FAQs

Which type of bankruptcy should I use?

If you meet the eligibility requirements for both types of bankruptcy, then you can choose the type of bankruptcy that makes the most sense for your situation. However, you may not have a choice.

Under the new bankruptcy law, filers whose incomes are higher than the median income for a family of their size in their state may not be allowed to file for Chapter 7 bankruptcy if their disposable income, after subtracting certain allowed expenses and required debt payments, would allow them to pay back some portion of the unsecured debt over a five-year repayment period.

Also, if you have secured debts of more than $1,010,650 and unsecured debts of more than $336,900, for example, then you cannot use Chapter 13 bankruptcy.

Most people who file for bankruptcy choose to use Chapter 7, if they meet the eligibility requirements; Chapter 7 is a popular choice because, unlike Chapter 13, it doesn't require filers to pay back any portion of their debts.

However, Chapter 13 might be a better choice, depending on your situation. For example, if you are behind on your mortgage and want to keep your house, you can include your missed payments in your Chapter 13 plan and repay them over time. In Chapter 7, you would have to make up the whole past due amount right away -- and you might lose your house, if your equity exceeds the exemption amount available to you. For more on situations when Chapter 13 makes sense, seeReasons to Use Chapter 13 Bankruptcy Instead of Chapter 7 Bankruptcy.

In Chapter 7 bankruptcy, you ask the bankruptcy court to discharge most of the debts you owe. In exchange for this discharge, the bankruptcy trustee can take any property you own that is not exempt from collection (see below), sell it, and distribute the proceeds to your creditors.

In Chapter 13 bankruptcy, you file a repayment plan with the bankruptcy court to pay back all or a portion of your debts over time. The amount you'll have to repay depends on how much you earn, the amount and types of debt you owe, and how much property you own.

You lose no property in Chapter 13 bankruptcy, because you fund your repayment plan through your income. In Chapter 7 bankruptcy, you select property you are eligible to keep from a list of state exemptions. Although state exemption laws differ, states typically allow you to keep these types of property in a Chapter 7 bankruptcy:

• Equity in your home, called a homestead exemption. Under the Bankruptcy Code, you can exempt up to $20,200 of equity. Some states have no homestead exemption; others allow debtors to protect all or most of the equity in their home.
• Insurance. You usually get to keep the cash value of your policies.
• Retirement plans. Most retirement benefits are protected in bankruptcy.
• Personal property. You'll be able to keep most household goods, furniture, furnishings, clothing (other than furs), appliances, books and musical instruments. You may be able to keep jewelry only worth up to $1,000 or so. Most states let you keep a vehicle as long as your equity doesn't exceed several thousand dollars. And many states give you a "wild card" amount of money -- often $1,000 or more -- that you can apply toward any property.
• Public benefits. All public benefits, such as welfare, Social Security, and unemployment insurance, are fully protected.
• Tools used on your job. You'll probably be able to keep up to a few thousand dollars worth of the tools used in your trade or profession.
  
  

Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as "liquidation" (Chapter 7) or "reorganization" (Chapter 13). Under a Chapter 7 bankruptcy, you ask the bankruptcy court to wipe out (discharge) the debts you owe. Under a Chapter 13 bankruptcy, you file a plan with the bankruptcy court proposing how you will repay your creditors. You must repay some debts in full; others may be repaid only partially or not at all, depending on what you can afford.

When you file either kind of bankruptcy, a court order called an "automatic stay" goes into effect. The automatic stay prohibits most creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.

Certain debts cannot be discharged in bankruptcy; you will continue to owe them just as if you had never filed for bankruptcy. These debts include back child support, alimony, and certain kinds of tax debts. Student loans will not be discharged unless you can show that repaying the debt would be an undue burden, which is a very tough standard to meet. And other types of debts might not be discharged if a creditor convinces the court that the debt should survive your bankruptcy.

A mortgage lender can't foreclose on a house owned by military personnel on active duty unless the lender seeks special permission from the court.

Most renters will lose their leases upon foreclosure. The rule in most states is that if the mortgage was recorded before the lease was signed, the lease will be wiped out when a foreclosure occurs. That doesn't mean a renter will have to leave immediately -- but those who remain in the rental join the ranks of month-to-month renters, all of whom can be terminated with proper notice -- usually 30 days, but 60 days in California. The new owner (usually the lender) may or may not move quickly to terminate the rental.

With a deed in lieu of foreclosure, you give your home to the lender (the "deed"), and in exchange, the lender cancels the loan rather than foreclosing on the property. In most states, a lender is allowed to sue you to recover any remaining deficiency—the difference between what the lender can sell the house for and what you owed on the mortgage. Before you agree to a deed in lieu of foreclosure, make sure that the lender agrees, in writing, to forgive any deficiency that exists. Deeds in lieu of foreclosure are not possible if there is a second mortgage, unless the same lender owns both loans.

Bankruptcy can delay a foreclosure, but won’t stop it permanently. Here’s how it works: When you file bankruptcy, the court automatically issues an "automatic stay." The automatic stay directs your creditors to cease all collection activities and foreclosures immediately. If your home is scheduled for a foreclosure sale, the sale will be postponed while the bankruptcy is pending -- typically for three to four months.

However, if your lender obtains the bankruptcy court's permission to proceed with the sale (by filing a "motion to lift the stay"), the sale may be allowed to go forward after a couple of months. But during a Chapter 7 bankruptcy, you can live in your home for free for several months while your bankruptcy is pending. You can then use that money to help secure new shelter.

If the sales price you are offered falls short of the amount you owe the lender -- called a "short sale" -- you need to get permission from your lender. This is because in most states, technically a lender is allowed to sue you after the house is sold (or foreclosed on) to recover any remaining deficiency -- the difference between the sales price and what you owe on the mortgage. In most cases, however, a lender is not likely to sue for a deficiency.

If you live in a state that doesn’t allow a lender to sue you for a deficiency, you don’t need to arrange for a short sale. In this case, if the sale proceeds fall short of your loan, the lender can’t do anything about it.

Short sales usually aren't possible if there is a second mortgage, unless the same lender owns both loans. Also, some homeowners may be better off letting a foreclosure take place, saving a few month's mortgage payments until it happens.

Your lender may modify your loan if you have an adjustable rate mortgage or if you are several months behind on your mortgage. Call and ask to speak to your lender’s loan modification or loss mitigation department. The lender may accept partial payments for a few months (though you may have to agree to make up the difference later), accept a late payment, or agree to modify the terms of your loan.

There are several plans offered by the federal government to help homeowners avoid foreclosures, including FHASecure and Hope for Homeowners. The most recent program to be announced is the Homeowner Affordability and Stability Plan, which is aimed at helping homeowners refinance their mortgages to lower their mortgage payments. Homeowners might qualify for a refinance at a 15- or 30-year fixed-market-interest-rate (currently around 5%).

This plan would ease the rules so that homeowners whose loans are owned or guaranteed by the Fannie Mae and Freddie Mac could have a chance to refinance even if they have little or no equity in their home. A separate part of the plan would bring mortgage payments down for some homeowners to a total of 31% of their gross income. Both parts of the plan would apply only to homeowners with conforming loans.

You should also call your credit card company, and see if your credit card company offers any coverage for a rental car, if you use that credit card to pay for the rental (you may be eligible to be reimbursed for this charge by the at-fault insurance company).

You are entitled to the use of a car or truck of “comparable worth and value”, or “equivalent make and model to your own car”, for the reasonable amount of time that it takes to either repair or replace your car. The insurance company for the at-fault driver (and sometimes your own company) may try to fight you on some or all of these rental car issues. For this reason, it is important to have an attorney on your side who knows the law, and knows what you are entitled to.

The Law Offices of Adam Sorrells is especially sensitive to his clients who suddenly find themselves without a car. If you cannot drive to work, to doctors appointments, to pick up the kids or a spouse, somebody's entire life can grind to a halt. For this reason, if we accept your personal injury case, we will help with your rental car and car repair for free!

The aftermath of an automobile accident can be a very scary experience. Many people are scared, uncertain, and stressed out. This is one of those times when you hope you have good insurance, and you need a lawyer who understands your rights, and what you are entitled to.

If your car was not drive-able after an accident, it may be towed away to a tow yard (to clear the city streets). It may be taken to a storage facility, and stored there until you tell the storage company what to do with the vehicle. You are often responsible for arranging to move the vehicle from the tow or storage yard, and you can be liable for a daily “storage fee” for each day your vehicle is stored, plus the cost for the tow-truck.

The insurance company for the person who caused the accident (and sometimes your own insurance company) is usually responsible for the payment of towing and storage fees, but only if you demand it. They will also refuse to cover the storage if they deem you waited too long, and the storage bill is too high. This is one reason to contact an attorney right away.

You should take your car (or have it towed) to a body shop immediately, and get a free estimate of the cost to repair your car. You do not need three estimates, but it can be helpful to get more than one. It is ok to let the insurance companies inspect your car, and take pictures, but you should not give the at-fault insurance company a recorded interview statement, or speak to them about the accident, or your injuries, until you have contacted and met with an attorney who can advise you further. You should take pictures of your car, and your injuries.

You may choose whatever body shop or repair facility you want, but you should make sure they are reputable, licensed, and insured. Sometimes a body shop is “certified” by your insurance company, or the at-fault driver's insurance company. You do not need to use that facility, but sometimes it is easier and faster to obtain approval from the insurance company to fix your vehicle if a body shop is “certified”.

Since the insurance company may be responsible for payment of the bill, they are always in favor of lower estimates. Be careful, because a lower estimate could overlook important parts that have been damaged in the accident, such as proper alignment, matching paint or fenders, headlight adjustment, and other unseen damage. Also, the Law Offices of Adam Sorrells suggests you demand “certified factory parts”. For example, if your car is a Ford, you should demand Ford parts. If you do not specify, your car will surely be fixed with after-market parts, which are cheaper for the insurance company, but are not as good, and likely do not fit your car as well as those made by the original manufacturer of your vehicle.

After choosing your mechanic or body shop, and agreeing with them as to the type of work to be done, you can then present the insurance company with the estimate. The insurance company may then try to negotiate a lower price with your mechanic. That is ok, as long as the job is done correctly.

The Law Offices of Adam Sorrells , if they have agreed to represent you for your personal injuries, will help you with the repair or replacement process for free, as a courtesy to a new client!

As explained above, a total loss means the repair cost to fix your car, is higher than the “ fair market value” for your car. If your vehicle is determined to be a “total”, or “total loss”, the vehicle will usually not be repaired, and instead you will have to find a new or different car to replace the vehicle that was totaled. Some clients will keep their totaled car, take the money that represents the “fair market value” for their car, and try to repair the vehicle themselves. The Law Offices of Adam Sorrells does not recommend doing this, although some “handy types” that are good with cars prefer it; if, for example, they were attached to the damaged car. You should be aware that if you keep a car that was declared a “total loss”, this will be reported to the California Department of Motor Vehicles (DMV), and your car will have a “ salvaged title ”. A salvaged title tells anybody you later try to sell the vehicle to, that it was previously considered a “total loss”, but you decided to fix the vehicle anyway.

Some cars are easy to put a value on, and some are not. Unfortunately, the law is stacked against you when it comes to replacing your car. The term “fair market value” means what it will cost to replace that car on the “open market”. The insurance company will offer to reimburse you for the “fair market value” for your car. This figure will often be much less than the purchase price of the vehicle, or what you think it is worth. The insurance company will deduct for (a) depreciation of the vehicle; (b) high mileage; (c) less than perfect condition; (d) any dents or pre-existing damage; (e) will not reimburse you for finance charges; (e) and will not consider (or will try not to include) custom or aftermarket parts.

If you have just paid money for new tires, engine, brakes, etc., they will not consider these items, as the car is assumed to have working tires, engine, brakes, etc.

It is often impossible or very difficult to replace your car with the money they want to offer you. This is one reason why it is important to have an attorney who is knowledgeable in the complexities of auto accident law, and insurance issues. We are often able to get the insurance companies to offer more money based on negotiating techniques, knowledge of the law, and our expertise.

An excellent resource is the Kelly Blue Book (KBB.com). Be sure to accurately input the correct options, mileage, etc for your vehicle, and choose the “private party” option. (The other options are wholesale, which is what a dealership would pay you for your vehicle, or retail, what a dealership would sell your vehicle for, after they clean and inspect it). There are other sources as well, such as the Auto Trader, Edmonds, etc.

In my experience, the insurance companies do not use the Kelly Blue Book. Instead, they use their own software program to determine the vehicle's value. Not surprisingly, the insurance company software often comes in lower than the Kelly Blue Book, or other aftermarket sources for evaluating vehicles. The insurance companies software is supposed to have found several “similar” vehicles for sale in the local area, for the price they are offering. They are often not able to prove this when we demand to know where they found an allegedly “similar vehicle”, or the similar vehicle is in Arizona, Texas, etc. This is another reason to have an attorney who knows these issues, and can help you with them.

Most communities have leash laws that require owners to have their dog on a leash unless the dog is confined to the house or fenced yard. If a dog bites somebody and his owner did not comply with the leash law, the penalties may be increased, or this can be an additional way we can prove your injury case against the dog owner.

Pit Bulls can be very dangerous, and get a lot of press. However, at least 25 different dog breeds have been responsible for dog-bite-related fatalities; although many of those fatalities were caused by Pit Bulls, other breeds like Rottweilers, German Shepherds, Huskies, Rhodesian Ridgebacks, Akitas, and other large powerful breeds have also bitten and killed people. Many people are also bitten by Golden Retrievers and Labrador Retrievers, largely because of the popularity of these dogs, and their prevalence in many households. Small dogs can also cause serious injuries, especially to small children.

It is impossible to state an average personal injury settlement for a dog bite case, because each case is so different. Your case will be evaluated individually, and will consist of the facts of your case, the extent of the injuries and affect on your life, the amounts of your medical bills, wage loss, and the injuries to the person, called “pain and suffering”. Plastic surgery costs, psychological counseling, and other factors may also be part of your case. Our job will be to get you the best settlement possible; and if the case goes to trial, to prepare the case to obtain the best possible verdict.

Some studies have shown that nearly 2% of the American Public is bitten by a dog each year. That amounts to millions of people bitten every year, with as many as 800,000 or more injured seriously enough to require medical attention.

Animal bites can have serious consequences to you and your family. The financial and social consequences can be severe. The byzantine maze of dealing with an insurance company, different laws, your own medical or health insurance, Medi-Cal, Medi-Care, and other factors make it a mistake to try and deal with this situation on your own. It is important that you seek medical attention as soon as possible after a dog bite or animal attack , and then consult an attorney as soon as possible thereafter. A dog bite lawyer is able to tell you whether you should seek legal action against the responsible party, can evaluate your case, and obtain fair compensation for your injuries.

Yes. The attack should be reported to your local animal control center and/or police department. Please take a business card or other contact information from the officer you speak with. The animal may need to be quarantined, and the Animal Control Office can help determine if the animal has been vaccinated against Rabies. If you do not find this out, you may need to undergo a series of potentially painful rabies shots.

Yes, if possible. Please take photos of your injuries, the scene, and the attacking dog. If there is a hole in owner's fence that the dog escaped from before the bite, for example, take pictures of that as well. Please do not take photos of the dog or any other area, if it will expose you to danger, another bite from the dog, or retaliation from the property owner. Only take photos if it is safe to do so.

As stated above, under California Law, dog owners are liable for money damages for injuries resulting from dog bites and dog attacks. The law covers anyone bitten by a dog in a public place or while lawfully in a private place, including the dog owner's property. Contrary to popular belief, in California, there is no “ one free bite rule ”. This means that we can recover money damages for you whether or not the dog has a previous history of prior bites or attacks.

Each case is unique, and depends on a variety of factors. If your injury heals rather quickly, and you return to work quickly, that case can be completed start to finish in several months. However, if your injuries are more severe, it will take longer for the injuries to heal. Smart personal injury lawyers and dog bite attorneys will not settle your case until after you have healed from your injuries. This is because your attorney needs to know the full extent of your injuries before your case is settled. That way your attorney will know the full amount of your medical bills, time missed from work, affect on your life, and whether or not future medical care will be needed. If your injuries resulted in severe wounds that turn into scars, it can take six to nine months before we can send you to a plastic surgeon to evaluate the extent of permanent scars, and the cost of scar revision. For all of these reasons, there is no fixed time limit for how long your case might take. However, the Law Offices of Adam Sorrells understands that nobody wants a lengthy legal case, if it can be helped. Our goes is always to get you the best possible settlement, in the shortest time possible.