Bankruptcy in Ontario California
 

Thank you for visiting the Ontario Bankruptcy Law Offices of “insert attorney name”. 

When you are faced with an important life decision, the advice and assistance of an experienced bankruptcy attorney often proves crucial to your understanding of the issues involved.  Please take a moment and visit our “Why hire us” page to see what separates us from the other Bankruptcy attorneys in and around Ontario.  We guarantee you will be satisfied with the ultimate outcome. 

Bankruptcy Overview

  • Federal Law allows an individual or business to eliminate debts or repay them with a repayment plan.
  • Bankruptcy provides you with a fresh start – not an end.
  • Thousands of people get help through bankruptcy each year.
  • Filing for bankruptcy prohibits collection agencies or creditors from contacting you.
  • An automatic stay protects you from any lawsuits against you.
  • Bankruptcy stays on your credit report for about 10 years.
  • Be careful!  You can be held responsible for a debt that you co-signed for another person.
 

United States Bankruptcy Court

  • In Ontario, bankruptcy must be filed in the Division Bankruptcy court.
  • Location:
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    • California Central Bankruptcy Court
  •  

      Riverside Divisional office

  •  

      3420 Twelfth Street

  •  

      Riverside, CA 92501

  •  

      Telephone:  951-774-1000

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      Hours:  Monday thru Friday - 9:00 a.m. to 4:00 p.m. 

Bankruptcy Types

  • Chapter 7 (Liquidation of Assets)
  • Best option for unsecured debts, such as:
  •  
    • Credit card debt
    • Medical bills
    • Payday loans
    • If you were in an automobile accident, any judgments pending against you.
 
  • Miscellaneous Information
  • Filing fee is $299.
  • Once you file for bankruptcy protection, creditors are prohibited from contacting you in any way.
  • An automatic stay is imposed on any lawsuits you might be involved in.
  • Non-exempt property is sometimes sold to pay creditors.
  • You can only file for Chapter 7 one time in an 8-year period.
  • The discharge of your debts usually takes a few months from start to finish.
 
  • Non-dischargeable debts can only be discharged under certain circumstances:
  •  
    • Child support payments
    • Student loans
    • Tax obligations
 

Before you can qualify for Chapter 7:

  • Before filing, you must qualify through a Chapter 7 Means Test:
  • Means Test A
  • First, your income will be compared to the median California income.
  •  
    • For the previous 6 months, your income must be the same or less than California’s median income for your size family.
    • Your debts are mostly business debts.
 
  •  
    • Examples of Median California Incomes as of 1/1/09:
  •  
    •  
      • One-person family: $47,363
      • Two persons:  $62,690
      • Three persons:  $68,070
      • Four persons:  $77,014

.

  •  
    • Means Test B
    • Your income is too high to qualify for Means Test A.
    • All of your expenses are considered:
  •  
    •  
      • Home
      • Utilities
      • Food
      • Clothing
      • Health Care
      • Transportation
  •  
    • After all the above expenses are added up, if you do not have enough income to pay into a Chapter 13 repayment plan, you will qualify for Chapter 7.
    • Circumstances Test
    • The court takes into consideration your total financial situation.
    • Looks into your present income, if you have one.
    • Asks if you can afford to pay a portion of your debts – qualifying you for Chapter 13 bankruptcy.
    •  

 

 

Automatic Stay

  • Most powerful Federal injunction available to debtors.
  • Stops:
  • All communication from your creditors
  • Foreclosure
  • Repossession
  • Lawsuits
  • Wage garnishment
  • Creditors must request a relief from the stay from the bankruptcy judge.
  • The stay will not affect:
  • Child custody hearings
  • Child support
  • Paternity hearings
  • Criminal proceedings
  • If a creditor violates the automatic stay, they are in violation of Federal and California laws.
  • You can recover a large monetary amount if the stay is violated
 

Other

  • Credit Counseling Course
  • Must complete a counseling session and receive a certificate before you can file for bankruptcy.
  • The course gives you all options available to you.
  • Takes less than 2 hours – can be done online.
 
  • Chapter 13 (Reorganization of Debts)
  • A solution for a short-term financial problem.
  •  
    • Behind on secured property payments.
    • You must have a regular income and disposable income each month.
    • Chapter 13 does not liquidate assets and clear the slate.
    • Allows you to keep your assets while catching up on money owed.
    • Stops foreclosure
    • Stops vehicle repossession
    • Tax obligations that are non-dischargeable in Chapter 7 but can be included in Chapter 13 plan
    • If you co-signed a loan for a family member or friend, you can be held accountable for the debt.
    • You are protected under Chapter 13 plan.
  • A three to five-year repayment plan that reorganizes your debts.
  • Automatic stay – stops any lawsuits you are involved in.
  • All creditors must stop harassing you.
  • You will attend a meeting with your creditors to discuss repayment plan; this happens about 2 weeks after you file.
  • At the end of your repayment plan, if all payments have been made, the remaining unsecured debt will be discharged.
 

Chapter 7 versus Chapter 13 Summary

The U.S. Bankruptcy Code asks, “Which bankruptcy is best for you?”

  • Chapter 7
  •  
    • Liquidates your assets
    • Discharges your credit card, medical and all unsecured debts
 
  • Chapter 13
  •  
    • Stops home foreclosure and vehicle repossession – allows you to keep
  • Repayment plan to pay debts in a period of 3-5 years
 
  • Chapter 11 (Reorganization)
  • Best option for large business restructuring.
  • Available to corporations, partnerships and individuals.
  • No limits to amount of debt.
  • The company can continue to operate – bankruptcy court must approve all decisions.
  • Steps involved in Reorganization Plan:
  •  
    • You must develop a plan with creditors, stockholders
    • You must present a disclosure statement that is filed with the court
    • The Securities and Exchange Commission (SEC) reviews your statement
    • Your creditors will vote on the plan
    • The court then confirms it
    • You carry it out
  • The company stock can continue to trade. 

Conclusion

If you are faced with a financial challenge, you can wish it away or you can explore your options with one of our attorneys. Call the Bankruptcy Law Offices of “insert attorney name” in Ontario.  We will make sure you get a fresh start and put you on the road to a bright and debt-free future.