January 2017
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<strong>January</strong> <strong>2017</strong><br />
THE VALLEY BUSINESS JOURNAL<br />
www.TheValleyBusinessJournal.com<br />
13<br />
Have You Recently Thought:<br />
“Is Bankruptcy Right for Me?”<br />
by Morton J. Grabel, Attorney at Law<br />
For many people, declaring bankruptcy<br />
is not only a financial decision;<br />
but sometimes a personal one. Therefore,<br />
no one can really advise you if it’s right<br />
for you.<br />
However, factors such as the stigma<br />
of filing bankruptcy has considerably<br />
lessened over the years. Moreover, the<br />
Federal Government has deliberately<br />
carved out a place in the IRS Code [for<br />
example a Chapter 7] for individuals who<br />
need a fresh start by filing bankruptcy.<br />
In light of the preceding, consider<br />
the following:<br />
1: Can you file for bankruptcy?<br />
If you have enough money to pay your<br />
creditors, you may be ineligible to file<br />
for bankruptcy.<br />
Question - How would the bankruptcy<br />
courts know if you are qualified to file<br />
for bankruptcy?<br />
Answer - You will be required to complete<br />
specific paperwork, show recent<br />
tax filings and pass the “means test”<br />
created within the Bankruptcy Reform<br />
Laws. If you make less than the median<br />
income established in California, you<br />
may qualify. On the other hand, if<br />
your income exceeds that figure and<br />
you have money left over after paying<br />
your necessary monthly expenses, you<br />
might not be able file.<br />
2: Your immediate future is bleak and<br />
you do not predict it getting better<br />
without filing bankruptcy.<br />
Question - But what if you know your<br />
hardship is temporary? What if you<br />
foresee better cash flow in the next<br />
couple of months or 6 or even 8 months<br />
from now?<br />
Answer - You may want to wait it out.<br />
When your financial circumstances<br />
improve, you can pay down more of<br />
your debts. But then again, only you<br />
know if you can endure the pressure<br />
of collections letters, services being<br />
cut-off, debt collectors calling you and<br />
creditor lawsuits being filed against<br />
you.<br />
3: Ok, but what if: a] your debts are<br />
long term, b] your income continues<br />
to dwindle, c] there is a no light at the<br />
end of the tunnel and d] most debts are<br />
unsecured?<br />
Question - Will all of your debts and<br />
liabilities go away in bankruptcy?<br />
Answer - Bankruptcy discharges most<br />
unsecured debts such as credit and<br />
charge card balances, medical bills,<br />
collection accounts etc.<br />
Note: * Other debts like student loans,<br />
certain tax debt, certain legal bills and<br />
child support arrearage may not go<br />
away even though they are unsecured.<br />
In addition, liens on a secured debt like<br />
a mortgage or a car loan may remain<br />
your obligation to pay unless there is a<br />
“cram down”. So look at your liabilities:<br />
If the bulk is dischargeable, you<br />
may wish to file a chapter 7 bankruptcy.<br />
[There is also a chapter 13 Bankruptcy,<br />
but that is for another day].<br />
4: Be sure you thoroughly understand<br />
the downside of bankruptcy and the<br />
conditions that must be met in order<br />
to be successful in your bankruptcy.<br />
Question - What exactly do you mean<br />
the downside and the conditions of<br />
bankruptcy?<br />
Answer - For example, your credit rating<br />
score will drop and the bankruptcy<br />
filing will be on your credit report for a<br />
long time. Also, there are some simple<br />
conditions that must be met: a] For<br />
example, you will be required to take<br />
a Pre-Bankruptcy Credit Counseling<br />
Course after you file your petition for<br />
bankruptcy. The course is inexpensive<br />
and takes usually about 60 to 90 minutes<br />
to complete. b] There is also an<br />
inexpensive Post-Bankruptcy Debtor<br />
Education Course. The course is usually<br />
a little more than 2 hours and must<br />
be completed no later than the 45th day<br />
after the creditor’s 341 meeting. Both<br />
courses can be taken on-line by computer<br />
or by telephone. Joint bankruptcy<br />
filers can take the courses together.<br />
Thank you for taking the time to read<br />
this article on Bankruptcy. Our office<br />
provides Chapter 7 bankruptcy services<br />
for only $1385 including filing fees and<br />
attorney representation at the 341 hearing<br />
*in Riverside County Only*.<br />
Please note the information provided<br />
above is general and must not to be relied<br />
upon for your specific legal needs. *You<br />
should always consult an attorney to<br />
answer your legal questions. For more<br />
information about bankruptcy or other<br />
legal matters, contact the Law Offices<br />
of Morton J. Grabel here in Temecula at<br />
(951) 695-7700. Mort is a graduate of an<br />
ABA Law School, possesses an MBA, is a<br />
Licensed Nursing Home Administrator in<br />
good standing and also a licensed Real<br />
Estate Broker. He formerly served as the<br />
President of the Mt. San Jacinto/Hemet<br />
Bar Association, for the years 2013-2014<br />
and is a member of several Chambers of<br />
Commerce.<br />
“<br />
On the other hand, if your income exceeds that figure and you have<br />
money left over after paying your necessary monthly expenses, you<br />
might not be able file