Los Angeles Coronavirus (COVID-19) Related Bankruptcy Attorney
Under normal circumstances, people and businesses in Los Angeles find themselves overwhelmed by insurmountable debt. With the added financial strain brought upon the entire country through the spread of COVID-19, more people than ever are struggling. Fortunately, despite the coronavirus, bankruptcy is still a viable option, offering individuals a fresh start and businesses a way to restructure their debt.
Many people do not realize the protections and benefits associated with bankruptcy. Often, it is the most efficient method to improve your credit and get back on firm financial footing. Our Los Angeles coronavirus (COVID-19) related bankruptcy attorneys are prepared to help you through this difficult time. If your financial problems were a result of the coronavirus or had been building over time, call The Bankruptcy Group at (800) 920-5351 to schedule a free, confidential consultation to see if bankruptcy is the right option for you.
Chapter 7 Bankruptcy in Los Angeles
Depending on a person’s financial situation and goals, Chapter 7 might be the perfect way to eliminate mounting debt and get a fresh start. When someone thinks of bankruptcy, they generally imagine Chapter 7. A debtor could discharge the majority of their debt, freeing themselves of an economic burden they had been probably carrying for years. Credit card debt, personal loans, and other unsecured debt can be eliminated through Chapter 7.
As wonderful as it sounds, there are some restrictions and limitations. First, eligibility is determined by your income. Some people simply make too much money to take advantage of the benefits of Chapter 7. As of April 1, 2020, the household median income for an individual is $60,360, a two-person household is $79,271, a three-person household is $88,235, and a four-person household is $101,351. Each additional household member will add another $9,000 to the allowed median income. However, even if you make more than the listed median income, you still might qualify after all of your expenses, taxes, and other allowed monthly costs are calculated.
Additionally, in some cases, a debtor could be required to sell some of their property to pay their financial obligations. This does not occur often as a number of exemptions exist that permit Chapter 7 debtors to protect a considerable amount of their property.
Also, despite the vast amount of debt that is discharged through Chapter 7, there are specific financial obligations that will survive bankruptcy. These include certain taxes, student loan debt, child support, alimony, and criminal restitution.
Be sure to talk to our experienced Los Angeles bankruptcy attorney if you are interested in filing for Chapter 7. We will thoroughly review your income, your assets, and your debt to help determine if Chapter 7 is a beneficial option under your circumstances.
Chapter 13 Bankruptcies in Los Angeles
Chapter 13 serves multiple purposes. For a family that is in jeopardy of losing their home through foreclosure, it provides a means to stop a pending sheriff sale while allowing the homeowner to pay the money they are behind on over three to five years. If an individual’s income does not qualify for a Chapter 7, Chapter 13 might provide a means to pay a portion of their debt, discharge a substantial amount, while avoiding any federal tax implications associated with debt forgiveness. Depending on a debtor’s circumstances, other potential benefits of Chapter 13 include dramatically lowering a car payment and striping a second mortgage from a home.
Unlike Chapter 7, a Chapter 13 bankruptcy will last significantly longer – from three to five years. A debtor is required to propose a plan to pay their creditors. The amount that a debtor will have to pay is determined by several factors, including the debtor’s income, assets, type of debt, and ordinary monthly expenses. Our Los Angeles bankruptcy attorneys will analyze your situation, review your financial goals, and work with you to decide if Chapter 13 will provide the fresh start you need. Often, filing for bankruptcy is more cost-effective and efficient than settling with your creditors, applying for a consolidation loan, or working with a debt relief company.
Chapter 11 for Huntington Beach Businesses
Chapter 11 could help a struggling business right itself and provide a roadmap back to financial success. Because of COVID-19, more businesses are fighting to stay economically afloat. Restructuring through bankruptcy allows a business to weather the storm while being protected by the court. Because of the complexities involved with Chapter 11, every case is unique. If you believe your business is on the verge of failing, contact our knowledgeable lawyer to discuss the benefits of Chapter 11.
Coronavirus Effects on California Consumer Bankruptcies in Los Angeles
Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide an economic stimulus to individuals and businesses adversely impacted by COVID-19. Parts of the legislation modified the Bankruptcy Code to assist debtors facing additional hardships due to the pandemic.
First, any stimulus payments that a household receives are not considered income for any bankruptcy calculation. This means that the funds you receive through the stimulus package will not count in the income calculation to determine eligibility for Chapter 7. Additionally, those funds will not affect the Chapter 13 calculation of disposable income or be required to be listed as monthly income. A debtor will have free use of any money provide as assistance without concern that it will disrupt their bankruptcy.
Additionally, the amendments permit a Chapter 13 debtor who has a confirmed plan the ability to modify their plan, extending their payments 24 months beyond the standard 60-month time limit. The debtor must have experienced a “material financial hardship” attributable to the coronavirus to take advantage of this change in the rules.
Chapter 11 Los Angeles Bankruptcies and the CARES Act
The CARES Act also amended the Bankruptcy Code creating a more efficient and less expensive option for small businesses to take advantage of the benefits of Chapter 11.
- Deadlines associated with a typical Chapter 11 proceeding have been eliminated or significantly limited.
- Small businesses will not be required to pay the monthly U.S. Trustee fee.
- The creditors committee will no longer be part of Chapter 11 cases filed under the new provisions.
- A court-appointed trustee will provide guidance to move the bankruptcy case forward, not take control of business operations.
- The new provisions restrict the ability to submit a restructuring plan to the debtor business only; creditors are no longer permitted to file competing plans.
Call Our Los Angeles Coronavirus (COVID-19) Related Bankruptcy Attorney for a Consultation
Financial difficulties exist outside a pandemic. However, COVID-19 has made many people’s positions more precarious. Bankruptcy remains a valuable tool in eliminating debt and getting a fresh start. If you are struggling with debt or just have questions concerning bankruptcy, contact our Los Angeles coronavirus (COVID-19) related bankruptcy attorney today. Call The Bankruptcy Group at (800) 920-5351 for a free, confidential consultation.