Los Angeles Bankruptcy Attorneys
Is Bankruptcy Right for You?
No one should live under the heavy shadow of significant debt. Yet millions of Americans each day worry about how they are going to get their debt under control and feel positive about their financial situations again. What many do not know is that bankruptcy could be the solution.
Are you also worried about what to do with your debt that seems to be unpayable? Let Chung & Ignacio come to your assistance today by offering legal guidance and moral support. Our team of Los Angeles bankruptcy lawyers is standing by to discuss your bankruptcy options with you, including both Chapter 7 and Chapter 13 filings. Your financial situation is unique, so choose a law firm that gives you truly personalized representation.
Unsecured Debt Versus Secured Debt
There are two primary types of debts:
- Unsecured: An unsecured debt is any debt that has no collateral property or assets tied to it. If an unsecured debt becomes defaulted, then the lender cannot take any collateral to repay it instead.
- Secured: When a loan is created with a lien, it is a secured debt. If the debt becomes defaulted, then the lien can be triggered, and the collateral property may be collected by the lender.
A successful bankruptcy filing can eliminate all or portions of both unsecured and secured debt. However, when a secured debt is eliminated through bankruptcy, there comes the risk of losing collateral due to a lien. For example, your mortgage likely comes with a lien against your home. If the mortgage is eliminated in your bankruptcy, then the lien may trigger, and the bank or other lender can stake a claim in your home.
Bankruptcy Exemptions in California
California has bankruptcy exemptions, though, which provide protections to bankruptcy filers. Property under certain values may be protected from repossessions, even if they have a lien. Our job as your Los Angeles bankruptcy attorneys will be evaluating your debts to identify liens and exemptions, with the objective of discharging as much debt as possible while losing as little as possible to collections and collateral.
Once we understand your debt, we can help you choose the right type of bankruptcy filing. What many people do not know is that there are various types of bankruptcy filings with different benefits and potential setbacks. For most individuals, the only two options are Chapter 7 and Chapter 13.
So, which one is correct based on the unique details of your financial situation?
Chapter 7 Bankruptcy
If you are feeling buried under significant debt that can never be repaid, then it might be time to consider Chapter 7 bankruptcy. This form of bankruptcy is known for being able to discharge most or all debt, excluding some exceptions like student loan debt. However, there is typically a higher risk of losing collateral property when secured debt is discharged, and there might be noticeable “damage” to your credit score.
Chapter 13 Bankruptcy
If you think you could repay your debt if you were given some leniency, then we will want to discuss Chapter 13 bankruptcy with you. Chapter 13 does not try to discharge or erase your debt but instead focuses on making it more manageable.
Debts are negotiated and reduced before a three- or five-year repayment plan is created. Any debt you cannot repay at the end of the plan is usually discharged assuming you made an honest effort to make as many payments as possible. Although you have to pay some of your debt in Chapter 13, the trade-off is your property and your credit score are often protected.
Most people, unfortunately, assume that bankruptcy is frightening, stressful, and all-around negative. Chung & Ignacio is here to show you the truth: bankruptcy can be a good thing. Our Los Angeles bankruptcy lawyers are standing by to show you through honest, responsive, and compassionate legal representation. By the time we are done with your case, we hope you are living stress-free and debt-free, just like you deserve.