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Will I Lose all my Stuff if I File Bankruptcy?

Will I Lose all my Stuff if I File Bankruptcy?

Many people worry they will lose all their belongings if they file bankruptcy, or that they must be flat broke to file. When actually, bankruptcy can be a way for you to protect the assets you have. Bankruptcy exemptions determine what property you get to keep, and your assets won't be taken away without your consent.

Bankruptcy does not automatically give all your belongings to the creditors. Many state and federal laws protect your rights and include many exemptions such as your house, cars and personal belongings that you need to continue with a normal life after bankruptcy proceedings.

State or Federal Exemptions

Exemption amounts differ from state to state; also federal exemptions may be available in your state. If your state allows it, you may be able to choose the state exemptions or the federal exemptions. Each set of exemptions offers different advantages to work best for the property you want to keep. You must choose one or the other, and you will not be allowed to select different factors from each system.

If the property you want to keep is equal to or less than the exemption amount allowed in your state, you may keep your belongings. In Chapter 7 bankruptcy if your vehicle is worth more than the allowable exemption, the bankruptcy trustee can sell your car, pay off the loan and any creditors and pay you whatever the exemption rate is.

Homestead Exemptions

If your home is worth more than you owe on it, then that amount is considered equity. In a Chapter 7 bankruptcy, the trustee may be able to sell your house and use the proceeds to pay the creditors. The homestead exemption allows you to keep a certain amount of the equity and protect it from the trustee. In a Chapter 13 bankruptcy, you may keep your home and work out a plan to make past mortgage payments.

Laws to Protect You

There are laws in place to protect you during the bankruptcy process. It is essential to speak to a qualified Sacramento bankruptcy attorney to find out which of your assets are exempt and non-exempt so you can keep the assets that are the most important to you.

Rental Property in Bankruptcy

Rental Property in Bankruptcy

What happens to rental property in bankruptcy, like most facets of bankruptcy law, depends on whether you file Chapter 7 bankruptcy or Chapter 13 bankruptcy. Furthermore, the state in which you file bankruptcy, the amount of debt you have, and the amount of equity you have in all your properties will affect what happens to the rental property that you own when you file for bankruptcy protection.

Rental Property in Chapter 7 Bankruptcy

When you file for chapter 7 bankruptcy protection and own rental property, the bankruptcy trustee will take over any property you own that isn’t exempted. Exemption amounts differ between each state and whether you are able to choose federal exemptions instead. In most cases of California bankruptcies, real estate you own that isn’t your permanent residence is more difficult to exempt and that might lead to it being sold to pay back your creditors. If you have little equity, however, you may be able to protect your rental property in chapter 7 bankruptcy by using a wildcard exemption which can be used to protect assets up to a certain dollar amount. Due to the fact that there are several exemption options in most cases, ask your bankruptcy attorney which set of exemptions would be best to use in order to protect your rental property in chapter 7 bankruptcy.

Rental Property in Chapter 13 Bankruptcy

When filing for Chapter 13 bankruptcy protection, the trustee usually won’t sell your nonexempt property, but the amount of equity you have in each property will factor into the total amount you must pay back through your Chapter 13 repayment plan. If you own rental property, there are a few benefits to filing chapter 13 bankruptcy versus chapter 7 which include getting to keep your property, in addition to, being able to add any missed payments into the repayment plan and pay them back over the course of your three to five year repayment period. Additionally, if you owe more than the rental property is worth, you may be able to decrease the overall repayment amount through a bankruptcy process called a “cram down”.

Bankruptcy is often a complex process and one that you certainly shouldn’t try to navigate on your own. If you own rental property that you want to retain during the course of filing for bankruptcy protection, contact an experienced bankruptcy attorney in Antelope to discuss your situation. A bankruptcy lawyer’s assistance and knowledge are invaluable and could represent the difference in being able to preserve your rental property and other assets.

How to Avoid Wage Garnishments

How to Avoid Wage Garnishments

A garnishment is the legal process for collecting a monetary judgment on behalf of a plaintiff from a defendant. Garnishments allow the plaintiff, or the “garnishor”, to take money or property from the debtor in order to satisfy a debt. The most common type of garnishment is a wage garnishment, which is the process of deducting money from an employee’s monetary compensation, usually as a result of a court order. Wage garnishments can continue until the entire debt is paid or arrangements are made to pay off the debt. Wage garnishments can occur when you owe child support, student loans, back taxes, or a court judgment has been entered against you. The court then issues an order requiring your employer to withhold a certain amount of money from your paycheck in order to pay the person or organization owned.

Wage Garnishments for Back Taxes, Child support, and Alimony

Typically, a creditor needs a court order to obtain a wage garnishment, but there are a few exceptions. Theses exceptions include child support, alimony, back taxes owed to the IRS, and federal student loans. All child support orders include an automotive wage withholding order. Alimony, if included in the same family support order, will be deducted as well.  But if the alimony order is separate, the alimony order usually won’t include the automatic wage withholding. With regard to student loans, the U.S. Department of Education can garnish up to 15% of your wages without a court order if you default on a payment. Additionally, the IRS has the power to garnish a large majority of your wages in order to pay back taxes. The total amount the IRS can garnish from your wages depends on how many dependents you have and your standard deduction amount.

Avoiding Wage Garnishments

Avoiding wage garnishments begins with working to stay current on all your payments, and when unable to do so, staying in contact with your creditors. The process of obtaining a wage garnishment involves a considerable amount of time, effort, and court appearances, so most creditors won’t want to go through the process if they can work a payment schedule out with you directly. Because the judgment creditor must file papers in order to obtain a wage garnishment, you will also be delivered written notice and have the right to a hearing before the garnishment begins. One way to avoid wage garnishments is to file a written objection to the wage garnishment. In most circumstances, the notice papers will include instructions on how to object, but if they don’t you can contact a local bankruptcy lawyer or the clerk of the court to get this information.

The amount that any creditor can garnish from your paycheck depends on the type of debt, as well as, the state laws in which you live. If your wages are currently being garnished, filing bankruptcy can help and it would be highly advisable to contact your Citrus Heights bankruptcy attorney in order to find out your options.

Getting Repo'd Car Back

Getting Repo'd Car Back

One of the most popular ways of getting repo’d car back is by filing Ch 13 in California. Regardless of whether it is a small car, SUV, truck, van or motorcycle, you can always get it back. One way is by filing for chapter 13 bankruptcy. And what’s more? You can also renegotiate the loan repayment terms with your lender and manage your other debts as well!

Getting Repo'd Car Back

Once you have filed for your chapter 13 bankruptcy, the US Bankruptcy court issues an ‘automatic stay’ order. This stay order prohibits all your creditors from further pursuing any collection activities against you. Also, your car lender loses their right to repossess your vehicle or sell it. This is if they have already repossessed it before the petition was filed. Typically, once you have filed your chapter 13, you lender will be obligated to return your car to you.

However, it is important for you to ensure a timely filing of the chapter 13 to retain your car. For instance, if your lender has already sold off your car, filing a petition later will not bring it back. In most states, the lender is obligated to hold a repossessed vehicle for at least 10 to 15 days before selling it. It is a good idea to file your chapter 13 within this period. Filing chapter 13 will prohibit the lender from selling your car. It also gives you to chance to reinstate your loan and get your repo’d car back.

Typically, when lenders are notified of chapter 13, they willingly return the vehicle to the debtor. However, in case your lender is reluctant to cooperate, your Sacramento bankruptcy attorney will file a Motion for Turnover, that will issue a court order for your lender to return the car to you.

Using Bankruptcy to Keep the Lights On

Using Bankruptcy to Keep the Lights On


When you’re behind on your utility bills, it can be a severely stressful situation. Odds are, that if your utilities are being shut off, this is just the tip of the financial issue iceberg for you. On a positive note, by filing bankruptcy, you can be protected from utility shut-off, including your gas, water, electricity, and telephone.

Afforded to consumers by the “automatic stay”, once you filed bankruptcy, the utility services company can’t refuse or disconnect your services, much in the same way that creditors must stop all collection attempts. This reprieve, however, is only temporary and you must show a good faith effort to pay what you owe and provide “adequate assurance” of payment within 20 days after filing for bankruptcy. Proof of “adequate assurance” is a monetary deposit, account co-signer, or other form of assurance that utilities company agrees upon.

Before resorting to this, you can contact the Utility Company directly to see if alternate payment plans can be arranged. For example, some utilities offer customers the ability to push back a pay date by a week or two. Other times, you can allow a month or maybe even two to go by before you actual face a shut-off. If you have already received a notice that your services will be shut off, time is of the essence. If you consult a Sacramento bankruptcy attorney and discover that bankruptcy is your best option, then an emergency bankruptcy may be needed to ensure that you don’t lose any services. This is a method of bankruptcy that allows your utilities to stay on, while you gather the necessary information needed in a bankruptcy filing.

Don’t delay in taking an account of your financial situation if you are facing a utility shut-off, home foreclosure, or vehicle repossession. Ignoring the issue will not help at all. Contact a local bankruptcy attorney to ensure you are making and educated decision about how to obtain debt relief.

Sale of Property in Bankruptcy

At Liviakis Law Firm, we work with real estate owners who have complex debt problems and wish to obtain financial stability through use of the Bankruptcy Code. Whether residential or commercial property, Chapter 11 bankruptcy and Chapter 13 bankruptcy provide the opportunity to sell property in bankruptcy at a price that maximizes profit for business owners and home owners, respectively, rather than foreclosing on property to sell it and use the proceeds to pay creditors.

For questions about bankruptcy property sales and the advantages compared to a short sale, contact me, a Sacramento attorney, for a free initial phone consultation today. When we meet, I will thoroughly explain your options and the implications of each.

Folsom Attorney, Advising on Asset Sales in Bankruptcy

Section 363 of the Bankruptcy Code, accessible through filing for Chapter 11 or Chapter 12 bankruptcy, allows the debtor to make sales, uses and leases of property using auctions, financial advisers, investments, transfers of contracts and other business transactions that are part of normal business operations.

Any sales, uses or leases of property outside the ordinary course of business require that the debtor obtain court approval and give notice to all creditors and interested parties. Property can be sold free and clear of liens and with minimization of successor liability under Section 363 — thereby increasing the value added to investors and improving chances for a profitable sale.

If filing for bankruptcy does not serve your financial goals, I can also assist with other options available for selling property to relieve debt, including short sales and trustee sales.

For Questions About Bankruptcy Purchases, Contact a Citrus Heights Lawyer

At the Liviakis Law Firm, we represent clients in communities throughout Sacramento County, El Dorado County and Placer County, California. Our conveniently located offices in Rancho Cordova and Sacramento are open 9 a.m. to 5 p.m. Monday through Friday. Free parking is available.

For a free initial consultation about property sales in bankruptcy with an experienced bankruptcy lawyer, contact an office near you. Your choice of legal representation can have a significant impact on the success of your bankruptcy filing.