Irvine Debt Relief Attorney

Get Effective Debt Relief Assistance in Orange County

If you are struggling with overwhelming debt, you may feel like you are drowning. You may be trying to figure out how you are going to pay your bills, much less make ends meet. You may feel like there is no end in sight to your financial problems.

At The Law Offices of Joseph M. Tosti, APC, we can help you find the relief you need. Our Irvine debt relief lawyer can help you file for bankruptcy, negotiate a settlement with creditors, or help you with any other debt-related legal matter. With over 30 years of experience, we have the knowledge and skill to guide you through the process and help you find the financial freedom you deserve.

Struggling with debt? Get trusted legal help today! Call us at (949) 245-6288 or contact us online for a free consultation.

What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

If you are struggling with debt, you may be wondering whether you should consider filing for bankruptcy. Filing for bankruptcy is a serious decision, and it is important to understand your options before moving forward.

There are two main types of bankruptcy: Chapter 7 and Chapter 13. While both have similar goals, they also have some important differences. It is important to understand these differences so you can find the right option for you.

Exploring Chapter 7 Bankruptcy: Liquidation Process

Chapter 7 bankruptcy is also known as liquidation bankruptcy. If you file for Chapter 7 bankruptcy, your non-exempt assets will be liquidated to pay off your debts. However, there are exemptions in place to protect certain assets, such as your home, car, and certain types of personal property.

Once your debts are paid off, your bankruptcy case will be dismissed, and your debt will be discharged. This means that you will no longer be responsible for paying off those debts. Chapter 7 bankruptcy is typically used by individuals who have a lot of debt but little to no assets.

Chapter 7 bankruptcy is typically faster and less complicated than Chapter 13 bankruptcy. However, the downside is that you may lose some of your assets. If you have little to no assets and a lot of debt, Chapter 7 bankruptcy may be the right option for you.

Understanding Chapter 13 Bankruptcy: Repayment Plans

Chapter 13 bankruptcy is more commonly used by individuals who have a regular income and some assets. With Chapter 13 bankruptcy, an individual will need to file a repayment plan with the court, outlining how they will pay back their creditors over a period of time.

The repayment plan will typically last between three and five years and will require you to make monthly payments to a bankruptcy trustee. The amount of your payment will depend on your income and the types of debts you have.

When you make your payments, the trustee will then pay your creditors. When your plan is completed, your remaining debts will be discharged. Chapter 13 bankruptcy can be complicated and time-consuming, so it is important to work with an experienced attorney to help you file your case and create a solid repayment plan.

Alternatives to Bankruptcy

Bankruptcy isn’t the only way to get out of debt. There are several other options that may work better for your situation.

Debt Settlement vs. Bankruptcy

• Debt settlement allows you to negotiate with creditors to reduce the amount you owe.
• Unlike bankruptcy, debt settlement doesn’t go on your credit report for up to 10 years.
• However, it requires a lump-sum payment or structured settlement plan.

Debt Consolidation Options

• Debt consolidation combines multiple debts into a single loan with a lower interest rate.
• This can make payments more manageable and reduce financial stress.
• Common options include personal loans and balance transfer credit cards.

Credit Counseling & Debt Management Plans

• Credit counseling agencies help you create a plan to pay off debt over time.
• A debt management plan (DMP) allows you to make one monthly payment to the agency, which then distributes funds to your creditors.
• DMPs may lower interest rates and stop late fees, but they take several years to complete.

Loan Modification & Refinancing

• A loan modification changes the terms of your existing loan to make payments more affordable.
• Refinancing allows you to take out a new loan with better terms to replace your current one.
• These options are often used for mortgages, auto loans, and student loans.

How to Stop Creditor Harassment

Being harassed by creditors can be stressful, but you have rights and legal protections.

Understanding Your Rights Under the FDCPA

• The Fair Debt Collection Practices Act (FDCPA) protects consumers from abusive collection tactics.
• Creditors cannot call at odd hours, threaten you, or lie about what you owe.
• You can request that they communicate only through your attorney.

How an Attorney Can Help

• A lawyer can send formal notices to creditors demanding they stop harassment.
• They can also help you negotiate lower payments or defend against lawsuits.
• If creditors violate your rights, you may be able to sue for damages.

Cease and Desist Letters

• You can send a cease and desist letter to demand that a creditor stop contacting you.
• Once they receive it, they can only contact you to confirm they will stop or to notify you of legal action.

An attorney can draft this letter to ensure it is legally sound.

Foreclosure Defense & Mortgage Modification

If you’re at risk of losing your home, there are ways to stop foreclosure and keep your property.

How Bankruptcy Can Help Stop Foreclosure

• Filing for Chapter 13 bankruptcy immediately stops foreclosure through an automatic stay.
• This allows you to catch up on missed payments through a structured repayment plan.
• Chapter 7 may temporarily halt foreclosure, but it doesn’t provide long-term solutions.

Loan Modification Programs

• A loan modification changes your mortgage terms to lower monthly payments.
• Lenders may extend the loan term, reduce interest rates, or roll missed payments into the principal.
• Applying for a modification before foreclosure proceedings begin can improve your chances of approval.

Short Sales vs. Foreclosure

• A short sale allows you to sell your home for less than the mortgage balance with lender approval.
• This can be a better alternative to foreclosure since it has a smaller impact on your credit.
• Foreclosure, on the other hand, results in losing your home and damaging your credit for up to seven years.

If you're struggling with debt or facing foreclosure, an experienced attorney can help you explore your best options. Contact us today for guidance tailored to your situation.

Frequently Asked Questions (FAQ) About Debt Relief & Foreclosure

Will filing for bankruptcy wipe out all of my debts?

• Not necessarily. While bankruptcy can eliminate many types of unsecured debt, such as credit card debt and medical bills, some debts are not dischargeable. These include student loans (except in rare cases), child support, alimony, and certain tax debts.

Can creditors take money from my bank account if I don’t pay?

• Yes, in some cases. If a creditor wins a lawsuit against you, they may be able to garnish your wages or freeze your bank account to collect the debt. However, bankruptcy or debt settlement may help prevent this.

How long does bankruptcy stay on my credit report?

• Chapter 7 bankruptcy stays on your credit report for 10 years.
• Chapter 13 bankruptcy remains for 7 years.
• Chapter 11 bankruptcy, typically used for businesses and high-debt individuals, stays on your credit report for 10 years.

However, you can start rebuilding your credit soon after your case is resolved by making timely payments, using credit responsibly, and monitoring your credit report for improvements.

Can I keep my car if I file for bankruptcy?

• It depends. If your car loan is current and its value is within your state’s exemption limits, you may be able to keep it. In Chapter 13, you can restructure your loan to make payments more affordable.

How do I know if I qualify for Chapter 7 bankruptcy?

• To qualify, you must pass the means test, which compares your income to the median income in your state. If your income is too high, you may need to file for Chapter 13 instead.

Can I stop foreclosure without filing for bankruptcy?

• Yes. Options include negotiating a loan modification, applying for forbearance, or pursuing a short sale. An attorney can help you explore the best solution for your situation.

Will debt settlement affect my credit score?

• Yes. Debt settlement typically lowers your credit score because it involves paying less than the full amount owed. However, it may be a better alternative to bankruptcy in some cases.

How Our Irvine Debt Relief Lawyers Can Assist You

At The Law Offices of Joseph M. Tosti, APC, we understand how overwhelming debt can feel. We can help you find the relief you need in any debt-related matter. Whether you need help filing for bankruptcy, negotiating with creditors, or dealing with mortgage foreclosure, our Irvine debt relief lawyer can help.

Facing foreclosure? Don’t wait—take action now! Call (949) 245-6288 or contact us to explore your options.