FAQ's

Frequently Asked Questions

Q: Did the bankruptcy reforms of 2005 make it impossible to declare personal bankruptcy?

A: No. In spite of what you may have heard on television or on the radio, the reforms of 2005 actually had very little effect on an individual’s ability to get a fresh start through bankruptcy.

Q: Will all my neighbors know I filed bankruptcy?

A: Although a bankruptcy filing is a matter of public record, there is very little chance your neighbors will find out. Ask yourself when you last checked to see which of your neighbors had declared bankruptcy. Your neighbors' answers are probably the same.

Q: Will my creditors take everything I own?

A: Absolutely not. California has exemptions for certain kinds of property, such as your home, your car, clothing, and household items. It would defeat the purpose of helping people get a fresh start if creditors were allowed to leave you with no home or transportation to get to work. Many people keep everything they owned before the bankruptcy.

Q: Will I ever get credit again?

A: You might be surprised at how quickly you start getting credit card offers again. It is also possible to get secured credit cards, so you can continue to enjoy the convenience of credit, including fraud protection and online purchasing. It will likely be more difficult to purchase a house or car for a period of time after the filing, but close work with your bankruptcy attorney can help you reduce some of these difficulties.

Q: Isn’t bankruptcy just for deadbeats?

A: Not at all. Most bankruptcies are filed after a serious incident such as the loss of a job, divorce, or a devastating illness or injury. Most filers have tried their best for a long time to pay their bills. But once their creditors started adding interest and penalties—or sued them—they could not recover financially.

Q: Will Chapter 7 bankruptcy eliminate all of my debts?

A: Some debts cannot be eliminated in bankruptcy. These include child support payments, student loans, and certain tax obligations.

Q: Does my spouse have to file for bankruptcy too?

A: No, but sometimes that is the best approach. California is a community property state, and whether or not it makes sense for one spouse to file without the other depends upon a number of factors. Careful planning and coordination with your attorney will give you the best outcome.

Q: Does the bankruptcy judge expect self-filers to know the ins and outs of bankruptcy law?

A: The bankruptcy judge is going to hold you to the same standard of competency and standards of practice as a practicing attorney. He will expect you to be familiar with the Federal Rules of Bankruptcy Procedure, the Bankruptcy Local Rules of the Northern District of California, and the judge’s own particular rules for his courtroom. Keeping all the rules straight is not simple, and that's why retaining an attorney in these matters is highly advised.

Q: Prior to filing, how are credit card usage and debt accrual evaluated?

A: Credit card usage during the time before filing goes under the judge’s microscope. Don’t use your cards in a way that jeopardizes the discharge of your debt.

Q: Prior to filing, how are property transfers and sales viewed?

A: All property transfers and sales you make in the time leading up to transfers will go under the microscope as well. What you consider to be shrewd financial planning could be seen as a fraudulent transfer by the court.

Q: In my bankruptcy proceeding, do I have to deal with individual creditors?

A: Yes, and sometimes unscrupulous creditors will employ procedural tactics in court to confuse and fluster unrepresented filers. This is just one more reason to consider representation.