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When you file bankruptcy, you must and include all of the debts you owe, including all debts to credit cards, bank loans, and other common creditors. You must also include any debt to relatives or friends that you’ve borrowed money from. All creditors must be listed on the bankruptcy petition, as you’re not allowed to pick and choose which creditors you’re filing bankruptcy against and which you are not. However, you are always able to pay creditors if you wish, such as friends or family.
You should not be afraid of losing your vehicle when filing for bankruptcy. You have the right to keep your vehicle and reaffirm the debt, redeem the vehicle, or in a Chapter 13, pay for the vehicle through the Chapter 13 plan. Most auto loan lenders would rather have you make your payments than repossess the car and be forced to sell it, they are not in the business of selling used vehicles. If you file a Chapter 7 bankruptcy, you can keep the car and ask the creditor for a reaffirmation agreement, for which we typically negotiate an interest rate of 12% or lower, judges in our district will not approve such an agreement that exceeds 12% interest. If you attempt a reaffirmation and the Judge denies it, and you continue to pay for the vehicle, you may keep the vehicle. Another option is to redeem the vehicle for fair market value, which can save thousands of dollars off the original price of the vehicle, as a vehicle loses exponential value when it drives off the lot. However, if you cannot afford any of these options, you will lose possession of the vehicle, which would happen even without a bankruptcy filing.
Many of my clients come to me after trying private debt consolidations services, they were sued because the private debt settlement company failed and they were forced to file bankruptcy. Many of these consolidation services require you to make monthly payments to them, even if they do not begin to resolve your debt right away. They may take months or even years to resolve your debt. Meanwhile, you still have to make monthly payments for their service, and you are exposed to being sued by the creditors.
Typically, a debt consolidation service is more expensive and lengthier than a bankruptcy, as you are required to pay their monthly fee and still owe payments to your creditors. Another reason I recommend bankruptcy over debt consolidation is that creditors have the right to refuse settling your debt, and unless you have filed for bankruptcy, they have a right to collect that debt from you, even through a lawsuit.
Perhaps it is true that filing bankruptcy is time-consuming and a little bit onerous, but it’s the first step in taking responsibility for your credit and debts. Developing a budget and reviewing your income are very important skills, and failing to do these things could prevent someone from achieving financial success or from a comfortable retirement. Therefore, although bankruptcy may be time-consuming, if you are in a difficult place financially and bankruptcy is a good option, it is worth the time and effort.
For more information on Filing For Bankruptcy In California, an initial consultation with an experienced California Bankruptcy Attorney is your next best step. Get the information and legal answers you are seeking by calling (916) 685-7878 today.
Mr. Cianchetta is an OUTSTANDING attorney. I was a little nervous about seeing an attorney for my case. Mr. Cianchetta and his staff made my wife and I feel right at ease. He took extra time explaining what to expect before, during and after our process. His advice was right on!
- Jack M.
