If I go bankrupt, do the people I owe get my future earnings?

Question

If somebody sues me, wins, and I don't have enough assets to pay them, do they get my future earnings? I live in California.

Answer 1

If you file bankruptcy, you can file either of two types. Chapter 7 wipes out your debts, using any assets to pay your creditors. Chapter 13 bankruptcy requires you to make payments of your disposable income for a period of time, but with a minimum of 36 months (unless the debt is completely paid before the 36 months is over).

The bankruptcy laws were changed last year, and now it is harder to qualify for a chapter 7 bankruptcy.

You are allowed to keep a certain amount of assets under bankruptcy under the exemptions allowed for each state. In California, the exemptions are can be found at;
http://www.ca-bankruptcy-attorneys.com/california_exemption_chart.html

Not all debt can be discharged in bankruptcy. You cannot discharge federal student loans, most taxes (unless of a certain age), child support, and debts owed as a result of a criminal charge. For example, if you caused damages as a result of a DUI, and were sued, you would not be able to discharge that debt.

You should consult with several bankruptcy attorneys to see if this is the right choice for your situation. The initial consultation should be free. If you file chapter 13, the attorney fees can be included in your bankruptcy payment. You need to hire an attorney who does nothing except bankruptcy law. You want someone who knows all the rules. Someone who just does bankruptcy on the side will not know all the changes in the law and how those laws are supposed to work.

You can find a lot of very accurate information at http://www.bklaw.com/california_bankruptcy/

Answer 2

Most of these people do not know what they are talking about. You have to qualify under new laws, but they are fairly liberal. Figure you qualify (most people do) Chapter 7 wipes it all off the books, you can only do this every 8 years. Chapter 13 means you will pay pennies on the dollar for generally 5 years There are other chapters also for reorginization, or if you are a farmer.. Once you file creditors by law can not take any action againest you. They can not phone you, garnish pay nothing. Period. If you die it all goes away and your family pays 0 period out of space

Answer 3

it depends on the type of bankruptsy you file for. A chapter 7 is commonly refered to as a wipe out. All the unsecured debt you have, in most cases, is ordered uncollectable, a chapter 13 is where a repayment plan and a trustee is assigned to take the money from your paycheck or income, at a certain rate, and apply it toward your debts. It can be to pay the debt in full, or it could be to repay 70% of that debt, leaving the remainer ordered uncollectable by the court. This means that they can not pursue you to collect it ever again, unless you contact them and make arrangement to pay the money you owed. If you re enter into contract with the creditor again for the amount you filed bankruptsy against, you again will be obligated to repay that money.

Answer 4

The laws are changing. If you are eligible and do file then you are debt free as of the settlement date. But you could lose everything you have in the process.

Prior creditors cannot go after future earnings after you file bankruptcy. Alimony, child support and other such debts typically remain in place.

This path is not to be taken lightly. It will ruin your credit for many years. Work with a reputable lawyer who specializes in this area.

Answer 5

There are certain types of debts that cannot be extinguished by a bankruptcy. Usually that includes judgments obtained in courts of law. The best way to find out would be to contact a lawyer in your area who specializes in bankruptcy. Describe what you are trying to do and ask if it will work.

Answer 6

make sure the entire lawsuit amount is in the bankruptcy, better too much than too little, try to file before they win...although it probably won't make a big difference, you may have to pay 25 cents or so on a dollar, depending on your circumstances you may have to pay
$0. if you die the debt won't go to your family, it would go to your estate, the best way to beat that is to leave a beneficiary on any bank accounts...this would avoid probate.

Answer 7

Yes. If you are bankrupt and pass away, the cost is transferred to the next of kin; so if you are sued for a million dollars and pay only $1 of it, then the rest go to your family/children.

Answer 8

You need to talk to an attorney before you file for bankruptcy. The laws have changed, and I do believe this is possible now.

Answer 9

Yes they can go after you paychecks later. The laws for bankruptcy has changed so check with you lawyer.

Answer 10

Depends on how you file and structure your bankruptcy.
Only an attorney that is familiar with your state laws can tell you.