bankruptcy_booksBankruptcy, Financial Restructuring & Collection Defense

The principle behind bankruptcy law is to provide relief to those individuals and businesses that are experiencing financial hardship. A bankruptcy filing allows individuals and businesses time to renegotiate or discharge debts.

Javed Ellahie carries a Martindale-Hubbell AV-rating, the highest rating of legal knowledge and ethics and has been practicing bankruptcy and financial restructuring law since 1977. Mr. Ellahie is a certified bankruptcy law specialist (certified by the State Bar of California, Board of Legal Specialization) and has lectured at bankruptcy law seminars organized by the San Jose Bankruptcy Bar. Mr. Ellahie has also served as a Trustee to the Santa Clara County Bar Association and the West-Valley Mission Community College District.

The enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 significantly amended the bankruptcy laws in the United States. Under the Act, bankruptcy filings have become more difficult and complicated. The Act requires debtors to take financial counseling courses and provide detailed information about their income and expenses prior to the filing of a petition in bankruptcy. The Act also requires those who face financial hardship to proactively seek the assistance of counsel sooner rather than later. It is pertinent that debtors obtain counsel that specializes in bankruptcy and are familiar with the rapidly developing case law under the Act.

Mr. Ellahie's bankruptcy law practice includes representing over 5,000 individuals and sole proprietorships in their bankruptcy matters and providing them relief under Chapters 7, 11 and/or 13 of the Bankruptcy Code.

Mr. Ellahie has also represented individuals and corporations under Chapter 11 of the Bankruptcy Code and has successfully assisted individuals and corporations in their reorganization efforts in Chapter 11 proceedings.

Bankruptcy Options

Bankruptcy may be the best and only way to discharge debts and prevent harassment from creditors. It may be the only way to save a residence and a business from mortgage lenders, secured creditors and even tax collectors.

Chapter 7 is available for individuals or businesses. In the business context, Chapter 7 bankruptcy allows for an orderly liquidation of a business that intends to close down. The trustee takes any assets that he/she believes can be sold and distributes the proceeds among creditors (after paying his/her expenses).

Chapter 13 bankruptcy is available only for individuals and sole proprietorship businesses. The debtor continues in business and proposed a plan for repayment of debts. The payments required depend (to a large extent) on the net worth of the debtor and the amount available to make payments to creditors.

Chapter 11 bankruptcy reorganization is available to individuals whose debts exceed the allowed limits of a Chapter 13 and to corporate and other business entities.

Our attorneys can review all the available options and assist you in making an informed decision about whether filing a bankruptcy is the best course of action.

Collection Defense

We believe that the decision as to whether to file and when to file are the most important matters to be considered in a bankruptcy filing. Sometimes it is better not to file for bankruptcy and do a work out or a liquidation outside the bankruptcy setting. Our attorneys also have considerable experience in resolving secured and unsecured debt through aggressive discovery and motion practice. If you have been served with a Complaint, contact us immediately so that we can evaluate your case and provide cost effective and result driven solutions.

Chapter 7 is available for individuals or businesses. In the business context, Chapter 7 bankruptcy allows for an orderly liquidation of a business that intends to close down. The trustee takes any assets that he/she believes can be sold and distributes the proceeds among creditors (after paying his/her expenses).

Chapter 11 bankruptcy reorganization is available to individuals whose debts exceed the allowed limits of a Chapter 13 and to corporate and other business entities.

Chapter 13 bankruptcy is available only for individuals and sole proprietorship businesses. The debtor continues in business and proposed a plan for repayment of debts. The payments required depend (to a large extent) on the net worth of the debtor and the amount available to make payments to creditors.

We believe that the decision as to whether to file and when to file are the most important matters to be considered in a bankruptcy filing. Sometimes it is better not to file for bankruptcy and do a work out or a liquidation outside the bankruptcy setting. Our attorneys also have considerable experience in resolving secured and unsecured debt through aggressive discovery and motion practice. If you have been served with a Complaint, contact us immediately so that we can evaluate your case and provide cost effective and result driven solutions.

FAQs Bankruptcy

Who can file for a bankruptcy?

A bankruptcy petition can be filed by any individual, married couples or domestic partners can also file joint petitions.

What should I look for in selecting an attorney?

When selecting an attorney, you are looking for someone who specializes in bankruptcy. The State Board of Legal Specialization in California has instituted a certified specialist program that certifies experience attorneys as specialist. This program requires on hand experience and an additional test that the attorney must take to become a certified specialist.

Our founding partner, Javed I. Ellahie is a Certified Bankruptcy specialist and is an active member of the Bankruptcy Bar.  Javed has been practicing bankruptcy law since 1977. You can also find other certified specialist by search the State Bar website at: Certified Specialist in Santa Clara County

Where can I find the forms for filing bankruptcy?

Official Bankruptcy Forms, which are frequently updated are available at the United States Bankruptcy Court website.

What is Credit Counseling?

Consumer debtors must take a Credit Counseling class, available on the internet and by phone, prior to filing bankruptcy. Failure to do so will cause dismissal. Various credit agencies offer this class.  The US Trustee office maintains an updated list of approved Credit Counseling Agencies. Credit counseling rates vary but are around $25.

Consumer debtors are also required to take a financial management class, against available on the internet, after the case is filed. Failure to do so will prevent the debtor from receiving a discharge. These courses are offered by the same agency offering Credit Counseling.

What are the filing fees for Chapters 7, 11 and 13 Bankruptcy?

As of May 1, 2015, Chapter 7 fees are $335, Chapter 11 fees are $1,717, and Chapter 13 fees are $310.  Filing fees change occasionally. For an update and for other fees charged. Updated Filing and Other Fees

Should I file a Chapter 7, Chapter 11 or Chapter 13?

Subject to certain income and eligibility requirements an individual can file a Chapter 7, 11 or 13.  Corporations/LLCs/Partnerships file for Chapter 7 or Chapter 11 but not Chapter 13.

What is a Chapter 7 bankruptcy?

A Chapter 7 is filed to obtain a discharge of debts and an individual may do so unless the net income, after all reasonable expenses are considered, is such that an excess amount remains that should be paid over to the creditors.

In a Chapter 7 the trustee must marshal all of debtor’s non-exempt assets, liquidate them and pay off the creditors. Chapter 7 should not be filed if there are non-exempt assets that the Debtor does not want sold off. It should also not be filed if you are behind on house or car payments and want to keep these assets.

In a Chapter 7 some debts are discharged. Liens (mortgages, debt owed to car creditors) are not discharged nor are recent tax obligations, student loan debts, domestic support related debts or debts that the court finds were incurred through fraudulent conduct or result from damage caused by willful, malicious conduct or criminal activity.

What is a Chapter 11 bankruptcy?

A Chapter 11 is filed by individuals when the debts owed make them ineligible for Chapter 13. It is also filed by businesses when they seek to reorganize their debt and propose a payment schedule to their creditors that will allow them to stay in business and pay back some or all of the debt over an extended period. The Chapter 11 procedure is complicated and designed for businesses that owe substantial debt and is an expensive remedy for those who are forced to file because of mortgages on their residence.

Bankruptcy Courts have attempted to make it a less expensive procedure. In the Northern District of California which encompasses the counties of Del Norte, Humboldt, Mendocino, Lake, Sonoma, Napa, Marin, Contra Costa, San Francisco, San Mateo, Santa Cruz, Santa Clara, San Benito and Monterey counties, the courts have adopted a Combined Plan and Disclosure Statement to make it easier to formulate a plan which can be downloaded.

What is a Chapter 13 bankruptcy?

A Chapter 13 is filed to protect assets, and to cure back payments owed on a house over time (up to 60 months), to pay off a car loan, to pay off any income tax obligations and to provide for repayment of debts that cannot be discharged in a Chapter 7. In a Chapter 13 the Debtor proposes a Plan (drafted by the Attorney) under which debts required to be paid will be paid.  Chapter 13 works best if you intend to keep the home and have sufficient income to make ongoing obligations and can also pay any past due payments on real estate obligations spread over a five (5) year period. Mostly, debts that are not dischargeable in a Chapter 7 may also not be dischargeable in a Chapter 13. Chapter 13 offers protection to co-debtors during the pendency of the proceeding.

Eligibility for Chapter 13: An individual can file a Chapter 13 if the secured debts are less than $1,184,200 and the unsecured debts are less than or equal to $394,725 based on adjustments effective April 1, 2016. These limits are adjusted for inflation every three years.  For additional details see eligibility requirements and adjustments under bankruptcy and other federal laws.

What is the effect of prior bankruptcies?  When can you refile?

You are eligible to file a new Chapter 7 and obtain a discharge if the prior bankruptcy was a Chapter 7 and you obtained a discharge at least 8 years ago; or if the prior bankruptcy was a Chapter 13 and you obtained a discharge at least 6 years earlier.

You are eligible to file a Chapter 13 and obtain a discharge if the prior bankruptcy was a Chapter 7 and you obtained a discharge at least 4 years ago; or if the prior bankruptcy was a Chapter 13 and you obtained a discharge at least 2 years earlier.

If the prior bankruptcy was dismissed, you can refile a new case but may not have the benefit of the automatic stay, if the new case is filed within one year of the dismissal of the first case, which protects against creditor foreclosures unless the Court grants your motion to extend the stay for more than the 30 day period.

Can you avoid junior liens in Chapter 13

Chapter 13 also allows you to get rid of a junior lien (a 2nd or 3rd mortgage or an equity line) on real property if the Market value of the real property is less than the amount owed to the first or senior mortgage and you complete the chapter 13 plan.

What property can you keep (Exempt Property?)

In California those who file for bankruptcies may select between two sets of exemptions. These exemptions determine what you can keep in a Chapter 7 or, if you do a Chapter 13, how much to pay back to unsecured creditors (all creditors except: tax, mortgage creditors, student loans, domestic support type obligations).

One set of exemptions is used when protect equity in a home while the other set is used when protecting other assets.   Click here for a good discussion on exemptions and what you can keep.

Do I have to go to Court?

After a bankruptcy is filed, a Notice of bankruptcy filing is sent out to all creditors listed in the bankruptcy and the court sets a time for you to appear and meet with the Chapter 13 and with any creditors interested in doing so. At that meeting the Trustee will ask questions based on the documents you file, inquire about the assets you have, the basis for the value ascribed to them and about any transfer or sale of assets made by you.  There may be other questions.

What Questions will the Trustee Ask me at the Court Hearing?

The Trustee verifies identity, confirms residential address, and reviews social security information (bring your License or California identification card and your social security card with you).

What sort of questions does the Chapter 7 Trustee ask?

  • Dates of any prior bankruptcies
  • Verify Schedules are correct: All Assets and debts listed.
  • Verify any transfer of asset information has been disclosed.
  • Inquiry regarding any litigation, any inheritance, any domestic support/alimony owed.
  • Verify you reviewed the bankruptcy documents and signed them. If translator required then who translated?
  • Verify who prepared the bankruptcy documents and if any payment made to other than the Attorney appearing with you.

What sort of questions does the Chapter 13 Trustee ask?

  • Dates of any prior bankruptcies
  • Verify Schedules are correct: All Assets and debts listed.
  • Verify any transfer of asset information has been disclosed.
  • Inquiry regarding any litigation, any inheritance, any domestic support/alimony owed
  • Verify Employment Information and gross income
  • Verify all prior tax returns filed and current year tax return will be filed timely
  • Verify number of people in household – Any support received from other members of the household
  • Verify valuation basis for assets – Broker price opinion or appraisal may be need for homes, blue book valuation may be enough for cars.
  • Verify you reviewed the bankruptcy documents and signed them. If a translator is required then who translated?

Can a Tax Debt be Discharged?

If the income tax debt meets all five of these rules, and the tax return was filed, then the tax debt is dischargeable in Chapter 7 and Chapter 13 bankruptcy petitions.

  • The due date for filing a tax return is at least three years ago.
  • The tax return was filed at least two years ago.
  • The tax assessment is at least 240 days old.
  • The tax return was not fraudulent.
  • The taxpayer is not guilty of tax evasion.

Can you eliminate judicial liens on real property?

If the equity in the property determined by subtracting from the Market value of the property any mortgages and property tax obligations recorded against the property is less than the allowed exemption amount, then judgment liens can be voided.

Where are the Bankruptcy Courts Located?

Northern District of California Courts have offices in Oakland, San Jose, Santa Rosa and San Francisco. Cases are filed based on the county of residence. A helpful map that shows where the case should be filed is available at Case filing Location.

Useful links:

For finding an Experienced Bankruptcy Lawyer: State Bar of California, Board of Legal Specialization, Bankruptcy Legal Specialist

Another website that is a good source for selecting a Bankruptcy Attorney is the website for the National Association of Consumer Bankruptcy Attorneys. This is an organization dedicated protecting and enhancing the rights of consumer bankruptcy debtors by getting involved in legislative efforts to change the Bankruptcy Code.

Click here for Information about Bankruptcy Trustees in the Northern District of California