My California Bankruptcy Blog

Welcome to California Bankruptcy Central, my California bankruptcy blog. Wait,don't go if you live in another state! It doesn't matter where you live--bankruptcy is a federal affair and there are few differences (exemptions and median income amounts among them) between states.

I am not a lawyer but I did need to hire one. If you are looking for tips on selecting the right bankruptcy attorney, please visit Bankruptcy Attorney Tips.

I am a bankruptcy filer and have been where you are now. I filed a Chapter 7 bankruptcy in the Central district of California and was successfully discharged. I learned a lot of things the hard way and this blog is about sharing them with you. Nothing here is intended to be legal advice. Please consult with an attorney for your legal needs.

Two things you need to know:

A. Much of what you read about bankruptcy on the internet is not true. Have you ever wondered why a google search sometimes returns the most insane results that are not what you want and sometimes you cannot even understand what the heck you are reading?

It's because many of the authors on the web don't know what they are talking about. They don't write well and often they don't even live in the United States!

All I'm trying to say is be careful of believing anything you read on the internet. I encourage you to also verify anything I have to say by consulting with an attorney.

B. The "New" bankruptcy is not "New" anymore. The bankruptcy laws were changed in 2005 so can we please stop calling them new? The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made it more difficult for consumers to file a chapter 7 bankruptcy but not impossible. Not even all that hard for most.

Prior to 2005, debtors of all incomes could file for bankruptcy under Chapter 7. Under the current laws, a debtor's income is calculated and compared to the median income of their state. If the debtor's income is above the median income amount of the debtor's state, the debtor is subject to a "means test."

If the debtor does not pass the "means" test, they have to file a Chapter 13 bankruptcy, instead of a 7, which means that they will have to repay some of their debt.

Many, many people still qualify for a Chapter 7 and I will have more about the means test in another post.

Again I urge you to check out what I learned about selecting a bankruptcy attorney if you are in the market for one:check out my Bankruptcy Attorney Tips.

Good luck to all,

ep

What Is Reaffirmation?

What is reaffirmation? You may be interested to know that a reaffirmation agreement in bankruptcy may allow you to keep your car or house.

A reaffirmation agreement is an agreement between you and your creditor to keep your loan and your property, despite the fact that you are filing bankruptcy. You do need to continue to make the payments on time, and reaffirmed debts will continue after your bankruptcy is discharged until the loan is paid off.

This can be advantageous when filing a chapter 7 bankruptcy in which you wish to keep your car or home. While a chapter 7 bankruptcy can relieve you of the debt that you have, without a reaffirmation agreement, secured property will be repossessed or foreclosed on.

Reaffirmation is voluntary for the lender though they almost always agree if you are current on your loan payments, because they would rather get their money than not.

You may have other options to keep your property or it may not be a good idea to try and keep it. So much depends on your own unique circumstances and that's why it's so important to consult a good bankruptcy attorney. See my tips for choosing the best attorney.

I hope I've answered the question: What is reaffirmation?!!!

Good luck with your fresh start!

Bankruptcy And Spouse Liability

Bankruptcy And Spouse Liability

Are you thinking of filing bankruptcy by yourself and want to know how the bankruptcy will affect your spouse? Or do you you want to know how your spouse's bankruptcy will affect you? A few things you should know about bankruptcy and spouse liability...

Can one spouse file bankruptcy? Yes. You are entitled to file bankruptcy individually but it can have varied effects on your spouse, depending on your circumstances.

You will be protected by the automatic stay in bankruptcy when you file, but your spouse will not be. If you and your spouse have no joint debts, then your spouse will not be liable for any debts that are yours alone and included in the bankruptcy.

However, if you have jointly co-signed on loans, then your spouse is still responsible for the debt, even if a discharge is granted to you. A creditor could come after your spouse for debts that you include in your bankruptcy. The exception to this would be if you filed a chapter 13 bankruptcy, in which 100 percent of the debt is to be paid back over time. Only then will your spouse be protected.

Credit reporting agencies may report the bankruptcy on your spouse's credit report, if your spouse has co-signed on any of the loans.

If you own property with your spouse and you live in a community property state (California is a community property state), it is possible that the property could be sold and the funds used to pay off creditors.

Your bankruptcy can affect future credit worthiness for any transactions that you and your spouse attempt jointly.

Of course, it can be more complicated than this depending on variables unique to your circumstance. That is why it is so important to discuss filing bankruptcy without your spouse with a bankruptcy attorney, which I am not.

Wishing you all a fresh start,

ep