Office of Jason Honaker