What happened recently in a California bankruptcy court case is a good reminder of why it is so important to choose the right legal team for your bankruptcy case. A bankruptcy is a complicated legal tool used to relieve the stresses associated with difficult financial situations, and because of its complexity, the right attorney needs to be chosen.  

The case referred to, In re Bark, involved a couple who filed for chapter 7 bankruptcy protection in 2012. After successfully suing for protection, a discharge was granted to the couple over their debts, and they received the relief they needed.   

Fast forward to 2018, and the couple began to experience more financial troubles. Those troubles began when their home was foreclosed upon and sold to an investment firm. Soon after this, the couple was notified that because of foreclosure, they had to vacate their property. This led them to turn again to the bankruptcy court for protection.

Automatic Stay Does Not Apply

The couple petitioned the bankruptcy court and asked it to put a stay on the foreclosure as it was the same home they were living in when they received a discharge of their debts in 2012. After some back and forth and renewed motions, the court finally ruled that the relief they sought was not available.

When the couple received their discharge in 2012, it was for their personal liabilities, meaning the debts into which they had personally contracted. This did not transfer to the land and home where they lived, as those are real property, and real property cannot have the debt discharged in a chapter 7 bankruptcy.  

Because the debt connected to the home was not discharged in 2012, the automatic stay could not prevent a foreclosure on the property itself. The automatic stay provision of the U.S. Bankruptcy Code is one of the most important tools available to a debtor. Essentially, it prevents any debt collector from collecting a debt while a bankruptcy case is pending.  

Choosing the Right Legal Team for Your Bankruptcy

The right legal team to facilitate your bankruptcy is one that is familiar with all the provisions of the bankruptcy laws in our country, and those arising out of California state law. Choosing the right bankruptcy legal team will be one of the most important decisions you make because it will inform, as it did in this case, the options related to property, retirement accounts, student loans, personal debts, and more.

For example, a qualified bankruptcy attorney from California will help you understand what options you have regarding your retirement accounts. There are also options connected to personal vehicles, the homestead you live on, and more. The right legal team will help you understand which chapter is the best option in your situation. If you are facing the choice of filing for a bankruptcy in California, contact us. At The Bankruptcy Law Center we will point you in the right direction and provide you with all the tools and help you need. Contact us today.

(image courtesy of Christopher Harris)