Bankruptcy is often a last resort for an individual struggling with keeping current on rent payments. This does not mean that bankruptcy is the end of a person’s financial life. Quite the opposite; it is a new beginning. It takes 7 to 10 years for a bankruptcy to be erased from a person’s credit report. In the meantime, it is important to take steps to rebuild credit. The most important thing that a consumer...
Financial hardship is difficult for any individual but for business owners, it can be particularly stressful as the line between personal and business finances may become blurred. You may have racked up a lot of personal credit card debt and may be considering filing for personal bankruptcy, but you are concerned about how bankruptcy will affect your small business. Or, your business could be struggling and you may wonder how a business bankruptcy will...
By: William E. Winfield, Esq. Today, individuals who are seeking relief under Chapter 7 or Chapter 13 of the Bankruptcy Code are required to complete credit counseling with an agency approved by the U.S. Trustee’s office. The purpose of pre-bankruptcy credit counseling is to determine if the debtor qualifies for bankruptcy or whether an informal payment plan is a better option. In any event, credit counseling is necessary even if a payment plan is not feasible....
By: William Winfield, Esq. It might sound counter-intuitive, but filing for personal bankruptcy is expensive. Besides paying attorney fees, a debtor must also pay the court costs associated with filing the bankruptcy petition and accompanying documents. Then there are the expenses associated with attending the mandatory pre- and post-filing consumer credit courses. So when presented with the opportunity to save a few bucks by hiring a bankruptcy petition preparer (BPP) to draft your bankruptcy...
It seems like a perfect plan. If a consumer is about to declare bankruptcy to discharge all or most of his or her debts, why wouldn’t that consumer try to increase his or her credit card debt as much as possible to maximize the benefit granted by bankruptcy protection? The answer is simple. It won’t work. Generally speaking, credit card debts are dischargeable in bankruptcy. However, a bankruptcy trustee examines a consumers spending in...
By William Winfield, Esq. 1. Bankruptcy Fraud: It cannot be overstated how important it is to tell the truth and accurately disclose all income assets, debts, and other required information when preparing a Bankruptcy Petition. If a Court finds that a Petitioner committed a willful fraud, the Petition will likely be dismissed. In California, the Court may also impose criminal penalties including fines and incarceration. 2. Failing the Means Test: In order to be granted...
By: William Winfield, Esq. Bankruptcy is designed to protect individuals, small businesses, and corporations from being overwhelmed by debt. The process involves reorganization and restructuring of debt so that a significant portion of it is discharged or “forgiven”, and the remainder is repaid at a lower rate. Bankruptcy is designed to enable an individual or company to continue to function and prevent ongoing harassment from creditors. The two basic types of bankruptcy are liquidation and...
By: William Winfield, Esq. When a person files for bankruptcy protection, his or her assets must be collected by the bankruptcy trustee and liquidated to reimburse debtors before the petitioner’s debts can be discharged. In order to keep bankruptcy petitioners from falling below the poverty line, there are certain assets that can be retained as exempt. This is not an exhaustive list, but covers the most commonly used federal bankruptcy exemptions. 1. Homestead exemption: If a...
If an individual filing for Chapter 7 bankruptcy owns an automobile, that vehicle may become the property of the bankruptcy estate used for the purpose of making creditors whole. If the car has a lean on it from the lending institution, the loan must be reaffirmed or redeemed, or the vehicle must be surrendered. If the loan is reaffirmed, the individual who took out the loan must sign a contract agreeing to continue...
By William E. Winfield, Esq. When Disfavored Businesses Go To Pot Marijuana dispensaries are legal businesses under California law, but the distribution of marijuana is a Federal offense. As a result a Marijuana distribution business is not eligible for Federal Bankruptcy Relief. This issue came up in Colorado recently where Frank Arenas operates a marijuana wholesale business. Mr. Arenas and his wife sought personal bankruptcy relief under Chapter 7 but the case was dismissed...
