Los Angeles bankruptcy attorneys know that the whole process of filing for a bankruptcy in L.A. can be intimidating and complex.
There is a lot of specific paperwork that has to be filed in a very specific way. It has to all be done according to set deadlines, and the wording has to be exact in order for you to get the most out of it - and prevent the case from being tossed.
That's apparently what happened with Nadya Suleman, better known as "Octomom." As the single mother of 15 children, she has been fighting to stave off foreclosure of her home in La Habra. To do so, she filed a Chapter 7 bankruptcy.
First of all, what's important to note is that for someone who is trying to keep their home, Chapter 7 may not be the best option. That's because this type of bankruptcy seeks to liquidate almost all assets and erase the debt (or the debt that is eligible, anyway).
A better option for someone trying to hang onto their house might be Chapter 13, which is essentially a payment plan that will allow you to keep more of your assets. This is particularly true if equity remains.
Secondly, Suleman apparently tried to save money by filing for the bankruptcy herself. Now on the surface, this might seem like a smart thing to do, right? Bankruptcies are going to cost you up-front, out-of-pocket. If you're already broke, who can afford the extra expense?
The problem is that if you don't file it properly, not only is the bankruptcy likely to be thrown out (which means you've wasted all that time anyway), it's also possible that you may be barred from re-filing for a certain period of time. That means you could be stuck without relief for even longer.
Hiring an experienced Los Angeles bankruptcy attorney is critical.
Suleman reportedly did not include a number of important financial documents that the bankruptcy judge required of her in order to complete the case. The judge indicated that she had time to fix these errors, however did not.
For her, the fact that the bankruptcy has been thrown out also means that the foreclosure of her home may proceed. While a Chapter 7 bankruptcy may not have protected her home in the long-term, it would have bought her some time through what's called an Automatic Stay. The bank wouldn't have been able to act for at least three or four months, giving her some time to figure out what her next move should be.
Her case is somewhat extreme, given that she reports some $1 million in unpaid loans and names more than 20 creditors whom she can't repay. Additionally, she is not able to maintain the payments of her mortgage, her children's tuition or even electric or water bills.
Of course, it does seem everyone is struggling these days. A Los Angeles bankruptcy can help provide a fresh start - assuming you do it right and seek help in filing.
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