LAW OFFICES OF
​JENNIFER REICHHOFF
14895 E. 14th St., Ste 320
San Leandro, CA 94578
​Tel.:  510-915-0595
Fax:  510-372-0205
Map San Leandro Office

Frequently Asked Questions

All of the following are GENERAL responses to commonly asked questions. In order to give you legal advise based on your unique situation, you should always speak to a qualified bankruptcy attorney.

In order to better help you navigate the FAQs section, a rough table of contents has been provided. There can be some overlap, so a question may be placed in more than one category.

A. Common FAQs

A. General FAQs

1.  Can I be arrested for not paying my credit card and/or medical bills?
You cannot be arrested for simply failing to pay back your debts unless you knowingly committed a crime, such as fraud, embezzling funds, etc. You can be sued in a civil suit (not criminal) if you do not repay debts, which can result in a wage attachment, lien or bank levy, however, filing a bankruptcy can stop all of these.

2. Will a Chapter 7 get rid of all of my debts?
Common debts that you are able to get rid of or "discharge" are credit cards, medical bills, payday loans, personal loans, deficiency balances on cars or foreclosed homes, and, sometimes, back income taxes. Certain debts, such as student loans and child support, cannot be discharged.

3. What is secured debt, priority debt and unsecured debt?
Any debt that is attached to property, that has been guaranteed by property, is secured debt. When you default on a secured debt, the lender can recover the property. Common examples are mortgages, liens and auto loans. Less common examples are debts with certain stores, such as Kay Jewelers or Best Buy.

 Priority debts are debts that congress has decided should be treated in a special way in bankruptcy. These can include certain taxes, child support, government fines and certain DUI-related fines.

Unsecured debts are everything else. There is no property associated with the debt and congress has not decided that they should have special treatment in a bankruptcy. Common examples are credit cards, department store cards, medical debts, pay-day loans, personal loans, student loans, deficiency balances and certain tax debts.

4. Where can I file a bankruptcy?
Where you file depends on the county you live in. Do you live in Santa Clara County? Then you file in the San Jose Division. San Mateo County? San Francisco Division. Alameda or Contra Costa County? Oakland Division.
If you live in the greater Bay Area, click here for the Northern District Map. If you live in the central valley, like Stanislaus County, Solano County, Sacramento or San Joaquin County, click here for the Eastern District Map.

5. I heard that the law changed and now I might make too much money to qualify for a bankruptcy.
The bankruptcy code was changed in 2005 to "prevent and reduce fraud." These changes are generally disliked by both debtor's counsel and judges alike because they have required or created nonsensical results. The reality? Fraud was and is incredibly uncommon in bankruptcy. If you qualified for Chapter 7 before the law was changed, you probably qualify now (over 90% of debtors who would have qualified before 2005 still qualify).
 
One change was the addition of a "Means Test" requirement. The means test is a budget test that looks at the income you have earned in the last six months, but also looks at certain expenses and changes in circumstances. Other changes include providing your most recent tax returns and six months of income verification.

If you earn too much money to file a Chapter 7, you may still file a Chapter 13 (usually). The only income requirement in Chapter 13 is that you are able to afford your monthly plan payment, however excess disposable monthly income can cause your Chapter 13 plan payment to increase.  

6. What is the difference between a Chapter 7 and a Chapter 13? 
In a broad sense, Chapter 7 allows you to walk away from many types of debts without having a repayment plan (as long as you do not have too many assets). If your assets are higher than you can protect in the bankruptcy, then a trustee can sell assets in order to pay creditors. 

Chapter 13 is typically a 3-5 year repayment plan where you can reorganize and even lower certain types of debts. For example, you can repay mortgage arrears or missed car payments. You can repay (and sometimes reduce) back taxes. Chapter 13 may also be able to reduce the loan balance of a car note, avoid liens against your property, and repay as little as 0% of unsecured debt. 

7. I have a wage garnishment, can a bankruptcy stop it?
Yes! A bankruptcy will stop a wage garnishment at any time, even if you have been having your wages garnished for a while. Sometimes you can even recover some or all of the most recent garnished wages.

8. I have been sued, can a bankruptcy stop it?
Yes! A bankruptcy will stop a lawsuit at any time. If you have been recently served, if you have a judgement against you, if you are having your bank accounts levied or wages garnished, a bankruptcy will stop any further collection and stop the lawsuit from continuing.

9. I can't afford my car and I don't want to keep it. What will happen?
In a bankruptcy, you can surrender your vehicle and any deficiency balance owed on the car will be treated similarly to your credit cards. For example, if you file a Chapter 7, you will wipe out the deficiency balance, and if you file a Chapter 13 and you are repaying 1% of your credit card debt, then the lender will get 1% of the deficiency balance. 

Outside of bankruptcy, if you are unable to make your car payments, you can either voluntarily return your vehicle or your lender will make arrangements to repossess it. Once the car is picked up and sold at auction, any balance owing on the car (the difference between the amount that was owed and the amount the car was auctioned for) is called a "deficiency balance," and your lender can sue you to garnish your wages or levy your bank accounts.


10. My car was repossessed yesterday, can I get it back?
Usually, yes. You can almost always recover a vehicle after a repossession as long as the car was not sold at auction. This means that you will have to immediately provide your necessary documents and fees in order to get a case filed. After your case if filed, the lender is contacted and you will be given the information to go pick up the car. If you are filing a Chapter 13, you will not pay fees (or very nominal fees) directly to the impound lot when you go to pick up your care.

11.  I am behind on my car payments, I need my car for work, and the lender is threatening to repossess my car. Can a bankruptcy help?
Yes! In a Chapter 13, the balance owed on the car, including the missed payments, will be put into your plan payment and spread out over a 3 to 5 year period. You may also be able to reduce the interest you pay on the car and/or reduce the principal balance on the vehicle (see FAQ #7 regarding "cram-down" for an example). 

12. What is a "cram-down" on a vehicle?
In bankruptcy, if you purchased your vehicle over 910 days (about 2.5 years) before your case is filed, you may be able to reduce the principal amount that you repay and you may be able to reduce the interest rate. 

If your car is worth more than the balance owed, you will pay back the lesser amount (the balance owed).

If the loan against your vehicle was NOT for the purchase of the vehicle, but rather a title loan or a refinanced car loan, then you do NOT have to wait 910 days to cram-down the principal. You can cram-down at any time.

Example:  you purchased an Acura three-years ago at 29% interest, the current balance owed is $30,000, and the current Suggested Retail Value is $15,000. In a Chapter 13, you would only repay $15,000 of the loan, the interest would be reduced (currently, the rates are between 5%-7%), and your car payments would be spread out over a 3 to 5 year period. If you were to repay this $15,000 at 5% over 5 years, the car payment portion of you bankruptcy would be about $300 per month. The remaining amount of the debt is discharged in your case.

13. I have judgement liens against my property, can I get rid of them?
Sometimes. To determine if you avoid a judgement lien, you will need to know (1) how much you owe on your mortgages (or any other debts that were recorded before the judgement lien), (2) how much equity you are able to "exempt" or protect from your creditors under California law (this can range from $75,000 to $150,000 depending on age, income, etc.), and (3) how much your house is worth. If your house is worth more than #1 and #2 combined, then you may be able to remove some or all of the judgement lien. 

14. Can a bankruptcy save my house?
Filing a bankruptcy can often save your home, but whether or not you are able to do that depends on what you are able to afford. Typically, you can repay all of your arrears (missed payments) through a Chapter 13 bankruptcy plan, but in some cases a bankruptcy can allow you time to work on a loan modification with your lender.

15. I have a house or land in a foreign country. Do I have to put that information in my bankruptcy?
Yes, you are required to list all property you own anywhere in the world in your bankruptcy documents. Your documents are signed under penalty of perjury, and you can risk losing more than just that piece of property for not disclosing it. Tell your attorney about everything you own; you will be advised whether you can file a Chapter 7 or if a Chapter 13 is a better option.

16. Should we file a bankruptcy before our divorce is final?
The timing regarding when to file a bankruptcy depends on the type of bankruptcy, assets, liabilities and if you have some cooperation with your soon-to-be ex-spouse. Routinely, when you have debt, it is in the best interest of both parties to file a bankruptcy prior to the divorce so that you can both get a fresh start., however this is a complicated issue and should be discussed with an attorney.

17. If I file an individual bankruptcy, how will that affect my spouse?
It depends. Your attorney will need to look at things like community vs. separate property issues and income/expenses used toward the household, among other things. In order to do this, you will need to tell your attorney about all of the assets, income and expenses of both spouses, even if you are separated. Often, you will be asked to provide copies of pay check stubs and a list of your non-filing spouses monthly expenses that they pay on their own (i.e. car payment). It is important that you disclose all of this information to you attorney because your non-filing spouse's property may or may not be at risk.

18. I am in a same-sex marriage. Can I my spouse and I file jointly?
In California, the answer is yes, as long as you were married in a state that recognizes same-sex marriage.

19. How much does it cost to file a bankruptcy?
Fees vary depending on the type of bankruptcy you are filing. I offer a free consultation where we will meet and discuss your financial situation - I will be able to set your fees at the consultation. The bankruptcy court charges a filing fee of $310.00 for Chapter 13's and $335.00 for Chapter 7's. Typically, attorney fees in Chapter 7's range from $1,500.00 to $2,500.00, however if you have a complicated case, are filing a bankruptcy for your business or high income tax debt, the fee may be higher. Chapter 13 attorney's fees are set by the court. All attorney's fees must be paid in full prior to the filing of a bankruptcy, although you may be able to pay your fees off in a payment plan (varies by case).

20. Can I pay my Chapter 7 bankruptcy attorney after my case has been filed?
The general answer is no (there are exceptions), and no reputable attorney will tell you that you can pay off the balance of your fees post-filing. All fees must be paid before your case is filed. 

21. Do I need an attorney to file for bankruptcy?
You can file a bankruptcy without an attorney, but it is never recommended. I do not say this because I am an attorney, but rather because it is very easy to run into problems which can result in losing your assets or other complications.

22. How do I pay you to represent me?
I accept personal checks, cashier's checks, debit cards, money order, Zelle and cash. I offer affordable monthly payment plans and represent  you until all of your fees have been paid-in-full (but I will not file a case for you until all fees have been paid). If you needs to file an emergency bankruptcy, payment plans may not be acceptable.

23. Do you accept credit cards?
No, I do not accept credit cards, but I do accept debit cards and Zelle. However, if you need to immediately retain my services, I will accept a post-dated check.

DISCLAIMER

The information contained in this site is not legal advice nor is it intended to be legal advice. The information contained in this site is intended for general information purposes ONLY, and should not be relied upon or construed as legal advice or advice regarding your legal rights. YOU SHOULD CONSULT AN ATTORNEY FOR ADVICE REGARDING YOUR INDIVIDUAL LEGAL SITUATION. 

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