The Law Office Of
Tyson Takeuchi
Bankruptcy and Debt Relief Specialist
Serving California since 1995
State Bar #177419
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Frequently Asked Questions

It pays to educate yourself prior to calling a bankruptcy attorney. Then, you can ask for more precise questions based on a greater understanding of the process. To help, we have compiled a list of commonly asked questions.

How much does bankruptcy cost?
This is an understandably important question, given our client's precarious financial circumstances. We understand the irony of asking for exorbitant fees from clients who don't have a lot of cash. That said, we have made it our mission to offer the most competitive prices possible.

Does filing for bankruptcy automatically wipe out my debts?
No. The Court will set a hearing 30-40 days after the case is filed to determine whether or not the case should be allowed to proceed. Cases that are deemed too problematic to continue (incorrectly filed paperwork, fraud, and other violations of the Bankruptcy Code) will typically result in a dismissal of the case without discharge. That means the debt is still owed, and that is why it is especially important to consult with a bankruptcy attorney prior to filing bankruptcy. In a chapter 13 bankruptcy, a debtor must make monthly payments for the entire duration of the case (typically, 36-60 months) before being considered for a discharge.

How do I know if I qualify for chapter 7 bankruptcy?
In order to qualify, your household must make less than your state's median family income. For example, if you are an individual living alone seeking to file chapter 7, you must have made less than $47,243 in gross income in the last twelve months. Income limits move along a scale depending on household size, so let us help determine if you qualify or not.

Will bankruptcy prevent the garnishment of my paycheck or levy of my bank accounts?
It will, but only as soon as the case is filed. Unfortunately, bankruptcy's ability to prevent garnishment or levy retroactively is not guaranteed. Please read our page on garnishment and levies that occur prior to bankruptcy filing. Upon receipt of an earnings withholding or levy order, your best bet is to consult a bankruptcy attorney immediately, and should a bankruptcy case be feasible, ensure it is filed before your paycheck or bank account are cleaned out.

I was not able to file bankruptcy prior to the garnishment or levy. Can I get that money back?
There is a chance, and time is of the essence. Recovery of garnished and levied funds can quickly become a complicated and time-consuming experience. As soon as you're able, consult with a bankruptcy attorney to determine, firstly, if bankruptcy is right for you and, secondly, the course of action for recovering that money.

Will your office be present with me while I am examined in Court?
In the vast majority of our cases, we do appear in Court with our clients. The primary factor in determining whether we will be present or not is geography, so please go over this with the attorney during the free consultation.

How long does the bankruptcy process take?
A chapter 7 proceeding may take 4-6 months depending on the district and division it is filed in.

How long will the bankruptcy affect my credit? Will it affect my ability finance a vehicle or house?
The bankruptcy will be reported on your credit for 10 years after the date-of-filing. While no sane creditor would lend to you while you're in a pending bankruptcy proceeding, we have found many of our clients are able to re-build their credit 1-2 years after discharge, going so far as to find financing for new cars and even homes.

What about bankruptcy's effect on my ability to rent a home?
Our experience has taught us that some landlords may refuse to rent to you, but many will be happy to rent to you provided your credit score meets their minimum requirements. The key is persistence, and for every one landlord your find who will not work with you because of a prior bankruptcy, you will find several others who will.

How soon do I need to file bankruptcy in order to prevent the foreclosure of my home?
Technically, the moment a bankruptcy is filed is the moment any foreclosure or similar collection action is barred. Realistically, your bankruptcy attorney will need a little extra time to prepare, review and file your bankruptcy papers (the bankruptcy petition). Upon receiving the Notice of Trustee Sale of your property, immediately seek help from a bankruptcy attorney. Your home may depend on it. If the case is filed even a second too late, it is extremely unlikely the foreclosure can be rescinded.

Are taxes discharged in bankruptcy?
It depends. Please read our page on taxes in bankruptcy.

What about student loans?
Unfortunately, no. You may, however, force a lender to accept payments of the student loan through a chapter 13 bankruptcy. Please consult the attorney before deciding on this course of action.

What determines the amount of a chapter 13 plan payment?
Several factors determine the amount of a monthly payment. The first is the amount of debt to be paid over the course of the chapter 13 plan. If your 60-month plan proposes to pay back $20,000 in mortgage arrears and $1,000 in attorney's fees, expect to pay an additional 10% in trustee's fees. This will mean a minimum monthly plan payment of $385, provided you only have $385 per month to give. Any unpaid debt at the end of the plan will be discharged. The second determination of payment amount is how much disposable income you have (income minus living expenses). Let's say you propose the same plan to pay back $20,000 in mortgage arrears over 60 months, but you have $500 in disposable income. The Court will order that you pay $500 a month for 60 months or pay $500 a month until all your debts are paid, whichever comes first.

Can the Court increase my monthly plan payment in a chapter 13 case?
Yes. As a chapter 13 debtor, you are required to turn over your tax returns to the chapter 13 trustee for the life of the case. Should the trustee determine that you are making significantly more money than you were at the time you filed your case, the trustee may request that your monthly plan payment be increased in order to pay back a greater portion of your debt.

Am I able to reduce my monthly chapter 13 plan payment in times of hardship or reduced income?
Yes. Provided you can support your request for a reduced plan payment, your attorney may file a motion to reduce your monthly plan payment or even forgive missed plan payments.

I am disputing a debt with a creditor. How will this be handled in the bankruptcy?
Depending on which chapter you file, this can be handled in a number of ways. In chapter 7, it's very likely you can forget all about it, as the vast majority of debts are simply discharged. In chapter 13, it's the creditors responsibility to file a claim in your case in order to receive any payouts from your chapter 13 plan. No claim, no payout, and assuming you complete the chapter 13, no more debt. If the creditor does file a claim, your attorney may object to it provided the basis of that objection is legitimate (fraud, debt created by another in your name, etc.).

Is it true that I can remove a second deed of trust from my home?
Yes, on conditions. Please see our page on the subject.

I wish to modify my home loan. Can this be done in bankruptcy?
Unfortunately, the Bankruptcy Court has no power to compel a lender to reduce monthly mortgage payments to help the debtor. You must seek modification of the loan on the bank's terms, and the process is unlikely to be easy. Our experience has been that persistence and careful record-keeping are the best methods for a successful loan modification, but by no means is modification of the home loan guaranteed.

Have more questions? Call us! (800) 553-4080