Is Bankruptcy for Me? Do I need a Redding Bankruptcy Lawyer?
In 2009, there were over 1.4 million bankruptcy cases filed in United States District Courts. That was an increase of 34 % from the previous year. Within the Ninth Circuit, which includes northern California, the 2009 number was 310,000, an increase of over 61% from 2008.
The first thing a person needs to understand when contemplating bankruptcy is that you are not alone. If your situation justifies filing for financial protection under the bankruptcy laws, you are not the first, nor will you be the last. Title 11 of the United States Code is commonly called the “Bankruptcy Code.” Bankruptcy came about before the year 1800. Before that, there were debtors’ prisons. In general, bankruptcy’s purpose was and still is, to give debtors a financial "fresh start" from burdensome debts. In the 1934 decision of Local Loan Co. v. Hunt, the Supreme Court asserted the following, regarding the discharge of debt through bankruptcy proceedings, “It gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”
As a Redding bankruptcy lawyer, Patricia Johnson understands this and devotes her practice to helping those people who have found themselves in the midst of financial crisis. She will guide you toward the most appropriate path to address your particular situation.
Debt Counseling
Under certain circumstances, this may simply involve debt counseling. Debt counseling is a sound alternative to bankruptcy; however, you must be aware that a counselor can only help if you are willing to help yourself. In 2005, Congress passed legislation referred to as the Bankruptcy Abuse Prevention and Consumer Protection Act, which mandates debt counseling prior to the filing for protection under the Bankruptcy Code. This process allows the counselor to examine a person’s financial situation and make recommendations to the client about ways to pay their debts. In all cases, debt counseling offers a greater opportunity for success when a person first recognizes the potential for financial instability rather than when the debt load is intolerable.
Chapter 7 Bankruptcy
Under the rules of a Chapter 7 bankruptcy, the court, through a trustee, manages a plan to liquidate a person’s non-exempt assets, if there are any, and distribute the proceeds to the unsecured creditors. As a part of the filing, the debtor must provide:
- schedule of all assets (things you have) and all liabilities (debts you owe)
- a schedule of current income and expenditures
- a statement of financial affairs
- a copy of the tax return or transcript for the most recent tax year, and proof of income for the previous six months
Patricia Johnson will provide the appropriate forms and itemized checklists to assist you in assembling the necessary information and avoid unnecessary inquiry by the Trustee after filing. If there appears to be a problem, it will be discussed with you and all options looked at before filing, including legal ways to make non exempt assets exempt.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy puts a stop to creditors starting or continuing collection efforts, while allowing the debtor with a regular income to develop a plan to repay part or all of his/her debts. The repayment plan arranges for the debtor to make installments over a three to five year period. Chapter 13 is useful if you have too many non exempt assets you want to keep, tax collectors are a problem, and/or your home value is less than the first mortgage but you have a second mortgage.
There are several stipulations to filing a Chapter 13 bankruptcy. As a Redding bankruptcy attorney, Patricia Johnson will aid you in determining your eligibility, or guide you in another direction. Now is the time to contact Patricia Johnson.