Our bankruptcy practice focuses on Chapter 7 and Chapter 13 bankruptcies that are often driven by real estate and mortgage debt. Bankruptcy can be a very useful tool in negotiating a loan modification or getting mortgage debt reduced by lien stripping or cram downs. Attorney Acosta's 20 plus years as in house counsel for banking institutions gives us a unique perspective on mortgage debt and mortgage debt solutions. We are here to help.

Financial Problems Can Happen to Anyone

Did you know that filing bankruptcy may:

  • Stop your creditors from calling and harassing you
  • Stop all debt-related lawsuits against you
  • Stop foreclosure actions
  • Stop repossessions
  • Stop wage garnishment
  • Give you a fresh start
  • Help you reestablish excellent credit

Consumer Bankruptcy

Chapter 7 Bankruptcy

In 2005 Congress passed a comprehensive bankruptcy reform bill called the Bankruptcy Abuse Prevention & Consumer Protection Act (BAPCPA).  This law tightened the requirements necessary to obtain a discharge of debts through a chapter 7 bankruptcy.

The most common form of bankruptcy for consumers is a Chapter 7 bankruptcy.  This form of bankruptcy gives debtors a “fresh start” by discharging debts.  Debts that are discharged do not have to be paid back. Filing for chapter 7 will require a debtor to list all of their debts, income and assets in order to determine what property the debtor can keep.  Debtors are allowed to keep certain exempt property such as a minimum of household goods and interest in one automobile.  Property in excess of this exempt property may have to be turned over to the bankruptcy trustee to be liquidated to satisfy claims of creditors.  However, most chapter 7 bankruptcy cases involve debtors who do not have any non-exempt property that could be used to satisfy creditors.  Once a chapter 7 case is successfully back.

The debt owed on a mortgage may be discharged through a chapter 7 bankruptcy (although the debtor will have to give up the home).  However, in some cases, it is possible to keep a home that is in foreclosure by getting current on the payments and agreeing to keep paying for this debt in the future.

Chapter 13 Bankruptcy

People who make too much money or own too many assets to qualify for a Chapter 7 bankruptcy still have an opportunity to reorganize their debt.

If you have a regular source of income, you can file bankruptcy under Chapter 13 of the Bankruptcy Code.  Often called the wage earner’s plan, Chapter 13 bankruptcy allows you to pay off all or a portion of your debts within three to five years.  You are not required to pay back all of your debt!  The bankruptcy laws control the amount you must repay.

Under Chapter 13 bankruptcy, the money you owe on your mortgage, vehicle loans, student loans, credit card debts and other unsecured debts is consolidated into one reasonable, interest-free payment.  While you are in a Chapter 13 debt repayment plan, your creditors cannot attempt to collect from you directly.  That means no more harassing phone calls, wage garnishments or repossessions.

Many people do not realize that the payments they are asked to make under a Chapter 13 bankruptcy are based on an amount they can afford.  Reasonable living expenses, child support payments, alimony and other payments you are ordered to make are deducted from your income available for debt repayment.  You are not required to pay all of your debt.

Chapter 13 provides the chance for people to save their homes from foreclosure.  By filing under this chapter, individuals can stop foreclosure proceedings.  Chapter 13 bankruptcy will also stop your car from being repossessed by the finance company.

In many Chapter 13 cases, once the reorganization is complete your remaining debts may be discharged.  The end result for these debts is similar to a Chapter 7 Bankruptcy – your obligation to pay is terminated and you can focus on rebuilding your financial future.

Business Bankruptcy

Corporations, Limited Liability companies and Partnerships are legal entities separate from their shareholders or partners.  The Entities can file Chapter 7 Bankruptcy or Chapter 11 Bankruptcy as a business.  An individual who owns a business as a sole proprietor must file bankruptcy as an individual, not as a business.  This is because the assets and liabilities of the business are really just one form of assets and liabilities of the individual proprietor.  The individual owner may file Chapter 7, Chapter 11 or Chapter 13 Bankruptcy.

Bankruptcy FAQs