Practice Areas and Legal Definitions

Every year, more than a million Americans file for protection under federal bankruptcy laws. Although some bankruptcy claimants are deemed as credit abusers and/or considered financially irresponsible, many hardworking individuals and businesses can succumb to financial difficulty, and face irreparable economic crisis. Bankruptcy is designed as a legal option to help resolve such a crisis, and act as a financial life preserver for those drowning in debt. To discuss your bankruptcy options, or other areas of recourse that might be available to you, contact a qualified bankruptcy attorney who can advise you of your legal rights as stated under Bankruptcy Law and federal Bankruptcy courts.

New Bankruptcy Laws:
Bankruptcy is a federal court process designed to help individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as liquidation or reorganization. Under a liquidation bankruptcy (Chapter 7), a claimant files to eliminate debt through the bankruptcy court. Under a reorganization bankruptcy (Chapter 13), a claimant files a plan with the bankruptcy court proposing how to repay creditors.

As of October 17, 2005, the requirements under which a debtor may file Chapter 7 bankruptcy changed with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act.  Debtors are now required to seek budget and credit counseling within six months of filing, financial “testing” is required to determine the debtor’s capacity for debt repayment, Chapter 7 cannot be filed if the household income is greater than the median household income as deemed by the state, and state exemptions cannot be applied unless the debtor has resided at current residence for over two years.

Due to the imposed requirements for Chapter 7 bankruptcy as set forth by the new laws, debtors who were eligible to file under Chapter 7 will now have to file under Chapter 13 bankruptcy instead, in which individuals and creditors agree to a court-imposed plan that requires some or all debts be repaid over five years, with an appointed trustee assigned to monitor the repayment process. Bankruptcy filings will continue to be recorded on an individual’s credit report for seven years in the case of Chapter 13, and up to ten years for Chapter 7.

Chapter 7:
Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases, and may be filed by an individual, corporation, or a partnership. A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in Chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property; but a trustee will liquidate the debtor's remaining assets. Accordingly, potential debtors should realize that the filing of a petition under Chapter 7 may result in the loss of property.

Chapter 13:
A Chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. Chapter 13 permits individuals to keep their property by repaying creditors out of their future income.  It is not available to corporations or partnerships. After completion of payments under the plan, Chapter 13 debtors receive a discharge of most debts.

Foreclosure:
Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner's failure to comply with an agreement between the lender and borrower called a "mortgage" or "deed of trust". Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or lien".

A Foreclosure by Sale ends in the posting of a sign advertising the auction of your home on the sale date. The only ways to stop a foreclosure are full payment of the arrearage, or the filing of a Chapter 13 bankruptcy. Full Payment: If you are able to obtain and tender the full amount of your arrearage, including fees and costs, you can stop the foreclosure of a standard residential mortgage. Most people lack the money to make full payment. This process stops the foreclosure and allows you to repay your arrearage over a three-to-five year period. The arrearage is paid through a court-appointed official, while you resume your regular monthly payments to the bank in order to keep your home. A Chapter 13 can be filed at any time prior to the law day or sale date, and it is often the only avenue to save your home.

Debt Consolidation:
Contrary to popular belief, debt consolidation is not a loan. Debt consolidation is a process in which debt is restructured into one low monthly payment. It further enables a consumer to reduce the amount owed and thereby eliminate interest. Very often a consumer can detect warning signs of being in too much debt long before any collection notices are received. If more than two of the following signs apply to you, you are probably in too much debt:

• You have begun charging to your credit card essential expenses like food and daily expenditures
• You are making only the minimum payments on your credit cards each month
• You are near the limit of your credit cards
• You have too many credit cards
• You are unsure how much money you owe creditors

If you or someone you know needs the assistance of an experienced Orange County and Southern California bankruptcy attorney, contact the Law Offices of Gary Leibowitz today at 866-735-4993, or use the contact form provided on this site to schedule for your free consultation.

Professional Profile

The Law Offices of Gary Leibowitz combines experience and tenacity with dedication and compassion. The Firm's bankruptcy lawyers maintain close communication with all clients by being readily available in person, by telephone, by fax, and by e-mail. Moreover, their ability to perform a large portion of their services without requiring clients to physically travel to their office allows them to keep their overhead down and their rates extremely reasonable.

FIRM ADDRESS:
Law Offices of Gary Leibowitz
4012 Katella Avenue, Suite 104
Los Alamitos, CA 90720
Phone: 866-735-4993
Hours: M-F, 8:00AM-5:00PM

MEMBERS OF THE FIRM:

Gary Leibowitz

Gary Leibowitz is a nationally recognized leader in aspects of creditor and debtor bankruptcy law. From 1980 to 1999 he was a managing senior partner of the Law Offices of Leibowitz and Constantino, APC. As counsel at Leibowitz and Constantino, he routinely obtained judicial decisions that affected corporate policy and had an impact on a national basis. His Firm handled anywhere from 10,000 to 20,000 new cases per month including creditor representation, debtor representation, and personal injury. In 2000, Mr. Leibowitz decided to take a more personal approach to the practice of law set up his own small practice in order to devote his time to giving his clients the personal attention they deserved. He has 25 years of experience litigating cases. He has also served as Judge Pro Tem in what is now known as the Superior Court of California, County of Orange, Harbor Division.

EDUCATION:

• Western State College of Law, Fullerton, California, J.D.
• Queens College, City University of New York, B.A.

COURTS ADMITTED:

• California, 1980

PROFESSIONAL MEMBERSHIPS:

• Orange County Bar Association

PRACTICE AREAS:

• Bankruptcy
• Debtors' Rights
• Creditors' Rights

Susan Jensen

Susan Jensen joined The Law Offices of Gary Leibowitz in 2002. She received her B.A. from the University of California at San Diego and her J.D. from UCLA School of Law. During law school she completed an externship with the Honorable Vincent P. Zurzolo, United States Bankruptcy Judge. Ms. Jensen was admitted to the California Bar in 2001. She has worked on more than 100 personal bankruptcies and numerous bankruptcy litigation and personal injury matters. She has also participated in the Orange County Bar Association's Chapter 7 pro bono program.

EDUCATION:

• University of California at Los Angeles School of Law, J.D.
• University of California at San Diego, B.A.

COURTS ADMITTED:

• California, 2001

PROFESSIONAL MEMBERSHIPS:

• Orange County Bar Association, Chapter 7 Pro Bono Program

PRACTICE AREAS:

• Bankruptcy
• Debtors' Rights
• Creditors' Rights