What Questions Do You Ask To Determine If Bankruptcy Is The Right Step For A Client?
When determining whether bankruptcy is the right decision for a client, one of the first questions I ask is what their income is versus their expenses. If they are making too much money and are current on all payments, the court will question why a bankruptcy is necessary. The second important question I ask my clients is how much of their assets they own, to determine what we are going to be able to exempt.
For most people, their biggest asset is their home. If there is too much equity in the home, it doesn’t make them ineligible to file for bankruptcy. However, whether they can keep their home will depend on whether they can use an exemption to protect it. If there is an issue with exempting their home, I will see if Chapter 13 bankruptcy is viable.
If someone wants to pursue Chapter 13 bankruptcy, it will be important to ensure they have enough disposable income to afford their secured payments (e.g. mortgage payments) and Chapter 13 plan payments. If a client doesn’t have enough income to cover the payments in this bankruptcy plan and doesn’t have access to contributors who can provide financial assistance, then filing for Chapter 13 bankruptcy won’t be worth it; the case will only get dismissed down the line when the client fails to make the required payments.
What Should I Do (Or Not Do) Prior To Filing For Bankruptcy?
Prior to filing for bankruptcy, it is important to gather information regarding all debts that will be included in the bankruptcy. All debts must be listed, and all creditors must be put on notice of the bankruptcy in order for debts to be discharged. Anyone who is married should talk to their spouse about the bankruptcy, even if their spouse isn’t filing with them. This is because the spouse’s information might be requested and some of the assets they own might be affected.
Additionally, assets should not be transferred to family members or hidden prior to filing, as this could result in a charge of fraud. The court will look into any transfers that were made in the years leading up to the bankruptcy. At all times before and during the bankruptcy process, people should be honest; this is the only way their attorney can really help them and ensure the best outcome possible.
What Types Of Debt Cannot Be Discharged In A Bankruptcy?
Most Federal and state taxes, child support and alimony payments, most student loans, court fines and criminal restitution, and debts associated with DUI-related accidents which caused personal injury to another person, are not dischargeable through bankruptcy.
For more information on Filing Bankruptcy In The State Of California, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (818) 697-9699 today.
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