Practice Areas and Legal Definitions

Every year, more than 1,000,000 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,if within California, then the exemptions that would be applied will be that of your previous state of residence.

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 debt consolidation legal counsel or the assistance of an experienced San Diego, California bankruptcy attorney, contact Attorney Evelyn Johnson today at 866-736-1844, or use the contact form provided on this site to arrange for your free initial consultation.

Frequently Asked Questions

The following information includes frequently asked bankruptcy questions. The answers stated are general in nature and are not intended to apply to every situation. Each case is different and carries its own set of circumstances which must be taken into consideration by competent legal counsel.  For more specific information concerning your bankruptcy case, please contact Evelyn Johnson today at 866-736-1844.

Do I have to go to court?
You must attend a first meeting of creditors. This meeting is held in a hearing room used by the bankruptcy trustees, not in court. The trustee will ask you questions regarding your bankruptcy filing. If any of your creditors are present, they can also ask you questions. However, creditors rarely attend this hearing, and if they do, they rarely ask questions. Your attendance at this hearing is mandatory, and failure to appear can result in dismissal of your case.

Will I lose my house, car and other personal property?
Not necessarily, each state has laws that determine which items or property are exempt from being taken away. For example, many states exempt personal items such as furniture and clothing. In addition, other kinds of property are exempt up to a limit. These exemption limits mean that any equity that you have in the property above the limit is not exempt. The Bankruptcy Court can take the property and sell it, pay off any creditors, give to you the exemption amount and keep the rest for other creditors.

Will filing bankruptcy affect my credit rating?
Unfortunately it will. However, most individuals are able to rebuild their credit within a few years. If you are currently contemplating bankruptcy, then it is likely that your current credit rating has already been affected. A discharge of your current debt may provide the opportunity to rebuild your credit with steady, regular payments on a new account.

Can I file for bankruptcy every few years?
No. Once a discharge is granted, a debtor who filed under chapter 7 or 11 is prohibited from filing for another 6 years.

What are exemptions?
11 U.S.C. §522(b) allows an individual debtor to exempt real, personal or intangible property from the property of the estate. State law protects exempt assets from distribution to your creditors. Typically, exempt assets include vehicles up to a certain dollar amount, the equity in your home up to a certain amount, and tools of the trade. Exemptions are claimed on Schedule C. As with all schedules, it is important to fully complete and provide all the information requested. If no one objects to the exemptions you have listed within the time frame specified by the bankruptcy court, these assets will not be a part of your bankruptcy estate and will not be used to pay creditors through your bankruptcy case. Deciding which assets are exempt and how and if you can protect these assets from your creditors can be one of the more important and difficult aspects of your bankruptcy case.

What is a Plan of Reorganization?
The Plan of Reorganization is a document that sets out how a debtor-in-possession will repay creditors. The plan divides creditors into classes. It specifies the treatment of claims for each class of creditor and provides a means for the plan`s implementation. The debtor-in-possession has the exclusive right to file a plan for up to 120 days after the filing of the petition. After this exclusivity period has expired, creditors may file a plan.

What can I do if a creditor keeps trying to collect money after I have filed for bankruptcy?
If a creditor continues to attempt to collect a debt after the bankruptcy is filed in violation of the automatic stay, you should immediately notify the creditor in writing that you have filed bankruptcy. In addition, you should provide them with either the case name, number and filing date, or a copy of the petition that shows it was filed. If the creditor still continues to try to collect, the debtor may be entitled to take legal action against the creditor to obtain a specific order from the court prohibiting the creditor from taking further collection action. Further, if the creditor is willfully violating the automatic stay, the court can hold the creditor in contempt of court and punish the creditor by fine or incarceration. Any legal action brought against the creditor will be complex and will normally require representation by a qualified bankruptcy attorney.

Professional Profile

Evelyn Johnson offers affordable debt relief solutions to clients throughout Southern California through her offices conveniently located in San Diego and Imperial County. Attorney Johnson is an experienced consumer advocate, dedicated to helping her clients stop harassing phone calls, foreclosures and wage garnishments, while working to protect and preserve assets.

If you or someone you know within San Diego and Imperial Counties needs debt consolidation legal counsel or the assistance of an experienced bankruptcy lawyer, contact Evelyn Johnson today at 866-736-1844, or use the contact form provided on this site to schedule your free consultation.

FIRM ADDRESS:
Evelyn Johnson, Attorney at Law
550 West "C" Street, Suite 1670
San Diego, CA 92101
Phone: 866-736-1844
Hours: M-F, 8:00AM-5:00PM
After hours appointments available

MEMBERS OF THE FIRM:
Evelyn Johnson

EDUCATION:

• Thomas Jefferson School of Law, J.D.
• Rutgers University, B.A.

COURTS ADMITTED:

• California, 1994

PROFESSIONAL MEMBERSHIPS:

• San Diego County Bar Association
• California Bar
• National Association of Consumer Bankruptcy Attorneys (NACBA)
• San Diego Bankruptcy Forum
• Women's Insolvency Network
• American Bankruptcy Association

PRACTICE AREAS:

• Personal and Business Chapter 7 Bankruptcy
• Debt Consolidation: Chapter 13 Bankruptcy