Frequently Asked Questions

• Are the Bankruptcy courts still open?

  Yes. The Bankruptcy Courts are open and all hearings are currently being done over the phone until further notice.

• Can I still file for Bankruptcy?

  Yes. The courts are still allowing bankruptcy cases and motions to be filed like always. Our first files all cases electronically.

• Is my 341 Hearing being postponed?

  All pending 341(a) meetings of creditors (initially scheduled for March 25, 2020 through April 10, 2020) have been continued for a few weeks for telephonic hearings. Newly filed cases will be given an automatic telephonic hearing.

• How do I call into my 341 Hearing?

  You will be sent a Notice by the United States Trustee’s of a call in telephonic number and ID password. They prefer that you use a landline and be in a quiet place.

• Are my Chapter 13 payments suspended?

  Chapter 13 debtors are not relieved of their obligation to continue making plan payments to the Trustee not later than 30 days after the date the petition was filed. If Debtors must miss one or two months payments, the trustee will allow them to catch up later on the missed payments.

  No. Chapter 13 confirmation hearings and hearings on miscellaneous chapter 13 matters will be held as scheduled, and your attorney will appear by telephone.

• Can I keep my economic relief payments?

  The Trustee will not be seeking a turnover of any economic relief payments related to coronavirus (COVID-19).

• What is Chapter 7 Bankruptcy?

  Chapter 7 bankruptcy, sometimes called a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases, the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick “fresh start”.

  One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.

• What is Chapter 13 Bankruptcy?

  Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.

• How difficult will it be to file Chapter 7 under the new bankruptcy laws?

  There has been much doom and gloom written about the bankruptcy means test under the new laws and how much more difficult it’s going to be to file Chapter 7. It’s true that there are more hoops to jump through under the new laws and it’s true that the bankruptcy means test will result in some people having to file chapter 13 instead of Chapter 7.

  However, for the vast majority of filers, Chapter 7 is still available with very little extra effort!

• Will my creditors stop harassing me?

  Yes, they will! By law, all actions against a debtor must cease once the documents are filed. Creditors cannot initiate or continue any lawsuits, wage garnishees, or even telephone calls demanding payments. Secured creditors such as banks holding, for example, a lien on a car, will get the stay lifted if you cannot make payments.

• What are the most common reasons for a Chapter 7 Bankruptcy?

  The most common reasons for filing bankruptcy are:

  1. Job Loss
  Losing a job can easily lead to bankruptcy and while an emergency fund can help. It can also be quickly tapped out if you suddenly have a major expense, such as medical bills.

  In December 2018 the US unemployment rate rose to 3.9 percent from a 49-year low of 3.7 percent in the previous month. It was the highest jobless rate since July 2018, as the number of unemployed persons increased by 276 thousand to 6.3 million. (tradingeconomics.com)

  2. Income Shrinkage
  Not completely losing your job, but having your hours reduced by 25% or moved into a position that pays less, can suddenly make it difficult to make ends meet.

  3. Credit Card Debt
  Out of control credit card debt can be very dangerous, especially if you have a high-interest credit card charging you an APR of 25% to 30%. Once your debt becomes more difficult to pay off, it might be tempting to just make minimum payments. In the end, this will only drag things out and cost you more interest.

  4. Medical Expenses
  Sometimes racking up credit card debt can’t be avoided, especially if you’re suddenly faced with a substantial amount of medical expenses. Emergency medical treatments aren’t optional and the cost of healthcare is generally quite expensive. It’s no surprise that medical expenses are the leading cause of bankruptcy.

  5. Divorce
  A final major cause of filing bankruptcy is divorce. The income that supported two people together successfully might not successfully support two people living separately. There might be a substantial amount of alimony and child support, and if one party is expecting but not receiving support from the other, it can leave that ex-spouse in dire financial straits.

  Those are the top 5 reasons why people file bankruptcy, they aren’t the only ones. Others include student loan debt (which is not easily discharged via bankruptcy), unexpected expenses, spending beyond one’s means, steep utility bills, and the threat of foreclosure.

• When will I be discharged from bankruptcy?

  One of the major purposes of bankruptcy legislation is to afford the opportunity to a person hopelessly burdened with debt to erase his or her debt and thereby get a fresh financial start. A bankrupt’s debt is erased when he or she is discharged.

• What are the key or major events in the bankruptcy process and when will the bankruptcy be over?

  The Steps in a Chapter 7 Bankruptcy

  Day 1: The Bankruptcy documents are filed with the Bankruptcy Court.
  Day 14: Creditors are advised that a petition has been filed.
  Day 20-40: A meeting of creditors is held at the court (341 Meeting).
  Day 20-30 and After: The trustee will sell any non-exempt assets.
  Day 90 (after the 341 Meeting): Unsecured creditors must have filed their claims.
  Day 60-90 (after the 341 Meeting): The debtor is discharged and all debts (with some exceptions) are written off.

• What debts are erased by a bankruptcy?

  Most unsecured debt is erased in a bankruptcy except for:

  • Child support and alimony;
  • Debts for personal injury or death caused by your drunk driving;
  • Student Loans.
  • Income tax debt.

  Note on Private Student Loans: On June 7 2007, US Senator Dick Durbin introduced a Bill to make private student loans dischargeable in bankruptcy, as they were before 2005. The 2005 changes to the U.S. Bankruptcy Code made the treatment of private student loans equivalent to the treatment of government-guaranteed student loans, which were not dischargeable. This bill would reverse the 2005 amendment, so that private student loans again would be fully dischargeable in bankruptcy.

  More Detailed information about debt that might survive bankruptcy

  The following debts are not erased in both Chapter 7 and Chapter 13. If you file for Chapter 7, these will remain when your case is over. If you file for Chapter 13, these debts will have to be paid in full during your plan. If they are not, the balance will remain at the end of your case:

  Debts you forget to list in your bankruptcy papers, unless the creditor learns of your bankruptcy case;

  Child support and alimony; Debts for personal injury or death caused by your intoxicated driving; Student loans from government organizations, unless it would be an undue hardship for you to repay; Fines and penalties imposed for violating the law, such as traffic tickets and criminal restitution, and Recent income tax debts and all other tax debts.

  This is a complicated area of the bankruptcy law and an attorney should be consulted. You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of these five conditions are met:

  1. The IRS has not recorded a tax lien against your property. (If all other conditions are met, the taxes may be discharged, but even after your bankruptcy, the lien remains against all property you own, effectively giving the IRS a way to collect.) You didn’t file a fraudulent return or try to evade paying taxes. The liability is for a tax return (not a Substitute or Return) actually filed at least two years before you file for bankruptcy. The tax return was due at least three years ago.
  2. The taxes were assessed (you received a notice of assessment of federal taxes from the IRS) at least 240 days (eight months) before you file for bankruptcy. (11 U.S.C. § 523(a)(1) and (7).)

  In addition, the following debts may be declared non-dischargeable by a bankruptcy judge in Chapter 7 if the creditor challenges your request to discharge them. These debts may be discharged in Chapter 13. You can include them in your plan, and at the end of your case, the balance is wiped out:

  1. Debts you incurred on the basis of fraud, such as lying on a credit application; Credit purchases of $1,225 or more for luxury goods or services made within 60 days of filing; Loans or cash advances of $1,225 or more taken within 60 days of filing; New Bankruptcy Law taking effect on October 17, 2005: Debts you incurred on the basis of fraud, such as lying on a credit application; Credit purchases of $500 or more for luxury goods or services made within 90 days of filing; Loans or cash advances of $750 or more taken within 70 days of filing;
  2. Debts from willful or malicious injury to another person or another person’s property; Debts from embezzlement, larceny or breach of trust, and
  3. Debts you owe under a divorce decree or settlement unless after bankruptcy you would still not be able to afford to pay them or the benefit you’d receive by the discharge outweighs any detriment to your ex-spouse (who would have to pay them if you discharge them in bankruptcy).
• Can I file bankruptcy without a lawyer?

  The answer is “no”. In 2005 before Congress required more legislation and further regulations; bankruptcy proceedings could be filed without a lawyer if your case was “simple”.

  In the last few years and particularly if you are going to file bankruptcy in San Diego, filing yourself is not possible. There is no legal requirement that you need to be represented by an attorney in bankruptcy court, nor that you have to have an attorney prepare your bankruptcy documents. However, without competent legal advice, you risk more assets than you will save in costs and the risk of loss through error is high.

  Be extremely cautious to use paralegals or other persons to prepare your documents at a “discounted price”. Several of our clients have discovered the hard way and got exactly what they paid for. Remember too, at this time, only attorneys can carry professional liability (MALPRACTICE) insurance that will cover any loss to the client resulting in errors in the attorney’s planning, preparation of documents or conduct at hearings. In our experience, a practicing bankruptcy attorney is much less likely, than a non-professional to make a costly error.

• What is the cost of filing bankruptcy?

  The court fees to file bankruptcy for 2022 in San Diego is either a $338 filing fee for Chapter 7 Bankruptcy or $313 filing fee for Chapter 13 Bankruptcy. These fees are separate from the attorney fee paid to your lawyer to prepare and file your bankruptcy case and to represent you throughout the legal process.

  Lawyer Fees

  Each of our client’s circumstance is unique, and attorney fees are based on the anticipated amount of work that will be required in the complexity of your case. For example, if you own a business and a rental property, your legal matter will clearly be more complex than a person who is a W-2 employee and does not own any real estate. We cannot possibly quote you a lawyer fee without sitting down with you to review your current situation.

  Free Consultation

  We offer a complimentary consultation to go over your situation and will not charge you if we cannot help you. After a careful review of your situation, we will be able to discuss the attorney’s fee for your case filing. There is absolutely no obligation on your part, the purpose of the free consultation is to determine if we can help you.

  Competitive Rates

  Our clients express to us that our fees are very reasonable and competitive among other bankruptcy lawyers in San Diego. They choose our law office because of our dedication and personal attention that we give you in handling your case.

  Our attorneys have a combined 30+ years of experience in filing regular and emergency bankruptcy filings and have filed over 8,000 cases to date. We are able to prepare your Petition and Schedules for the lowest cost possible while still getting the job done correctly every time, without exception.

  Payment Plans

  We do offer payment plans if you’re having difficulty paying the cost of bankruptcy, ask about the variety of affordable payment plans we have to help you pay for the cost of filing bankruptcy.