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The Bankruptcy Reform Act of 2005 requires each filing debtor to complete a pre-bankruptcy class, prior to filing a Chapter 7 bankruptcy. Debtors are also required to take a personal financial management class following the filing of their bankruptcy petition.
A Chapter 7 Bankruptcy begins with the filing of a petition with the Federal Bankruptcy Court in Sacramento, which places an immediate stay of actions on all listed creditors from any further collection activities. Approximately six weeks following the filing, there will be a meeting of creditors which is normally held in the Federal Courthouse in Redding. Upon the conclusion of the meeting of creditors, a discharge of debtor is granted. This takes place normally 60 days following the meeting.
Under Chapter 7 law, debtors are entitled to retain certain assets. The personal possessions in the debtor's home are normally exempt, assuming they are not used as security for a purchase money loan. If the assets owned by the debtor exceed the exemption amounts, the trustee in the case may request a buy-back of any excess equity.
Unsecured obligations such as most credit cards, medical debts and other general bills are normally discharged through Chapter 7. Secured creditors would have to be paid should a debtor wish to retain those assets.
The Bankruptcy Reform Act of 2005 requires each filing debtors to complete a credit counseling class which much be completed a maximum of six months prior to the filing of any bankruptcy. Following the first petition's filing, debtors will be required to take a second personal financial management class.
Chapter 13 Bankruptcy commences with the filing of a petition to the Federal Bankruptcy Court in Sacramento, which places an immediate stay of actions on all listed creditors from any further collection activities. Approximately one month following the filing, there will be a meeting, where debtors meet the trustee in the case, which is normally held in the Federal Courthouse in Redding.
A repayment plan may be confirmed seven days after this meeting unless an objection is filed. Should an objection be filed or if an amendment is necessary, a final confirmation hearing is held in Sacramento before a bankruptcy judge.
Under Chapter 13, unsecured obligations such as most credit cards, medical debts, and other general bills would have to be paid as much as if the debtor had filed for Chapter 7 Bankruptcy. A Chapter 13 repayment plan is based on the monthly disposable income for up to five years. This disposable income amount is based on the IRS guidelines for average living expenses in the county of residence. Any secured loan, which has less than five years remaining, must be made through the Chapter 13 plan. If you own a residence and qualify, we may be able to strip the second mortgage through the Chapter 13 process.