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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 - $187 (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

      Family Size         Monthly
            4              6,664
            6              7,814
            7              8,389

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 cards.

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 $200 for each parcel of real property owned plus $50 for each vehicle.  Add $200 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.

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 is normally $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.

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