(530) 891-6222

Office Location

Chico Office
Law Office of Kendal E. Cornell
Sandpiper Building
686 Rio Lindo Avenue
Chico, CA 95926
Tel (530) 891-6222
Fax (530) 893-8245

Bankruptcy

Kendal E. Cornell Law is a Law Corporation Specializing in Bankruptcy as well as Estate & Property Planning, Trusts, and Wills & Probate

If you are in financial trouble, you are not alone. Each year over a million Americans file bankruptcy. At the Law Office of Kendal E. Cornell we have helped families and small businesses just like you find the legal solutions they needed to put their finances and their lives back on track.

If you are contemplating bankruptcy, we know that you have plenty of questions. Perhaps, right now, you may be too embarrassed to personally pick up the phone and ask for help. We understand that. For that reason, we have listed some of the more common questions that are frequently asked by clients along with a brief answer. The answers to these questions are general and may not fit your specific situation.

Feel free to call our office to set up a personal consultation with an attorney at no charge. Remember, you will always be treated with respect and dignity.

Law Office of Kendal E. Cornell
Chico Office: (530) 891-6222

For Online Inquiry, please fill out the Contact Information Form.

Why call the Law Offices of Kendal E. Cornell?

At the Law Offices of Kendal E. Cornell you will be treated with respect and dignity regardless of your financial situation. We give you the personal attention necessary with an open line of communication with us. We take the time to understand each situation and then quickly act, taking all steps necessary to protect your interests.

We have been filing Bankruptcies for clients for over 29 years. When bankruptcy is imminent, there are numerous issues involved, some of them legally complex and some of them emotionally difficult. We become your advocate.

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Do I have to use an attorney to go bankrupt?

No. However, bankruptcy is complex. A bankruptcy lawyer is well worth the cost. You will save the cost of the legal fees many times over through peace of mind, relief of stress and probably actual money saved in following your bankruptcy attorney’s advice.

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What is bankruptcy?

Bankruptcy is a federal legal process for debt management available to most individuals and businesses. Successfully completing a bankruptcy case allows individuals and businesses to either eliminate or reorganize most of their debt. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court.

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What are the major changes to filing for bankruptcy that went into effect under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005?

The Bankruptcy Abuse Prevention and Consumer Protect Act of 2005 that went into effect on October 17, 2005, added new requirements for both Debtors and Attorneys. However, the new law still allows debtors to obtain financial relief and the fresh start that they need.

Prior to filing bankruptcy: You must receive credit counseling and obtain a certificate stating that you have done so prior to filing a bankruptcy.

The bankruptcy process: More documentation regarding income and taxes is mandatory. Perhaps the most misunderstood new requirement is the "means test". The means test is a formula by which a determination is made based on household income and expenses whether a debtor is qualified to file a Chapter 7 bankruptcy or whether a reorganization under Chapter 13 is required.

After filing bankruptcy: You must complete a mandatory debtor education course in personal financial management as approved by the U.S. Trustee. You must choose your counseling provider from a list provided by the court or the U.S. Trustee. Providers will probably charge a fee for these services.

To schedule a free, no obligation consultation, call us now at our Chico office, (530) 891-6222.

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What can bankruptcy do for me?

Bankruptcy can give you a fresh start. It will stop nagging creditor calls, foreclosures, auto repossession, wage garnishment and potentially resolve IRS debt.

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What can bankruptcy NOT do?

Bankruptcy cannot, however, cure every financial problem, nor is it the right step for every individual. In bankruptcy, it is usually not possible to:
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What is a Chapter 7 bankruptcy?

Chapter 7 is known as "liquidation". In a bankruptcy case under Chapter 7, you file a petition asking the court to discharge your debts. The basic idea in a Chapter 7 bankruptcy is to wipe out (discharge) your unsecured debts in exchange for your giving up certain property which exceeds certain limits called "exemptions". "Exempt" property is property which the law allows you to keep when you file bankruptcy. In most cases, all of your property will be exempt (see What Property Can I Keep, below). But property which is not exempt is sold, with the money distributed to creditors. If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, a Chapter 7 case probably will not be the right choice for you. That is because Chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt. A Chapter 7 may be filed individually or by a married couple filing jointly.

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What is a Chapter 13 bankruptcy?

Chapter 13 is called "reorganization". In a Chapter 13 case, you are required to make one monthly payment to the Chapter 13 Trustee to repay some portion of the debt you have. You file a "plan" that shows how you will pay off some of your past due and current debts over a three to five year period. A Chapter 13 may be filed individually or by a married couple filing jointly.

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Do spouses have to file bankruptcy together?

No, spouses may file jointly or individually or not at all.

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Will nagging creditors continue to call?

Once your bankruptcy is filed, your creditors are required to stop contacting you. From that point on, creditors will contact us for a status of your situation. In addition, if creditors have broken the law in the course of attempting to collect a debt from you, we will pursue remedies that may entitle you to receive compensation as a result of the violation – at no cost to you.

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What property can I keep in California?

Typically, property which can be kept and protected while in a bankruptcy includes your homestead, your vehicles, household furnishings and personal effects, jewelry, health aids, tools of the trade, life insurance, personal injury claims, retirement accounts and packages, bank accounts to a certain amount, and other types of miscellaneous property. The typical individual filing for bankruptcy is able to protect ALL of their property by using these protections. Each case is different and must be analyzed by an attorney. That is why we recommend making an appointment with us by calling our office now.

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Will I lose my home or car if I file bankruptcy?

In a Chapter 7, if you want to keep your home or car, you must be current on your mortgage and car payments. If your equity in the property is fully exempt, then you may keep your home or car as long as you continue to make the monthly payments required. In reality, equity is measured after accounting for the cost of sale (e.g., realtors and fix up costs).

If you are not current on your home or car payments, or if you have too much equity, you may still be able to keep your car and home by filing a Chapter 13. On the other hand, if you wish to surrender your car or home, you may do so without being liable for any more money.

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Can I own anything after bankruptcy?

Yes! Many people believe they cannot own anything for a period of time after filing for bankruptcy. This is not true. You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after filing for bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.

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Who will know that I went bankrupt?

Bankruptcy filings are public records. However, under normal circumstances, no one will know you went bankrupt. It is not published in the local newspapers. The Credit Bureaus will record your bankruptcy, and it will remain on your credit record for 10 years.

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Will bankruptcy affect my credit?

The fact that you’ve filed a bankruptcy can appear on your credit record for up to ten years. However, if you are behind on your bills, your credit may already be damaged. Bankruptcy will probably not make things any worse. But, since bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit.

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Once my bankruptcy is discharged, how long will it be before I can apply for a mortgage or credit card?

Bankruptcy stays on your credit report for up to 10 years. It becomes less significant the further in the past the bankruptcy is. The truth is that you are probably a better credit risk after bankruptcy than before.

A number of banks now offer ‘secured’ credit cards where a debtor puts up a certain amount of money in an account at the bank to guarantee payment. Under current underwriting standards, two years after a bankruptcy discharge debtors are eligible for mortgage loans on terms as good as those of others with the same financial profile who have not filed bankruptcy. The size of your down payment along with the stability of your income will be much more important than the fact you filed bankruptcy in the past.

We hope that we have answered some of your questions. If you would like more information or wish to set up a free initial consultation with an attorney, you may call our office noted below.

Law Office of Kendal E. Cornell
Chico Office: (530) 891-6222

For Online Inquiry, please fill out the Contact Information Form.

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