Frequently Asked Questions

1. When will creditor harassment end?

Answer: Immediately upon retaining Farmer & Ready, A Law Corporation. Once we are retained, you will refer any calls from creditors to us. The Fair Debt Collection Practices Act prohibits a creditor who knows about your legal representation from contacting you directly. Once the bankruptcy case is filed, you will have the additional protection of a court order that prevents creditors from calling. Violation of either of these contact prohibitions can result in monetary sanctions imposed against your creditor.

2. Will I lose everything if I file for bankruptcy?

Answer: No. The majority of bankruptcy cases filed from the San Luis Obispo/Santa Maria area result in no assets being taken from the debtors. The purpose of a bankruptcy is to allow you to get a fresh start in your financial life, and retaining items such as your house, your vehicles, and your personal belongings, as well as your retirement accounts, is essential to that fresh start. Each potential client has his or her unique set of property interests and we will discuss that with you at our initial meeting and tell whether any of it is at risk.

3. I'm married. Does my spouse have to file?

Answer: No. The better question is "Should my spouse file?" This is a fact-intensive inquiry focusing on your assets, your spouse's assets, when you were married, and when the debts were incurred. That's one of the reasons we ask you to fill out our form provided to you before our visit.

4. Who knows about my bankruptcy?

Answer: The list obviously includes you, the bankruptcy court, your attorney, and all of your creditors. But filing bankruptcy is a public act and the public has access to the records. Your employer is not generally notified. Currently, there is no local publication listing who filed bankruptcy cases. Some bankruptcy filings gain notoriety because of who they are, for example: Los Osos Community Services District, Estate Financial, Haggen, Radio Shack and even PG&E.

5. Will I be able to rent an apartment after I file bankruptcy?

Answer: Yes. Last year there were over 1 million bankruptcy cases filed in the United States. Certainly not all of those people are homeowners or homeless; they are also renters. If you are currently a month to month renter and do not owe any back rent, your landlord should not learn of your bankruptcy and there should not be any problems in renewing that lease. On the other hand, if you are applying for a new lease, a prospective landlord may run a credit check which will show your bankruptcy. The existence of a recent bankruptcy may be an indication that you are a better credit risk than a credit report showing you are being pursued by credit card companies and collection agencies as the law restricts you from another bankruptcy filing for a number of years.

6. Can I get rid of student loans or tax obligations?

Answer: Generally, student loans will not be discharged in bankruptcy. There are some exceptions, and we will be happy to discuss those. Income taxes may qualify to be discharged if tax debts are more than 3 years old and you filed a timely and accurate tax return. If you filed a late tax return, such taxes are generally dischargeable only if you file bankruptcy more than two years after filing that late tax return.

Of course, these are only general rules and you should talk with us about your personal issues.

7. Can I get credit after filing bankruptcy?

Answer: Yes. Credit is your ability to borrow money. Lenders consider all sorts of factors while determining whether to lend you money. Most prospective lenders focus on the debt-to-income ratio. Since filing bankruptcy eliminates most if not all of your debts, it will improve your debt-to-income ratio, making you a more attractive borrower.

Many of our clients who thought they could not live without credit cards find that debit cards are an easy and available solution, removing the temptation to step back into a cycle of overwhelming debt.

8. How do I choose a bankruptcy attorney?

Answer: The first criteria should be knowledge and experience. At Farmer & Ready, A Law Corporation, we don't do criminal law. We don't do divorces. We don't do personal injury and we don't do estate planning. We are entirely focused on commercial and property law. Paul Ready not only regularly attends educational bankruptcy conferences, he lectures on the issue. No other local firm can duplicate our firm's knowledge base, or experience.

The second question you should ask in choosing a bankruptcy lawyer is whether you will get personal attention. While we may deal with hundreds of bankruptcy cases a year, you will probably deal with one in your life. Be assured, that if you retain us, you will have our undivided attention to ensure the easiest passage possible through the bankruptcy process. Your case will not be handled by a paralegal. While our staff members may contact you for necessary information or to give you a status report, an attorney always will be your primary source of contact.

9. How long will this take?

Answer: Once you retain us and provide all necessary information for preparation of your bankruptcy petition and schedules, it usually takes two to three weeks for us to complete the paperwork so that you can sign it and we can file it with the bankruptcy court. A hearing in Santa Barbara, before a trustee, not a judge, is usually scheduled four to six weeks thereafter. In most cases, a discharge is granted about three months after that hearing. Add that up, and it comes out to five to six months from hiring to completing the bankruptcy process.

10. How much will this cost?

This is the only question to which we cannot provide an answer here. Each case is unique. Some are difficult, some easy. We are only able to make that analysis when we sit down with you at your first conference. At that time you will be quoted a fee. It will not be an estimate. It will be what we will charge you, including all costs such as court filing fees.

For answers to other questions, review our homeowner's bankruptcy FAQs or contact us to arrange an appointment.