With unemployment hitting a record of 12.6% in March more than 2.3 million Californians remained unemployed, with 362,000 more people jobless than a year ago. Additionally, many city and county employees are faced with pay cuts as well as small businesses seeing drops in revenue up to 60%. Even so, economists note that further gains statewide are jeopardized by continued high unemployment, particularly in the Inland Empire and the Central Valley. Foreclosure activity remains concentrated in these inland areas, which suffer from above-average unemployment. DataQuick said mortgages were most likely to go into default in Riverside, Merced, Stanislaus and San Joaquin counties
While the word bankruptcy may carry a negative stigma with it, it may be a very positive choice for many California residents if you’re a numbers person. Bankruptcy chapter 7 and chapter 13 filing in Orange, Riverside, San Bernardino, San Diego and Los Angeles counties are increasing steadily as more Californians find the need to file bankruptcy to get out from under their financial troubles. While bankruptcy myths still exist, many still assume when they file bankruptcy chapter 7 or chapter 13 they will lose everything. This is NOT true at all. You may be able to keep ALL your property and eliminate ALL your debt says bankruptcy lawyer James D. Zhou, partner at the bankruptcy law offices of Zhou & Chini. Zhou goes on to say “I have been a bankruptcy lawyer for over 10 years and have never seen such a perfect storm to help consumers eliminate 2nd mortgages and unsecured debt”.
Listed below are the possible benefits that bankruptcy:
1. Filing chapter 7 bankruptcy allows for the "discharge" of most, if not all of your debts. Meaning that you are no longer legally obligated to pay the debts and your creditors must immediately stop all collection efforts.
2. Both chapter 7 and chapter 13 bankruptcies prevents real property from being repossessed and halts the home foreclosure process. A chapter 13 bankruptcy plan will consolidate all your payments and allow you to reinstate your loan while a chapter 7 may be a better choice if your 1st mortgage is current. Additionally, filing bankruptcy may require creditors to return property that was repossessed immediately.
3. Both chapter 7 and chapter 13 stop the collection process and halts harassing creditor collection calls. This means that creditors must stop attempting to collect on the debts after being notified of bankruptcy filing. If they continue you can sue them.
4. Prevents you from your utilities being shut off if you have delinquent utility bills. If your utilities have been turned off, filing for bankruptcy protection requires the utility company to restore services as soon as possible.
5. Stops/Prevents wage garnishments. If you file bankruptcy your employer will not be able to garnish your pay check.
6. If you are in the foreclosure process or have a trustee sale date filing bankruptcy will stop the foreclosure process and gives you time to catch up on mortgage payments if needed. This means you will not necessarily have to lose your home.
7. Filing bankruptcy will give you an opportunity to dispute false claims from creditors who may be trying to collect more than what it owed to them. You and your bankruptcy attorney will have your day in court to dispute erroneous collection fees.
8. Filing chapter 13 will allow you to strip a 2nd mortgage lien and liability if your property value is under water. Chapter 7 will eliminate your personal liability on a 2nd mortgage but the lien will remain on the property. Your bankruptcy attorney must file a motion to strip the lien in a chapter 13.
While bankruptcy will allow for the discharge of a number of debts, others remain non-dischargeable according to federal regulation. Non-dischargeable debts include family support, student loans, certain types of taxes, and criminal fines. Liens, mortgages, and other secured debts will also survive bankruptcy procedures seeing as how they are secured by either some sort of collateral or by the federal government.
The need for a highly qualified bankruptcy attorney is ever so present these days. The Law Offices of Zhou & Chini services the entire state of California and has experienced bankruptcy attorneys doing all the consultations and bankruptcy filing, not paralegals. To reach Zhou & Chini call (888) 207-9026 or visit www.zhouchinilaw.com
