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March 3,2020

Information You Need for Your Bankruptcy Petition

It is important to consult with a Monterey county bankruptcy lawyer before you file any documents with the bankruptcy court. Assets, liabilities, and income must be reported properly in order to document your eligibility to have debts discharged. The experienced lawyers at Miranda, Magden & Miranda, LLP, can help you prepare for bankruptcy to maximize your chances of a successful discharge. We can answer your bankruptcy questions and help you determine the best option for relieving your debt. 

Assets 

All of your assets must be disclosed to the bankruptcy court. This is because Chapter 7 bankruptcy is a “liquidation bankruptcy,” – meaning the court has the authority to liquidate your assets in order to pay the debts you want to be discharged. There are, however, many exemptions that can be applied to your assets in order to protect them from liquidation. It is important to work with an experienced bankruptcy attorney who knows how to properly apply these exemptions, so your assets are not left exposed to the liquidation power of the bankruptcy court.  

Your income is also an asset that must be disclosed to the court. Debtors must pass a “means test” in order to qualify for bankruptcy. This means that if your income is too high, the court will find that you have the ability to repay your debt and deny the request for the debt to be discharged without repayment. Income can be difficult for independent contractors, freelance workers, or those paid by commission. In these cases, it is especially important to get an attorney’s opinion about whether you will pass the means test. An attorney can help you assess your income, assets, and liabilities to determine whether you pass the means test prior to filing a bankruptcy petition.  

Liabilities

All debts must be disclosed to the bankruptcy court – even those you do not wish to have discharged. (For example, many debtors are current on the mortgage payments and wish to remain in the house without having any home debt discharged.) This is because your total debt is used in the determination of your eligibility for Bankruptcy protection. 

The easiest way to verify your creditors and amounts owed is by obtaining your credit report. Your attorney will help you provide the required legal notice to your creditors. You might also need to document any changes or errors in information on your credit report. For example, debt might be reported to the credit bureaus even though you have recently made a final payment. In this case, a statement from the creditor showing no balance due might need to be filed with your bankruptcy petition. The bankruptcy trustee might also have questions about your debt. At your required Meeting of Creditors, your attorney will help you answer these questions and determine what additional documentation may be needed.  

Our experienced California bankruptcy lawyers can help with your filings

Debt that is not resolved will stay on your credit. This creates a vicious cycle that some debtors are never able to free themselves from. Take control over your finances by consulting with an experienced bankruptcy attorney about your legal options. Contact us to schedule a consultation with one of our experienced Monterey bankruptcy attorneys.

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