||Chapter 7 Bankruptcy results in a discharge of all of your dischargeable debts, ie., you are no longer
responsible to pay them. It is appropriate for debtors (1) who are insolvent and unable to
pay their bills in a timely manner, (2) who have not filed a Chapter 7 bankruptcy in the
prior eight years, (3) who do not have a lot of non-exempt assets they wish to protect,
and (4) who do not earn the median income* in this state or, if they do, they do not have
a spare $100 - $167 (depending on total amount of debt) left over at the end of the
month's reasonably necessary living expenses to fund a Chapter 13 Plan.
*Median Incomes in the Southern District of California
Chapter 13 Bankruptcy is a form of debt consolidation where
you pay the bankruptcy trustee every month for five years and he pays your creditors some
percentage of what you owe them. There is usually no interest paid and the balance owed at
the end of the term of the plan is discharged. It is appropriate for debtors who have non-exempt assets they wish to keep, or exempt assets for
which the payments are in arrears, or who earn at least the median income in this
state. Another benefit of Chapter 13 is the opportunity for paying considerably less
than what you currently owe for a vehicle you have owned for at least 2-1/2 years by using
the "cram down" concept wherein you have to pay 100% of the current fair market
value of the vehicle, but the rest of what you owe is unsecured debt ... like your credit
Our fee for preparing the Chapter 7 petition and all the schedules that go along with
it, including attorney representation at the creditors'
meeting, is $995 plus $50 per secured creditor (secured creditors
are those with liens on property, like mortgages and auto lenders).
Add $100 if you are married (whether your spouse is filing with you or
not) or if you are self-employed. Add $200 if you are over the median income
shown above. There is also a filing fee at the Bankruptcy Court of $299,
unless your income is less than 150% of the "poverty level"
and you are unable to pay it.
While all of these fees must be paid prior to filing the Petition, a down payment of
whatever is comfortable for you is all that is needed to get started. You don't need to
bring any paperwork or information to the initial consultation (usually with the attorney
who will be representing you). You will receive a questionnaire where you will tell us all
about your income, expenses, assets, etc.; and once you are a client, we will take
the phone calls from your creditors and confirm that you have retained an attorney to
handle your bankruptcy. We will also download a credit report for you.
For Chapter 13, your pre-petition payment to Due Process may vary
from $726 to $1,650, but the filing
fee is $274, and the trustee will pay your attorney additional fees out of the plan
payments he receives. (This is due to the additional work required to develop an
acceptable Chapter 13 Plan and have it confirmed by the Court, not to mention the fact
that your attorney remains attorney of record for the duration of your Plan.)
Unfortunately, we cannot accept your credit card to begin your
bankruptcy because it could be looked upon as a form of fraud wherein you
"borrowed" the funds with no intention of repaying. We can, however, accept
check/debit cards and/or credit cards from family or friends.