Bankruptcy word represented by wooden letter tiles

Bankruptcy FAQs

The Orantes Law Firm Jan. 24, 2023

Few things in life are more stressful than financial problems. If you’ve found yourself overwhelmed by debt, filing for bankruptcy could help you secure the relief you need. 

At The Orantes Law Firm, we offer knowledgeable and personalized advice to clients navigating the bankruptcy process. Our attorney is prepared to be your guide as you work to resolve your debts and pursue financial freedom. Contact us today to schedule a free consultation. With offices in Los Angeles County and Orange County, we’re able to serve clients in Los Angeles, Irvine, and across Southern California. 

Below, we’ve answered some of the most common questions clients ask us about bankruptcy. 

How do the chapters of bankruptcy differ? 

Each chapter of bankruptcy is intended for a specific situation.  

  • Chapter 7 bankruptcy is typically used by individuals who have large amounts of debt and are unable to make regular repayments toward them. It allows them to liquidate, or sell, certain assets and use the funds to pay off their debts. 

  • Chapter 11 bankruptcy is mainly used by businesses that are struggling with debt but wish to continue operating. Sometimes called “reorganization bankruptcy,” it lets businesses restructure their finances in order to pay back their creditors. 

  • Chapter 13 bankruptcy is an option available only to individuals who have regular incomes and whose debt amounts fall within a specific range. This form of bankruptcy allows a person to keep their assets by setting up a repayment plan (ranging from three to five years) with their creditors. 

  • Chapter 12 bankruptcy is designed specifically for family farmers and fishermen. It is similar to Chapter 13 bankruptcy in the sense that it allows debtors to establish repayment plans with their creditors, but its rules factor in the economic realities associated with farming and fishing as a means of livelihood. 

  • Chapter 15 bankruptcy is meant for individuals looking to navigate bankruptcy proceedings in a foreign country. 

Our bankruptcy attorney can help you determine which chapter of bankruptcy best suits your situation and walk you through the necessary steps of pursuing debt relief. 

Can I keep my house and car? 

Yes. California’s bankruptcy laws allow debtors to keep the property they need to live and work. Even if you need to sell assets through Chapter 7 bankruptcy, your primary home and one primary vehicle will be considered exempt from liquidation. Any luxuries such as second homes, vacation homes, and secondary vehicles will likely be considered non-exempt, and you may have to sell them in order to pay off your debts. 

How long will a bankruptcy appear on my credit report? 

This answer depends on which type of bankruptcy you filed, but the longest it will remain on your credit report is 10 years. A Chapter 7 bankruptcy will appear on your credit report for 10 years, but a Chapter 13 bankruptcy will only appear for seven years. As you wait for a bankruptcy to be removed from your credit report, you can attempt to improve your score by doing things like paying your monthly bills on time and repaying any remaining debts as quickly as possible. 

Can filing for bankruptcy stop a foreclosure? 

Yes. When you file for bankruptcy, the court will issue an automatic stay, which requires debt collectors to stop their efforts. An automatic stay also means that your mortgage lender must stop all foreclosure activities. 

Can I file for bankruptcy more than once? 

Yes. Bankruptcy laws do not place limits on how many times a person or business can file for bankruptcy. However, they do require specific waiting periods between filings. The amount of time you must wait between bankruptcy filings depends on which chapter you filed for previously and which chapter you plan to file. Your bankruptcy attorney can help you determine whether you are yet again eligible. 

Do I need a bankruptcy attorney? 

While having an attorney is not required to file for bankruptcy, it is strongly recommended. The bankruptcy process can be overwhelming and time-consuming, and the legal jargon involved can make things even more confusing. Work with an experienced bankruptcy attorney to help you better understand your options and work through the process in a more efficient manner. By hiring an attorney, you can make sure you are doing things correctly and avoiding potential consequences down the line. 

If you’re looking to file for bankruptcy in California, contact us at The Orantes Law Firm for strategic and dedicated representation. Our attorney will work tirelessly to help you put your debts behind you and help you seek the fresh start you deserve. Schedule a free consultation with us today to learn more about your options. We have offices in Los Angeles County and Orange County, and we proudly serve clients throughout Southern California.