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Frequently Asked Questions

Bay Area Bankruptcy FAQ's

Correct, reliable and up-to-date information is essential if you are thinking about filing for bankruptcy. Important questions about bankruptcy are answered below.

If you do not find the answer you are looking for in these FAQs, take a look at Bankruptcy Fast Facts, or browse the Bankruptcy Knowledge Base. If you still haven't found an answer, read the Complete Guide to Bankruptcy or Contact Us.

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In most cases the only people who will know you filed for bankruptcy relief will be your creditors and the people whom you tell.  While your bankruptcy is a matter of public record, the number of people filing is so large that unless someone is specifically looking for you there is almost no likelihood that anyone will know you filed.

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No.  The Federal Bankruptcy Code states "no private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title."  We have represented police officers, fire fighters, sheriffs, doctors, lawyers, as well as people with high level security clearance working for the government and not one of them has reported a job loss related to the filing of their case.  If you are concerned whether filing for bankruptcy will affect your job please make sure we address that during your consultation.

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Choosing the right bankruptcy lawyer is the most important decision you will make in your efforts to resolve your financial decision.  The bankruptcy process is complicated and poor decisions made by an inexperienced lawyer can negatively affect you for years to come.  You want to find an experienced attorney, not a paralegal, who is well versed in the law and knows how the law is practiced in your area.  As board certified bankruptcy specialists we have successfully represented thousands of individuals and companies in bankruptcy.  

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Anyone contemplating filing for bankruptcy should avoid using their credit cards and should not repay money to friends or family, transfer assets out of their name or try to save money by filing on their own.  It is important to seek the advice of a bankruptcy attorney as soon as possible so they can help guide you through the process and show you how to avoid all of the costly mistakes many people make prior to filing.  

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This is a complicated question that requires a lot of information to properly answer.  Generally speaking, if you do not own a home, or if you do own a home with little equity and are current on your mortgage payments, then Chapter 7 is the likely the best option for you.  If you are behind on your mortgage, have a second mortgage that is under water or owe tax debt then chapter 13 may be the better choice. Deciding which chapter bankruptcy to file is the most important decision to make in the entire process and should be made after a thorough consultation with a bankruptcy expert. 

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The main misconception about filing bankruptcy is that you will lose everything you have.  This is simply not the case.  In fact, almost all of our clients are allowed to keep everything they own throughout the entire process.  It is dangerous to base your decisions on the significant amount of misinformation surrounding the topic of bankruptcy.  Call for a free consultation and learn the facts.  If handled by a bankruptcy expert, the process is much easier than you think.

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There are several different kinds of bankruptcy and there are numerous options for resolving your financial situation that may not include filing for bankruptcy.  If you are asking yourself whether bankruptcy is the right decision for you then the first thing you should do it get educated on all of your options.  Borowitz & Clark offers a free in-depth consultation with an attorney who has helped thousands of people successfully resolve their financial situation.  You have nothing to lose by coming in for a consultation to find out if bankruptcy really is the best option for you.  

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There are two different types of bankruptcy that individuals typically file, Chapter 7 and Chapter 13.

Chapter 7 bankruptcy is often referred to as a “fresh start” bankruptcy because that is exactly what it is intended to provide.  In California this is the most common type of bankruptcy filed by individuals.  Chapter 7 wipes out most, if not all, of the filer’s unsecured debts.

Chapter 13 bankruptcy, on the other hand, is a 3 to 5 year long repayment plan that is typically filed when either the filer does not qualify for Chapter 7, or when Chapter 7 will not solve the filer’s problem.  The determination of which Chapter you qualify for and which one makes the most sense is an important decision and is best made after consultation with an experienced bankruptcy attorney.

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There are ways in which filing bankruptcy will help you.  First, it provides an immediate stop to all collections efforts.  This includes, harassing phone calls, lawsuits, wage garnishments and bank levies.  Chapter 7 bankruptcy will wipe out most, if not all, of your debts… Forever!!!!  Chapter 13 bankruptcy can provide you time to restructure your debts allowing you to do so in an orderly well thought out fashion.  This restructuring is overseen by the court and prevents creditors from playing tricks to derail your plan. 

There are numerous other benefits to filing bankruptcy that we cover during our free in-depth consultation. 

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There are many ways to solve financial problems other than filing for bankruptcy protection.  These may include debt consolidation, debt negotiation and seeking relief under state and federal consumer protection statutes.  Each of these "non-bankruptcy" options has advantages and disavantages.  During our free in-depth consultation we carefully analyze your situation to see if there are non-bankruptcy options that will better address your situation. 

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Filing for bankruptcy can remain on your credit for up to 10 years. However, it can take as little as two years to rebuild your credit score.  Rebuilding of your credit score starts immediately after filing by continuing to make regular on-time payments on your mortgages and/or car loans.  In addition, most of our clients receive applications for secured credit cards within weeks of us filing their case.  Once you obtain a secured credit card you can use them and pay the balance off every month.  This will add positive credit history to your credit report and raise your credit score over time.  What most people fail to remember when considering bankruptcy as an option, is that their credit score is already likely damaged.  Even if payments are made on time every month your credit score can be impacted by simply having too much debt.  Bankruptcy not only eliminates your liability on most current debts, it immediately improves your debt to income ratio which has a positive impact on your credit score.

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Many people do not realize they are too far in debt until it is too late.  Generally speaking, if you are only able to make minimum monthly payments on your credit cards, while continuing to use them to buy things, you likely have too much debt.  Additional indicators are not being able to keep money in the bank for emergencies,  making late payments to creditors, and bouncing checks.  If you are experiencing any of these then you likely have more debt than you can afford and bankruptcy will likely provide you with a great deal of relief.