Practice Areas and Legal Definitions

Bankruptcy:
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 (Chapters 13), a claimant files a plan with the bankruptcy court proposing how to repay creditors.  

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 irreperable 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:
As of October 17, 2005, the requirements in which a debtor may file Chapter 7 bankruptcy changed under the Bankruptcy Abuse Prevention and Consumer Protection Act.  Debtors are now required to seek budget and credit counseling six months prior to 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.

Chapter13:
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.

Bankruptcy Fraud:
Bankruptcy fraud is a business crime of filing for bankruptcy with criminal intent, that is with the intention of evading payment for goods even though the buyer has funds that could be used to pay for them, or accepting payment for goods or services but not supplying them. Common types of bankruptcy fraud include petition mills, false oath, concealment of assets, and fraudulent conveyance. Multiple filings are not per se fraudulent; as with all things in the law, it depends on the circumstances. Bankruptcy fraud should be distinguished from strategic bankruptcy, which is not a criminal act (but may prejudice a judge against the filer if there is evidence that bankruptcy is being used strategically).

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 Southern California bankruptcy attorney, call the Wadhwani Law Firm today at 866-729-8033, or use the contact form provided on this site to schedule 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 a personal consultation regarding your specific case, please contact Attorney Raj Wadhwani today at 866-729-8033.

What is bankruptcy?
Bankruptcy is the legal method for a debtor to discharge or relieve debt. Bankruptcy is a way for people or a business that owe more money than they can pay to either work out a plan to repay the money over time or to have their debt wiped out. While no debtor is guaranteed a total discharge, most debtors who file for bankruptcy are given such relief.

One of the primary purposes of the Bankruptcy Act is to relieve the honest debtor from the weight of oppressive indebtedness and to provide the debtor with a fresh start. Title 11 of the United States Code regulates the filing of a bankruptcy. If the debtor initiates the bankruptcy it is called a voluntary bankruptcy. If the creditor initiates the bankruptcy it is called an involuntary bankruptcy. In an involuntary bankruptcy the debtor has the opportunity to contest the petition. While the debtor is either working out a plan or the trustee is gathering the available assets to sell, the Bankruptcy Code provides that creditors must stop all collection efforts against the debtor. The Bankruptcy Code regulates what chapter you must file under, what bills can be eliminated, how long payments may be extended, what possessions you may keep, and all other details concerning the bankruptcy.

What is a priority debt?
A priority debt is a debt entitled to priority in payment in a bankruptcy case. A general listing of priority debts is given in 11 U.S.C.  §507 of the Bankruptcy Code. Examples of priority debts are some taxes, wage claims of employees and debts related to goods and services provided to a debtor`s estate during the pendency of a bankruptcy case. In addition, alimony, maintenance or support of a spouse, former spouse, or child is considered a priority debt.

Will bankruptcy stop a lawsuit against me?
A bankruptcy filing will stop a lawsuit immediately and prevent your creditors from placing a lien against your house or garnishing your wages.

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.

How do the new changes in Bankruptcy Laws affect consumers?
The Bankruptcy Abuse Prevention & Consumer Protection Act of 2005, in effect since Oct. 17, 2005, requires debtors to pass more stringent guidelines to determine whether they can have their debts liquidated through Chapter 7 or whether they must enter a repayment plan through Chapter 13. Below is a description of each category. Because the new law makes it more difficult for consumers to file bankruptcy, consumers should consult with bankruptcy attorneys in their area to make sure they file the necessary forms to discharge debt.

• A strict financial means test that will prohibit many debtors from filing a liquidation bankruptcy under Chapter 7
• A requirement that all debtors must receive a briefing from an approved credit counseling agency at least six months before they can file their bankruptcy case
• A requirement that debtors take an approved class on debt management techniques before they receive their bankruptcy discharge
• A provision making it easier for a court to dismiss a bankruptcy case outright or to convert a Chapter 7 case to a Chapter 13 case
• A provision permitting a court to impose sanctions on attorneys, or even on debtors, for filing a Chapter 7 case that is dismissed or converted to a Chapter 13 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.

I`ve filed for bankruptcy, now what?
As soon as your case is officially filed with the court you are granted an automatic stay. Creditors are legally prevented from attempting to collect on any debt owed to them by you. This means that creditors must stop all collection activity, including telephone calls, harassing letters, repossessions, foreclosures, lawsuits, and wage garnishments. Although the stay is automatic, creditors need to be advised of the stay. The court issues a notice to all creditors advising them of the filing of the bankruptcy. The creditors are informed of the following: the case number, the automatic stay, the date set for the creditor meeting, the deadlines for filing objections to the discharge of the debtor and the deadlines for filing objections to the discharge of specific debts. The exact information that is required in the notice differs depending on the chapter under which the case is filed.

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

The Wadhwani Law Firm is a full-service bankruptcy firm committed to providing top-notch debt-relief services at reasonable fees. If you or someone you know needs the assistance of an experienced Southern California bankruptcy lawyer, call Attorney Raj Wadhwani today at 866-729-8033 or use the contact form provided on this site to schedule for your free initial consultation.

FIRM ADDRESSES:
Raj Wadhwani
15233 Ventura Blvd., Suite 1120
Sherman Oaks, CA 91403

Long Beach Office
(Serving Los Angeles & Orange Counties)
3780 Kilroy Airport Way, Suite 200
Long Beach, CA 90806

Montclair Office
(Serving San Gabriel, San Bernardino and Riverside Counties)
4959 Palo Verde St. #103A
Montclair, CA 91763

Phone: 866-729-8033
Hours: M-F, 8:00AM-5:00PM

MEMBERS OF THE FIRM:

• Raj T. Wadhwani

EDUCATION:

• Southwestern University School of Law, J.D., 1997
• California State University, Northridge, B.A., 1993

COURTS ADMITTED:

• State of California, 1997
• U.S. District Court, Central District of California
• U.S. District Court, Eastern District of California
• U.S. District Court, Northern District of California
• U.S. District Court, Southern District of California

PROFESSIONAL MEMBERSHIPS:

• NACBA (National Association of Consumer Bankruptcy Attorneys)
• San Fernando Valley Bar Association
• Central District Consumer Bankruptcy Attorneys Association

Foreign Languages Spoken:

• Hindi/Sindhi

PRACTICE AREAS:

• Bankruptcy
• Debt Reorganization
• Debt Negotiation
• Estate Planning (living trusts, wills, etc.)
• Offers in compromise (IRS/FTB negotiation)