Sacramento Bankruptcy & Debt Relief Attorney

Bankruptcy means test: what is it?

The means test in bankruptcy is a test to determine whether someone qualifies for bankruptcy. What the means test measures is whether someone can afford to pay their debts. If they can’t, their debts can be discharged, or eliminated, through a bankruptcy filing. If they can pay their debts, or at least a portion of them, the means test tells what they than can pay and what they can’t. Whatever debt can’t be paid can be discharged through bankruptcy.

There are a number of factors that go into the means test including, but not limited to, family income, size and expenses. Since the many variables can make the difference whether someone qualifies for bankruptcy or not, it is best to seek help on this subject.

Remember, bankruptcy consultations are always free!

Bankruptcy: can my employer discriminate against me for filing?

No. An employer cannot discriminate against you for filing bankruptcy. Federal law protects an employee’s right to file bankruptcy without retribution, discrimination or retaliation. You cannot be fired, demoted or put in jeopardy of your job for filing bankruptcy. You are safe!

“Wild card”: what it means for Sacramento bankruptcy filings

“Wild card” is a term used for bankruptcy filings here in Sacramento and California related to protecting (exempting) your property. In addition to exempting all forms of your property, exemption laws used in California allow you an extra allowance of property protection by increasing the amount of property you can protect through a “wild card.” When applicable, the wild card exemption allows over $20,000 of property protection when you file for bankruptcy. Often the wild card is used to protect cash, bank accounts or tax refunds. It is a great tool to protect your property while eliminating your debt through bankruptcy.

Car repossessions and bankruptcy

If your car is repossessed you will likely owe the finance company or bank for the costs connected with repossessing your car. More so, you may owe for the difference between what you owed on the vehicle and the amount for which the car was sold at auction. This gap is referred to as a deficiency.

Both the repossession costs and any potential deficiency are dischargeable through a bankruptcy filing.

If your car is repossessed, bankruptcy can also get your car back. Timing and type of bankruptcy are factors in whether your car can be reclaimed if you file for bankruptcy.

Is there a minimum amount of debt to file bankruptcy?

No. Bankruptcy can eliminate any amount of debt. Whether it is worthwhile to file bankruptcy with the amount of debt you owe is the question. The analysis to determine wether to file bankruptcy should be which of the following options will better you:

1. To have a bankruptcy and no debt; or

2. To have debt and no bankruptcy.

The answer sometimes is not simple. Typically when people lose the ability to afford their debt, bankruptcy and the discharge of their debt is the best bet. Though bankruptcy is a negative on your credit, it is almost always a better option then carrying debt that cannot be paid. By eliminating your debt, your debt-to-income ratio is instantly improved which, understandably, instantly improves your credit.

Part of the equation, too, must be the mental aspect of debt. clearing your debt can offer peace of mind and the prospect of not living under debt. Never underestimate what debt–or its absence–can do to your well-being!

Bankruptcy and credit card debt

Credit card debt is one of the most common types of debt discharged in bankruptcy. It is normally unsecured debt, meaning the debt does not need to repaid after filing for bankruptcy.

Transferring property prior to filing bankruptcy

Before filing bankruptcy do not transfer your property to anyone. Doing so may subject the property to a claim of the trustee. This means that even if you give your property away, the trustee can potentially take the property back and use it to pay your creditors.

Exemptions laws, particularly in California, generally allow you to protect all your property and, in so doing, there is no need to shield your property by giving it to someone else before you file for bankruptcy.

Bankruptcy payment plans

Most clients in Sacramento who need to file bankruptcy cannot afford to pay it in one lump sum. That’s fine. My office has always accepted payments made over time to pay for a bankruptcy.

There are no minimum fees, deadlines, interest or other charges associated with payment plans. Pay as you can, when you can. The bankruptcy cannot be filed until the bankruptcy is paid in full, but you can take as long as you need to pay it off.

Lawsuits, judgments, garnishments & bankruptcy

If you have been sued, have a judgment against you or are subject to a garnishment, bankruptcy can stop them all. Bankruptcy prevents creditors from collecting against you. This means creditors cannot sue and, if they already have, they must dismiss their case against you. If there is a judgment against you it is cancelled by a bankruptcy. And if your wages are being garnished, bankruptcy will block it.

Bankruptcy is a trump card that can cripple your creditors’ collection efforts. Bankruptcy is a powerful tool!

Sacramento bankruptcy filings: Credit card debt

For those filing bankruptcy in Sacramento, credit card debt is commonly one of the biggest forms of debt eliminated through a bankruptcy discharge. If you have credit card debt you are considering eliminating through a bankruptcy, you are not alone!

Bankruptcy and car loans: Can you keep your car if you file for bankruptcy

Yes. If you are making payments on a car loan and file for bankruptcy you can keep your car. You have to keep making your payments and, if you don’t, you can’t keep your car even if you filed bankruptcy.

The terms of your loan (how much you pay, how long you pay, etc.) are not normally changed just because your file bankruptcy. But know your car finance company cannot take your car if you are making your payments just because your file bankruptcy.

Evening and weekend appointments for free bankruptcy consultations

If you need an evening or weekend appointment to meet for a free bankruptcy consultation, that can be arranged. Call me today at (916) 448-6923 to see what your debt relief and bankruptcy options are.

Sacramento bankruptcy court link

In addition to the information provided in my website, it may be helpful for some considering bankruptcy, as well as those in an active bankruptcy, to access the court’s website. Bankruptcy is part of the federal court system which, for Sacramento, is in the Eastern District of California.

Click here for the court’s website.

Bankruptcy and payday loans

Payday loans are the devil! Interest rates for such loans usually exceed 450% and, no, this is not a typo. If the postdated check you wrote for $350 you gave in exchange for the $300 you received is not honored, watch out. It will cost you! Often this results in the need to get another payday loan to cover the last one. Robbing Peter to pay Paul is not the answer.

Bankruptcy can eliminate payday loans. They are normally unsecured debts that can be eliminated in a bankruptcy discharge.

Linked here is an article from the Wall Street Journal illustrating the inequity of payday loans.

Don’t bury your head in the sand: bankruptcy can help you

As is reflected throughout this site, bankruptcy is often a far better option than living with debt. It is better for your credit, financial standing and peace of mind. This CNBC video may help in your decision whether to file for bankruptcy.

Sacramento bankruptcy coverage area

Sacramento bankruptcy filings cover a broad area from the Oregon boarder to Fresno County, from the San Francisco Bay to Lake Tahoe. It’s a big area. Click here for a link to the district map for the Eastern District of California, the court covering Sacramento and the large surrounding area for bankruptcy filings.

All areas of Sacramento county are included within this filing district including, but not limited to, Arden Arcade, Carmichael, North Highlands, Rio Linda, Citrus Heights, Folsom, Orangevale, Rancho Cordova, Elk Grove and Rancho Murieta.

How to find the best bankruptcy lawyer in Sacramento who is right for you

Selecting the best bankruptcy lawyer to overcome your personal debt problems can be complex. Who is the best attorney for you is the question to be asked and answered in the process. Whether you narrow your potential choices through Google, Yahoo, Facebook, Twitter or some other search strategy or referral, whoever you choose must be right for you. And only through personal interaction and communication with a prospective attorney can this be accomplished.

Ask questions, discuss your situation and be comfortable in your choice. The attorney-client connection is a relationship that must be right for you.

Is debt discharged through bankruptcy considered income on taxes?

No. If a debt is forgiven or otherwise cancelled outside the bankruptcy context, that amount can be considered income on your taxes. Often people receive a 1099 (1099-C) for the amount of debt that is cancelled and must pay taxes on that amount.

Here is what a 1099 looks like for cancellation of debt income:

But if you file bankruptcy, the debt is discharged and, according to the IRS, cannot be considered income.

Declaring bankruptcy

Declaring bankruptcy is not always complex or confusing, especially with the aid of an attorney. But the process is a bit more in depth than this "The Office" video makes out!

Sacramento bankruptcy: Chapter 13 filing facts

Chapter 13 bankruptcy,in Sacramento and elsewhere, is a form of filing where you propose to repay at least a portion of your debt. All of your debt, though, need not be repaid. Often only a small percentage of your debt is repaid through a Chapter 13 bankruptcy. The rest is discharged, or eliminated. What you pay and what you don’t are fundamental facts in formulating your Chapter 13 repayment plan. Just understand that even if you file for Chapter 13 bankruptcy, you don’t necessarily have to pay all your debt back. See for yourself.