Frequently Asked Questions
Can I be free of debt by filing for bankruptcy?
A large number of debts are discharged in Chapter 7 bankruptcy. These
include credit card bills, medical bills, overdue utilities, phone bills
and other unsecured debt. Most people who file for bankruptcy are free
from a large percentage of their outstanding debt. Each individual or
couple has a unique circumstance that must be addressed as such. Get your
case evaluated from an Irvine bankruptcy lawyer from Peter Rasla &
Associates, P.L.C. and you can find out specifically what debts would
be discharged in filing Chapter 7.
Will my credit be destroyed for years?
It is an interesting point that a foreclosure can frequently have a worse
effect on credit than filing for bankruptcy. Most people who file are
already in serious trouble with their credit; filing for bankruptcy at
least allows their credit report to show that they no longer owe those
outstanding obligations. If you carefully manage your finances, it is
likely that you will get credit offers within a short period of time,
usually at a high interest rate. If you carefully manage the situation
going forward, you can expect to have your credit improving quickly as
I heard that your credit card debt will be discharged. Is this true?
Chapter 7 bankruptcy, unsecured consumer debt is discharged. Many don't realize
that recent purchases on credit cards WILL NOT be discharged, and they
believe that if they are going to file for bankruptcy, they may as well
use their cards to the max. This is a very bad idea, as those purchases
will not be eligible for discharge, and this is one of the many bankruptcy
myths out there. Get your information from a trusted source on all such
issues, and the firm is here to help.
Why would you file Chapter 13?
In many cases, the individual involved has too high of an income to qualify
for Chapter 7. They can then file
Chapter 13 which allows them a 3 - 5 year period to pay off overdue obligations,
and also allows them to keep their property.
Will I qualify for bankruptcy?
Most people who are under severe financial stress will qualify. We can
evaluate your personal financial situation and tell you within a short
period of time whether you qualify for Chapter 7 or Chapter 13.
What happens at a 341 meeting of creditors?
In short, a 341 meeting of creditors is a meeting where you sit down and
speak with the trustee in your bankruptcy case, as well as any creditors
who may have questions about your case. The meeting usually lasts around
15 minutes. You will be sworn under oath, your bankruptcy documents will
be inspected, and you and your trustee will answer any questions your
I have a steady income. Can I still file?
It is a common misconception that people filing for bankruptcy are out
of a job and have no form of wages. Many filers actually have good jobs,
but have a lot of expenses. The cost of living is incredibly high and
with a poor economy almost everyone can feel the effects in some way.
Since debtors have differing situations, there are also differing types
of bankruptcy. Two common ones are Chapter 7 and Chapter 13.
Chapter 7 is for those with more serious debt that have no way of paying
it. While it can wipe out more debt, it can also come with downsides.
Chapter 13 can allow a debtor to keep most or all of their assets and
simply offers aid for meeting expenses. This can be a great option for
those that have a job but have faced trouble meeting all their costs.
Through this form, debts are lumped together and a payment plan is made.
This is usually around three to five years.
What is the means test and why do I need to take it?
The means test was established by the government as a response to the
number of individuals filing for bankruptcy that did not necessarily need
it. Bankruptcy is an extreme choice and should not be taken lightly. The
means test assesses the income of a person filing and compares it to the
average income in their area. There are other factors involved, but for
the most part a person that has an income above the average will not qualify
to file. This is in regards to being eligible to do so under Chapter 7
and a person that does not pass the means test will still have the option
of filling for another form.
Can co-signers be protected if I file?
When filing for bankruptcy, there is a possibility that your co-signer
can be protected, though only in certain types of bankruptcy. Under Chapter
7, the creditors will likely go after your co-signer regardless of the
bankruptcy file. However, if you choose to file for Chapter 13, they can
be protected under certain circumstances. One important factor to be aware
of in these circumstances is that in the event you fail to meet the Chapter
13 requirement laid out for you by the court, the creditors may still
go after your co-signer.
How to I put a stop to creditor harassment?
Creditor harassment is an overwhelming thing for any person to experience,
especially when they are already feeling the pressures of their debt.
In order to end
creditor harassment (via phone calls, emails, etc.) you will want to discuss your options
with an Irvine bankruptcy attorney to see if bankruptcy or any other option
of debt relief will be best for you.
What if I don't want to file for bankruptcy?
There are alternatives to filing and bankruptcy is not right for every
case. Every client may have different needs and it is important to work
with a professional that can review this and act accordingly. If you are
unsure about bankruptcy you should talk with a professional about the
other alternatives before you are put in the position of having to file.