Thomas B. Hjerpe, Esq.

Kenneth J. Collins, Esq.

Jocelyn M. Godniho, Esq.

Catherine M. Koshkin, Esq.

Of Counsel

350 E Street, First Floor

Eureka, CA  95501

Telephone:  707 442-7262

Law Office of

Hjerpe & Collins LLP

We are a debt relief agency.  We help people to file for bankruptcy relief under the Bankruptcy Code

BANKRUPTCY

A bankruptcy is a powerful tool that will stop lawsuits, foreclosures, wage garnishments, repossessions, telephone calls and virtually all other collection powers.  A bankruptcy will eliminate credit card debts, medical debts and the remaining debts after repossessions and foreclosures.  Bankruptcy can also eliminate certain tax debts.  A Chapter 13 bankruptcy can be used to save a home in foreclosure, restructure vehicle loans, repay credit card debts and even remove 2nd mortgages.


Debts: Generally, the bankruptcy code divides debts into three categories: Secured, priority and unsecured.


Secured debts: Secured debts are ones where there is collateral for the loan. A car loan is your most frequent example.  Where you have a secured debt, if you want to keep the collateral you must continue making the regular monthly payments.  If you are content with surrendering the collateral, you will be able to eliminate the remaining liability on the debt if you file a bankruptcy.


Priority debts: Priority debts cannot be eliminated in bankruptcy. Many types of tax debts are priority debts in bankruptcy. Court fines cannot be eliminated. Child support cannot be eliminated.


Unsecured debts: Unsecured debts are ones where there is no collateral and the debt is not considered a priority debt. Almost all unsecured debts can be eliminated in a bankruptcy.  Examples are credit cards, medical debts, unsecured bank loans, personal loans, phone bills, remaining debts to landlords after surrender of the property, remaining debts to car lenders after repossession, debts to suppliers after closing a business, etc.. The one debt that is included in this category that cannot be eliminated in bankruptcy is student loans.


Assets: You can often protect all of your assets in a bankruptcy. If the asset is collateral for a debt, then you must pay the debt to retain the asset.  You will have protections for virtually all household goods and furnishings, retirement accounts and most ordinary vehicles  You may also have protection for cash, savings, income tax refunds, etc..  With these protections, most individuals can preserve all assets in a bankruptcy.  If you have an asset that is not protected, the asset will either be taken, sold and the proceeds divided pro-rata among creditors in a Chapter 7 bankruptcy or their value becomes the basis of what you must pay to your creditors through a Chapter 13 bankruptcy.


Chapter 7 Bankruptcy: A Chapter 7 Bankruptcy is a quick and simple means of eliminating credit card debt, medical debt, persona loans and the remaining debts after foreclosures or repossessions.  Some debts either cannot be eliminated or are difficult to eliminate, such as student loans, support arrears and tax debts. Debts secured with collateral, such as mortgage loans and vehicle loans, must be paid if you want to retain the collateral.  Unprotected assets are sold and the proceeds are divided pro-rata among creditors.


Chapter 13 Bankruptcy: Another type of bankruptcy is a Chapter 13 payment plan bankruptcy. The Chapter 13 bankruptcy is designed for someone who has regular monthly income and who has some excess income after paying necessary living expenses. The Chapter 13 allows that person to pay their excess to creditors for a period of 5 years. Thereafter the remaining unpaid debts are eliminated.  It is very common to use a Chapter 13 Bankruptcy to stop a foreclosure and to set-up a 5-year plan to get current on mortgage payments.  A Chapter 13 Bankruptcy may also be used to restructure vehicle loans.  If you have assets that would be unprotected in a Chapter 7 Bankruptcy you will be allowed to retain the assets in a Chapter 13 Bankruptcy so long as you pay the value of unprotected assets to creditors.  In some cases it is even possible to remove and eliminate a 2nd mortgage.  


Info Needed Chapter 7 Chapter 13