I know it is hard to even consider making that first move to call a bankruptcy attorney and make an appointment. People often think that they have to be completely broke in order to consider bankruptcy. However, talking to a bankruptcy attorney sooner rather than later allows you to better understand your options and have a solid plan going forward. Waiting until you are in dire straits often results in rushed planning and possibly lost assets that could have been protected. So, when should you consider talking to a bankruptcy attorney?

Collection agencies are calling and sending notices.

It is easy to get overwhelmed by the amount of collection mail and not open any of it. It is also easy to ignore all of the phone calls coming in. Ignoring the initial collections can result in a lawsuit against you, which can be even harder to deal with.

You were just served with a lawsuit.

A lawsuit is now pending for debt collection. If you have been served with a summons for a lawsuit filed by one of your creditors, you have a limited time to respond to the lawsuit. If you do not respond, the collection firm will likely win a default judgment against you and can then move to garnish your wages and/or bank account or put a lien on your house.

You are relying on credit cards to pay for living expenses.

This is one of the earlier warning signs because it means that your credit card bills are increasing, but you do not have any money to keep up with them. If you are using one credit card to pay another credit card each month, it may be time to consider some long-term planning. Making just the minimum payments on credit cards also ties into this warning sign.

Your mortgage payments are behind or are often paid within the “15-day grace period” each month.

If you are more than a month behind on your mortgage, it can be very difficult to catch-up because most banks will not take your payments until you pay the full amount due – they won’t take partial payments. This often leads to a downward spiral where you are several months behind. Talking to a bankruptcy attorney can help you organize your options for keeping the house, as there may be several strategies that can be used to make your loan current again.

Your wages or bank accounts have been garnished.

Once a creditor obtains a judgment against you, they will start looking for money to pay the judgment. One of the most common ways to do that is to garnish your wages. If you are already having problems making ends meet and then 25% of your paycheck disappears, that is a significant hardship. It is almost always better to talk to a bankruptcy attorney long before your debts get to this stage.

If I call a bankruptcy attorney, does that mean I have to file bankruptcy?

Absolutely not. Part of the first meeting is for us to review your financial situation and discuss all of the options available to you, including non-bankruptcy options. My goal is to outline as many options as possible and explain the pros and cons of each route. The decision to file for bankruptcy will always be yours to make.

Bankruptcy is not a one-size-fits-all proposition, but it is a useful and flexible tool for many different situations if properly planned. If you are struggling to make ends meet and are overwhelmed by debt, please contact me to schedule an appointment.

This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. If you live in Alameda County, Contra Costa County, Santa Clara County, or San Joaquin County and would like to speak with me regarding your situation, please email me at [email protected] or call 925-586-6738.

This question has come up quite a bit lately – is it possible to get rid of traffic tickets by filing bankruptcy?

Unfortunately, the answer is generally no. Traffic tickets are considered a fine payable to a government or municipality, which usually makes them survive a bankruptcy filing. Generally, you will still owe on the traffic tickets after your bankruptcy is over. Many counties accept payment plans or alternative arrangements for fines and fees.

Another way to clear up older traffic tickets is through a recently enacted program in California. The program offers a discount on the fines owed for old traffic tickets. The program runs from January 1, 2012 to June 30, 2012. In order to be eligible, the following conditions must be met:

• Traffic ticket where the amount was due and payable in full before January 1, 2009;
• The last payment was made on or before January 1, 2009;
• No restitution is owed to the victim on any case within the county where the traffic case was filed; and
• No outstanding misdemeanor or felony warrants within the county where the traffic case was filed.

The program allows for a 50% discount on traffic tickets. Parking tickets, DUI, and reckless driving cases are not eligible for the program.

Here are the details on the programs for old traffic tickets in Alameda County and
traffic tickets in Contra Costa County.

This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. To speak with me regarding your situation, please email me at [email protected] or call 925-586-6738.

This guy said he would only charge me $500 to prepare my bankruptcy…

This is something I go over in every initial consultation – you do not have to have an attorney to file for bankruptcy. However, attorneys are the only people who can give you legal advice specific to your situation.

I get quite a few inquiries regarding bankruptcy petition preparers who will “do your bankruptcy” for only $500. What are they actually “doing”? They cannot give you legal advice, appear at your Meeting of Creditors as your attorney, or even tell you how to list your property on your schedules. The only thing a bankruptcy petition preparer can do is type what you tell them to type on a form.

In addition, there are local court rules that often limit how much a non-attorney can charge to prepare your documents. For example, in the Oakland Division (Northern District of California), a non-attorney can charge a maximum of $150 to prepare your documents. The trustee will ask at the Meeting of Creditors how much you paid and I have heard ridiculous amounts – amounts close to what an attorney would charge.

If you do hire a bankruptcy petition preparer, please make sure that he or she follows the requirements for bankruptcy petition preparers:

1. Provide a written contract with a description of their services and total fees.
2. Provide you with written disclosures on the different kinds of bankruptcy and the process.
3. Identify as a debt relief agency under the federal bankruptcy code.
4. Not use the word “legal” or any similar term in any of their advertising or materials.
5. File a disclosure statement with the court that tells the court how much they charged you for bankruptcy petition preparation services.

No matter who you hire to help you with your bankruptcy, make sure that you read through every page of your bankruptcy filing before you sign it. You are signing under penalty of perjury that everything in the documents is accurate and correct to the best of your knowledge.

This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. To speak with me regarding your situation, please email me at [email protected] or call 925-586-6738.

Even considering filing for bankruptcy can be a very stressful time in anyone’s life. It’s hard to think about the process and what the consequences might be. The Institute for Financial Literacy just released a new study on who is filing for bankruptcy these days and I thought you might find some of the results interesting (and possibly reassuring). These statistics are for 2010 filings and the report has information for 2006-2010.

Age of Debtor
1.33% 18-24 years old
15.44% 25-34 years old
27.54% 35-44 years old
28.45% 45-54 years old
18.12% 55-64 years old
9.12% 65 years or older

From my experience, many who are 45 years are older are struggling with unemployment, medical bills, and lack of retirement savings. This group does not have a budgeting problem, but probably used credit cards to pay for living expenses while looking for a job, so high credit card balances may also be causing difficulties. In addition, many people are facing foreclosure or have multiple mortgages on underwater homes that bankruptcy can help with obtaining a better outcome.

Education Level of Debtor

6.73% Graduate Level
13.58% Bachelor’s Level
8.82% Associate’s Level
28.73% Some College Level
36.27% High School/GED Level
5.38% Primary School Level


The interesting part of these statistics is the change from 2006 to 2010. Higher educated debtors have dramatically increased as a percentage of bankruptcy filings, while those with some college or a high school diploma have decreased as a percentage of bankruptcy filings. I think we are seeing the effect of unemployment for those with degrees, in addition to high student loan debt impacting who files for bankruptcy.

Income of Debtor
38.18% Less than $20,000/year
21.35% $20,000-$30,000/year
14.67% $30,000-$40,000/year
10.05% $40,000-$50,000/year
6.56% $50,000-$60,000/year
9.18% More than $60,000/year

Again, the interesting statistic here is that the percentage of those filing for bankruptcy who make more than $60,000 has nearly doubled since 2006. This also really depends on where you live. I would say that a majority of people I meet with make over $50,000/year because of the cost of living in Northern California.

Bottom Line
People of all ages, education levels, and incomes are filing for bankruptcy because of the economy, housing values, high student loans, and lack of ability to pay everything off. Bankruptcy is not a one-size-fits-all proposition, but it is a useful and flexible tool for many different situations. If you are struggling to make ends meet and are overwhelmed by debt in California, please contact me to schedule an appointment.

This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are feeling overwhelmed by debt, you should speak with an attorney in your area for legal advice. To speak with me regarding your situation, please email me at [email protected] or call 925-586-6738.