Filing Bankruptcy in Monterey & Santa Cruz
It doesn’t matter where you live on the central coast…Salinas, Monterey, Seaside, Carmel, Watsonville, Aromas, Aptos, Santa Cruz, Capitola, or even as far away as King City, the purpose of bankruptcy on the central coast, is to give a person or family, that is straddled with debt, a “fresh start” by wiping out, all, or at least most of their debts. As we know, living in this beautiful area of California, the high cost of just living can be burdensome enough without the problems of accumulated, sometimes unfair, debt to pay off.
The purpose of this Monterey Bankruptcy website, is to help those that are exploring the idea of filing for bankruptcy in the Monterey, Salinas, or Watsonville areas a source of reliable information – information on the bankruptcy basics, bankruptcy laywers, and bankruptcy procedures. By the time you are done here, you should know enough to help you make an informed decision when making the decision and/or interviewing the best bankruptcy lawyer in the area for your case. Because of the complex nature of the forms, procedures, and rules, we always recommend a person at least meet with a lawyer before making a decision and most, like ourselves, give a free consulation.
*Important Note: Go with a local attorney that is also going to be with you in court! Many attorneys, even local, send others in for them that you have never met – make sure they are willing to put in writing that they will attend the hearing with you or that they will refund your money. I can’t tell you the number of cases we have seen where the person walks into a 341 meeting (like a court appearance where they take the oath and are asked a series of questions) and they’ve never met or talked with the attorney that is their to protect them – how can you be protected by someone that doesn’t even know you?
Number 1 – Most Frequently Asked Question!
How Will My Credit Be Affected By Filing Bankruptcy & How Can I Rebuild My Credit After?
Most people that file are already behind in their bills and therefore there credit is usually significantly bad to begin with. Because of this, filing can actually be the fresh start to making their credit good again. When a creditor finds a bankruptcy on a debtor(s) credit report, it shows them that all prior credit problems have been resolved. The question then becomes: Is the debtor creditworthy?
Because every creditor is different and each one treats bankruptcy with a different set of rules for determining creditworthiness, there are still many exceptions to granting credit. Normally a creditor likes to see how well debtor(s) are paying their bills during the first year or two after filing bankruptcy before they extend new credit to them.
So although a bankruptcy appears on a debtor(s) credit report for ten (10) years, most debtor(s) only find it to be a problem for a couple of years after filing, provided everything else looks good on their current credit report.
In addition, there are thousands of creditors who extend credit to people who have recently filed bankruptcy. The interest rates are normally higher, of course, but debtor(s) can obtain credit easily with one or more of them.
One of the best ways to build credit after bankruptcy is to obtain a secured credit card. (This also teaches the debtors how to start living without credit cards.) A secured credit card is one where money is deposited into a bank and the bank issues a credit card using the deposit as collateral. After the debtor(s) have demonstrated their ability to make timely payments, their credit line may be increased without any additional deposit of funds. Eventually, the secure credit card could qualify as an unsecured one.
However, the fact remains that one of the main reasons for filing bankruptcy is to get out of debt — not back into it.
We urge debtor(s) to take responsibility for their own financial spending and saving so they never need to file bankruptcy again. Once a debtor experiences the total freedom of paying for items and owning those items free and clear, they will be able to take control of their lives and in the process will discover they have more disposable income.
One of the best books a friend of mine recommends to help people in these situations is the New York Times bestseller:
The Laws of Money, The Lessons of Life by Suze Orman, (ISBN: 07432-45172)
Before credit cards existed the only assets the average American went into debt for was an automobile for transportation and a home for their family to live in. Everything else was purchased out of the monthly income, or saved for and purchased in full. The main reason Americans are in debt way over their heads today is because they want it now and don’t have the patience to wait.
2 Main Types of Bankruptcy for the Average Person in the Monterey & Santa Cruz County Areas – Chapter 7 and Chapter 13
We’ll address both separately (but note comparisons to each other).
Chapter 7 Bankruptcy
This is the traditional liquidation bankruptcy. It usually, from beginning to end, takes about 4 months with one appearance in a courtroom setting (the 341 meeting discussed elsewhere on this site). It’s also known as the “fresh start” bankruptcy in Monterey and Santa Cruz County. It’s significantly faster than a Chapter 13 bankruptcy, but if you have a significant amount of property that you wish to keep, it may not be the way to go – have a list of the total assets and what is owed on them before you see an attorney if you wish to have an idea if this is for you. From our experience, in most cases, the person filing, usually doesn’t have assets they have to worry about losing in a Chapter 7 bankruptcy.
Chapter 13 Bankruptcy
This is the type of bankruptcy for people that want or need to pay off part of their debt over a period of time…usually 3-5 years. Many times, in the Santa Cruz and Monterey areas, this type of bankruptcy is for people that have fallen behind on their mortgage and there is no other way to deal with the foreclosure situation. It’s also for people that don’t qualify for Chapter 7. Sometimes it’s for people that have too many assets and want or need to keep them and would lose them in a Chapter 7 bankruptcy (i.e. a 2nd rental home with some equity, multiple vehicles, business assets over a certain dollar amount).
What Do I Get To Keep?
In California, when filing, a person chooses one of two systems for keeping their property. An experience bankruptcy attorney in the Monterey or Santa Cruz areas can help you in applying the correct system to help you keep the most amount of property.
New Law Bankruptcy Myth
Many think the new bankruptcy laws make it harder to quality for Chapter 7, and in fact, when the laws were first passed, it appeared that way, but it only made the paperwork more complicated for the attorney – most people that filed under the old laws, would probably still have been eligible under the new laws – we’ve found that most people are honest and just got in over their heads in debt living life – maybe unexpected medical bills, or divorce, or a lost job put them their. They weren’t flying off to Hawaii spending lavishly, most were just trying to get by. So, yes the new laws make it more work, but most people can still file Chapter 7 if they need to.
Please look around our site for Bankruptcy Information in the Monterey & Santa Cruz areas.
Make Sure To Read Our Popular Information Pages for Monterey and Santa Cruz Residents
- Is A Credit Counselor Worth the Money?
- Top 5 Mistakes People Make When Filing Bankruptcy!
- 10 Things To Ask Your Bankruptcy Attorney BEFORE Hiring!
- Timeline for Chapter 7 Bankruptcy
- What Should You Bring to Your Bankruptcy Attorney
- Steps to Take to File Chapter 7 and Chapter 13 Bankruptcy in Salinas, Monterey, Watsonville, Seaside, or Santa Cruz
- How to Chose The Right Lawyer for Your Case
- What Debts Are NOT Erased in Bankruptcy?
- Can I Get Rid of Taxes in Bankruptcy?
- What Debts Are Erased in Bankruptcy?
- Can Monterey Bankruptcy help me?