CHAPTER 7 BANKRUPTCY
An Opportunity for a Fresh Financial Start
What is a Chapter 7 Bankruptcy? A Chapter 7 Bankruptcy is a legal process to help someone who owes money (a debtor) to get relief from many types of debts. A Chapter 7 Bankruptcy refers to the section of the Federal law which governs these types of bankruptcies, also referred to as a consumer bankruptcy.
How can filing for bankruptcy help you? If you have accumulated debts such as personal loans, past due utility bills, credit card charges, and medical bills that you just can't pay back, bankruptcy can help you get out from under those debts and start with a clean slate. Bankruptcy can help you get your finances back in control, and protect you, your family, and your assets.
Are there alternatives to bankruptcy? Yes! In fact, we recommend our clients carefully consider their other options before deciding to file for bankruptcy. Some other options include debt consolidation, credit counseling, or negotiating with the various people and companies you owe money to (the creditors).
While considering your available options, be very cautious about people or businesses who promise to negotiate with creditors on your behalf for a monthly fee. Some of these offers may end up costing you much more than if you simply negotiate with your creditors yourself, or file for bankruptcy.
There are some types of debts and liabilities that cannot be removed through a bankruptcy. Some of these include child support, spousal support, certain types of judgments against you, and most tax debts.
So what do you need to do if you are ready to file for bankruptcy? First, we recommend you find an attorney that has experience with bankruptcy law, and that you can trust. While you can file for bankruptcy on your own, it can be a confusing process. An experienced bankruptcy attorney will help you through the process from start to finish, and make sure your bankruptcy is filed and completed correctly. Making mistakes, even unintentionally, in the bankruptcy process can have some serious consequences.
Once you've spoken with an experienced and trustworthy bankruptcy attorney, you'll need to compile information about your assets, your debts and liabilities, and your income and expenses. These all need to be disclosed to the bankruptcy court. If you do not disclose all your assets, debts, liabilities, and financial circumstances to the bankruptcy court, you may end up with certain debts that cannot be discharged, or even prohibited from filing for bankruptcy for a certain period of time.
Depending on your situation, and what assets you have, the bankruptcy will proceed by having someone evaluate your assets, possibly liquidating them for their cash value and distributing them to certain creditors, and having a creditor meeting.
A successful Chapter 7 bankruptcy results in what is called a "discharge" order. The discharge is an order from the court releasing the debtor from being personally responsible for certain debts. This means that after a bankruptcy discharge, you will no longer be legally required to pay any debts that have been discharged, AND, your creditors for those debts must stop all legal action, telephone calls, letters, and other types of collection contact with you.
Have you been considering filing for bankruptcy? Still have questions?
Asset & Property Division
Divorce - or as it is formally known in California, Dissolution of Marriage - naturally includes property, assets, and liabilities, that must be divided in many cases.
Maybe you've been told that dividing property is complicated, contentious, and takes years. It doesn't have to be! While some cases are more complicated than others, we can help you obtain a fair division of community property, and make sure you don't lose your separate property. We'll also work with you to make sure you aren't stuck with an unfair portion of debt.
What are community and separate property? Community property is property and assets that are considered to be part of the marital estate. Generally that means property that was acquired during the marriage. In California, community property is property that both spouses have an equal right to and ownership of.
Separate property is property and assets that are not considered part of the marital estate; property that belongs exclusively to one spouse or the other. Generally, that means property that was acquired either before the marriage began, or after the spouses separated. Separate property can also include gifts and inheritance received during the marriage, if the gift or inheritance was given to one spouse exclusively.
Sometimes assets can become co-mingled, and it becomes more difficult to determine whether a particular asset is community or separate property. This can be particularly true in the case of businesses owned and operated by spouses, or with real estate purchased with money that came from an inheritance or gift. We understand these can be confusing and overwhelming issues, and we can help.
Debt and liabilities are also considered either community or separate property. If you and your spouse have any outstanding loans, credit card charges, unpaid property taxes, or other debts, these will also have to be divided. In some cases, divorcing spouses reach agreements to give more property and assets to one spouse, and offset the extra property with more debt as well. It is important that debts and liabilities are addressed during divorce, as the creditors might still try to collect from either spouse later on.
Whether you and your spouse want to reach an agreement through mediation, or you need someone to fight for you in court, our experienced staff is ready to help.
Qualified Domestic Relations Orders
In a California divorce proceeding, the court will divide the community estate between the spouses.
One of the largest assets in a marriage can be one, or both, spouse's pension or retirement plans. Certain retirement plans and benefits cannot be divided between spouses without a Qualified Domestic Relations Order (QDRO, pronounced "cue-dro" or "qua-dro"). A QDRO is a special type of court order that divides certain retirement plan benefits in a divorce. It contains specific directions to the retirement plan administrator regarding how the plan should be divided, and what will happen when benefits are issued. These are often overlooked in divorces, and many family law attorneys either don't want to bother with them, or just aren't equipped to handle them.
Generally, each retirement plan is unique and requires for the QDRO to be specifically created for each plan. It is essential that your QDRO is accurate and complete, otherwise the plan administrator will not be able to distribute the funds as specified in the QDRO. If your QDRO fails to cover all of the community retirement assets, you may not be able to receive them at a later date.
You will need a QDRO if you are trying to divide the following types of plans:
- 401(k), 403(b), and 457 plans
- Thrift plans
- profit-sharing plans
- money purchase plans
- employee stock ownership plans
- tax-sheltered annuities, and
- business/corporate defined benefit or pension plans.
Just like other assets, property, and liabilities, divorcing spouses don't have to fight it out in a courtroom for a QDRO. You can come to an agreement about how to divide retirement benefits, and submit your agreement to the court to be turned into a court order. The Law Offices of Sanford Parke is experienced and equipped to help you reach a conclusion to your divorce case, including QDRO.