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Frequently Asked Questions

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When you take a look at the benefits that you receive from a bankruptcy discharge you will find that the cost is very small. The cost of a bankruptcy will range between $800 and $6,000 depending on the complexity of the case. The discharge makes it so you are able to completely wipe out debts. There’s no limit on the amount that you can discharge. So, suppose for instance that you have $12,000 in debt. Suppose that you were to pay $6,000 for your bankruptcy (because for whatever reason it was a fairly complex case). Well, wouldn’t you be getting a 100 percent return on your money? Wouldn’t you be doubling your money? Wouldn’t it make even more worthwhile to file for bankruptcy if you owed even more?

So, for a few thousand dollars or less you stand to gain a great deal. Eliminating a lot of debt for a relatively small amount puts you back on the road to recovery. In addition, you have the peace of mind that you are protected under bankruptcy law, which prevents your creditors from garnishing your wages and levying your bank accounts.


Many peoople try different things before they even consider bankruptcy, so they are not rushing into it. Often, they have bent over backwards to try and make it work. They make sacrifices in a valiant effort to keep a handle on their finances. But, many just can’t make it. Eventually they reach a point where they are exhausted and simply become overwhelmed by it all, so bankruptcy really is the final option. Filing a bankruptcy does not immediately make them bad people. Instead, it is the light at the end of the tunnel that has been the turning point for many great and famous Americans who have influenced and helped to shape our lives today, such as Henry Ford, Walt Disney, Abraham Lincoln, and Dave Ramsey just to name a few.

Also, consider that debt forgiveness is found in the Bible. “At the end of every seven-year period you must cancel debts.” Deuteronomy 15:1. Leviticus 25 speaks of a complete discharge of debts in the fiftieth year Jubilee and Ezekiel 18:13 condemn the charging of interest. Finally, consider that the bankruptcy discharges your legal, as opposed to your moral, obligation to pay most debts. So, when the bankruptcy is over, you can pay anyone and everyone back if you desire according to your schedule and on the conditions that you find is just.

Good people who are unable to stay on top of the credit card payments, vehicle payments, and mortgage payments owe it to themselves and their families to consider bankruptcy as an option. Filing a bankruptcy is actually one of the mechanisms to start over and it is one of the best steps a person can take on behalf of their family.


While some people can handle their bankruptcy by themselves, it really isn’t for everyone and many should hire a lawyer to handle it on their behalf. The bankruptcy process used to be a lot simpler, but it has become much more complicated since 2005. The person would still need to figure out what type of bankruptcy to file. But, in addition, they now also have to determine whether they are even eligible for a Chapter 7 bankruptcy. If they must do a Chapter 13 bankruptcy they need to determine the length of their plan.

Further, they would need to come up with a plan that could be confirmed in a Chapter 13 case taking into account their CMI and the Best Efforts test. Considering that less than 1 percent of “pro per” Chapter 13 cases ever reach confirmation it is clear the odds are stacked against them. The importance of this is that the process can and often is complicated, so it would be really easy to make simple costly mistakes that in some situations may be irreparable.


When you file for bankruptcy, immediately there is a court order that protects you from your creditors. This court order, also known as the automatic stay, prevents your creditors from taking action to collect on a debt, such as calling you on the phone and sending you collection letters. Also, it stops your creditors from filing a lawsuit. In addition, it prevents your creditors from continuing with a lawsuit that is already pending.


Once you file and you will have some breathing room, because your creditors must stop in their efforts to collect on a debt. So, for instance, they can’t call you or send you collection letters to demand payment. Your creditors can’t file a lawsuit against you or continue with lawsuit against you. Even if your creditors have a judgment they cannot garnish your wages or levy your bank accounts after you file for bankruptcy. You are protected when you file for bankruptcy, so you should be able to sleep easier.


Ideally you will want to build your credit score and get it up to 720 in order to take advantage of the best credit offers. Know that it will take some time, but you can make it. Here are a few suggestions on how to improve your credit after the bankruptcy is completed. One way to improve your score is to get a secured credit card, which you use to pay for all the things you know are needed each month in order to have an established payment history.

Another way to improve your score is to obtain a copy of your credit report to confirm that the information it contains is correct and to notify the credit bureaus of any mistakes. Also, avoid department store and charge cards that lure you with incentives (i.e. same day discount on purchases) that will have relatively high interest rates and limited use elsewhere.


One of the biggest misconceptions is that it is the end of the road when you file for bankruptcy. However, that couldn’t be further from the truth. Bankruptcy helps many people to right their course, it is a turning point, and it’s how we can all have a new beginning. Consider the many great and famous Americans that bankruptcy has helped, such as Henry Ford, Walt Disney, Abraham Lincoln, and Dave Ramsey. The existence of bankruptcy gives us hope of a new and better tomorrow.


Ask yourself the following questions:

  • Am I in over my head in payday loan?
  • Am I having trouble paying bills?
  • Do I have a lot of medical bills?
  • Am I having trouble paying for living expenses?
  • Have I recently lost income?
  • Do I owe a lot in credit card debt?



Filing Chapter 7 bankruptcy will generally include the protections of the Automatic Stay and Chapter 7 exemptions, which can help you protect your home, car, wages and other important belongings from creditors, and may prevent foreclosure.


1) Owe on medical bills and credit card debt.

Bankruptcy is designed to completely wipe out unsecured debts like credit card and medical bills. Typically, it works quickly, meaning you don’t have to wait years to wipe the slate clean.

2) Do not own much property.

Chapter 7 property protections will vary according to state and/or federal exemption laws. However, generally speaking, a Chapter 7 offers less protection for your property than Chapter 13 bankruptcy. But, Chapter 7 exemptions may allow you to keep your home, car, and other valuable possessions such as tools of your trade, furniture, clothes, appliances, photos and books.

3) Do not have much income.

To qualify for Chapter 7 bankruptcy, you must pass the means test. We can help you with this test by discussing your income and debts and evaluating your financial situation against the state income median.


For people overwhelmed by debt who are losing financial stability, a Chapter 7 bankruptcy offers relief to recover balance. Chapter 7 bankruptcy was designed to discharge, or wipe out, unsecured debt, including:

Credit Cards

  • Medical Bills
  • Payday Loans
  • Some Personal Loans
  • Utility Bills


  • Are you behind on paying your bills and are looking for extra time to repay them?
  • Are you facing a foreclosure and want to keep your home?
  • Are you facing car repossession and want to keep your cars?
  • Do you have debt that is the result of a temporary financial setback, like a job loss, injury or illness?
  • Do you have regular income so you can make the lower, interest
  • free monthly payment required under Chapter 13?

If you answered yes to any of these questions, it is time to consider whether filing a Chapter 13 bankruptcy is right for you.


Chapter 13 was designed to stop foreclosure, repossession, wage garnishments, lawsuits, and creditor harassment.

Chapter 13 bankruptcy works with the courts to consolidate, prioritize, repay; and, in some cases, reduce or eliminate old debts and junior mortgage liens.

This type of bankruptcy allows you to make one lower, interest-free monthly payment to a trustee. In turn, the trustee prioritizes your debts and deals directly with your creditors.

Unlike Chapter 7 bankruptcy, which specifies people who are qualified to file, most are allowed to file bankruptcy under Chapter 13. Allow us to answer your questions and discuss the ways we can help you get back on the road to financial freedom. Call the Law Offices of David V. Luu to schedule your free bankruptcy case consultation.


Creative solutions for your Tax issues

With the 2005 bankruptcy law changes, many people think that they cannot discharge any tax burden with a personal bankruptcy. While the rules make it more complicated, you can still discharge tax debts through a Chapter 7 or Chapter 13 bankruptcy.

The Law Offices of David V. Luu has been able to help many people throughout Southern California get all or some of their tax debts discharged. We take full advantage of the tax and bankruptcy laws to obtain maximum debt relief for our clients.

Contact us to see if a bankruptcy filing will allow you to eliminate or reduce your tax burden.

Bankruptcy and the IRS

If you owe a significant amount in back taxes to the Internal Revenue Service (IRS), it is still possible to discharge your debt, if you meet the following conditions:

  • You filed a return
  • You did not commit fraud in filing your return
  • You owe federal income tax—not payroll tax
  • Your debt is over three years old
  • You were assessed the tax at least 240 days before the bankruptcy filing

When dealing with income taxes, it is very important to pay attention to all deadlines, including those of the previous tax returns, as they may affect your ability to discharge your debts. Even if you do not fully qualify, we may be able to find a way of getting you relief with a repayment plan without interest and penalties.

One more important fact to consider — as soon as your bankruptcy petition is approved, IRS penalties and interest fees stop accumulating.

Contact a Santa Ana Bankruptcy Attorney

If you are more than three years delinquent on your income taxes, contact an experienced Chapter 13 and Chapter 7 lawyer at the Law Offices of David V. Luu in Santa Ana. We can help you get rid of that tax burden for good.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.


In most cases, student loan debts are not dischargeable. But, our firm can still help you deal with the negative effects that your loans are having on your life. Our firm can file a Chapter 7 or Chapter 13 bankruptcy for you. This can eliminate or substantially reduce your other debts, such as credit card debts, medical bills and unsecured personal loans.

A student loan can be discharged only in certain extraordinary circumstances. But even if your student loans are not dischargeable, the Law Offices of David V. Luu can still help you deal effectively with your debt burden. For instance, under a Chapter 13 bankruptcy, it is possible to substantially reduce your monthly studen loan payments without penalties. In many cases, our firm has been able to cut our clients’ monthly student loan payments to zero. Think of what an extra two or three hundred dollars every month can mean for you.


A creditor has the right to seek a judgment against a debtor who has fallen behind on payments. The judgment in turn enables the creditor to repossess a car, foreclose on a house, garnish wages, or freeze/levy bank accounts. What can you do to protect yourself against these actions?

By filing for bankruptcy, you can stop a judgment from happening. If a judgment has already been entered, bankruptcy can stop your property from being repossessed.

At the Law Offices of David V. Luu, we use the powerful bankruptcy law to stop judgments, repossession, foreclosure and wage garnishment. We have helped hundreds of people obtain debt relief and an end to judgments, repossession, and wage garnishments.

Contact us to schedule a free consultation to meet and speak with a bankruptcy attorney about your legal options. We want to help you rebuild a life for you and your family.

Act Quickly to Protect Your Assets

Many people in financial trouble wait too long before seeking help. But, just hoping that your finances will improve is not advisable. Every day you wait before getting help puts you further in the hole and a greater risk of a lawsuit and judgment against you.

If you are having trouble paying your bills, if creditors are harassing you or you have received notice of a lawsuit, you should contact us as soon as possible. We can review your situation and recommend an appropriate solution for you.

If your decision is to file for Chapter 7 or Chapter 13 bankruptcy, we can stop the threat of a judgment, wage garnishments, bank levies, and repossession. Bankruptcy can reduce or completely eliminate credit card debt, medical bills, and other loan obligations.

Do not delay. The sooner you call the Law Offices of David V. Luu, the sooner we can act to help you protect your assets.


An illness or accident can be disastrous to your financial well-being. If you have unpaid medical bills you are not alone. Two-thirds of all bankruptcy filings in the U.S. are due in part to medical reasons–and of those, three-fourths of the weight of their medical bills. The bankruptcy system can enable you to completely wipe the slate clean or substantially reduce the amount of your unpaid medical debts. Best of all your ability to obtain medical care will not be affected if you file for bankruptcy. You will still be able to get the treatment that you need.


In California, a creditor can obtain a court order and then garnish your wages or levy/seize your bank account.

When this happens, you have even less control over your life than you had before. Wage garnishment makes it difficult to make ends meet — threatening even your ability to pay the rent.

At the Law Offices of David V. Luu, we can prevent or stop bank levies and/or wage garnishments. By filing bankruptcy, wage garnishment actions, as well as creditor harassment and the threats of judgments must stop. And, by filing for bankruptcy you can reduce or eliminate many of your debts.

When we file bankruptcy for you, wage garnishments stop, as do repossession and foreclosure actions. Upon completion of the bankruptcy case, your debts will be reduced and in many cases written off completely. You will have the chance to rebuild your credit and begin your financial life anew.

As soon as you hire us to represent you the creditor harassment must stop. Bill collectors and collection agencies can no longer call you by law. If they do call you, just say three magic words — “Call my attorney.” Inform them that the Law Offices of David V. Luu is representing you and give them our phone number. We will handle all dealings with that creditor from that second on. You can focus on your real life, secure in the knowledge that an experienced attorney is working diligently to obtain debt relief for you.


There are some areas of the law (such as changing a name, filing a no-fault divorce, or preparing a simple will) where an individual might adequately represent himself or herself legally with the assistance of a “Self-Help” book. In the area of bankruptcy law, however, there is one significant difference that makes hiring a lawyer the best idea:

The other side often has in-house attorneys or panel-counsel skilled in getting the monies due their client.

As such, banks and collection agencies frequently attack “in pro per” bankruptcies (those filed without an attorney) by filing a “Dischargeability Complaint” that states that a particular debt owed them should be exempted from the discharge. Often, the individual filing without the benefit of an attorney lacks the expertise to respond and making costly mistakes to cause them to owe thousands of dollars more than they would had they had paid for the aid of legal counsel.


Your FICO Score — the main measure of the health of an individual’s credit — determines whether creditors will lend you money, how much, and at what interest rate. The higher the score the better. As your debt to income ratio increases, your score decreases. Every late payment decreases your credit score. If you default on your loans without filing bankruptcy, your credit is likely to be so damaged that you will not be able to repair it by yourself.

After we file bankruptcy for you, your debts will be reduced or eliminated. Some people resist considering bankruptcy, because they mistakenly believe that would will ruin their credit forever. In fact, the opposite is often true. After filing for bankruptcy most credit scores improve within 12 and 24 months of the bankruptcy discharge, because the debt to income ratio has dropped dramatically.


“You can save your home.” Foreclosure. It’s every homeowner’s nightmare. But it doesn’t have to happen to you. Filing for bankruptcy halts the foreclosure — and can lift the burden of debt from your shoulders, while sometimes eliminating second mortgages.

If you are behind on your mortgage payments, or you are not paying other bills in order to stay current on your mortgage, the warning signs are clear. You need to take immediate action before you fall into deeper financial trouble. An attorney at our firm can review your options and recommend an appropriate course of action for you. Our firm can stop a foreclosure at any time up to the trustee’s sale by filing for bankruptcy on your behalf.

Your options may include filing for a Chapter 13 or Chapter 7 bankruptcy.

A Chapter 13 bankruptcy stops foreclosure. Your debts are reduced and in some cases eliminated. You will get an affordable payment plan that can enable you to regain your financial health. You can even roll your past due mortgage payments into your payment plan, while sometimes eliminating second mortgages completely.

A Chapter 7 bankruptcy also stops foreclosure for a while — long enough for you to find the money to get current on your mortgage or to find another place to live.


There are certain debts that a Chapter 7 does not address:

  • Taxes
  • Student loans
  • Car loans
  • Home loans

A Chapter 13 will usually allow you to address these debts (for example, by lowering the purchase price, monthly payments, and/or interest on a car) while paying your credit cards and medical bills nothing or substantially less.

In Chapter 7, you are allowed to keep property only if it is “exempt” (a house, for example, only if it has a limited amount of equity). In Chapter 13, the court can rarely dispose of any of your property.

In Chapter 7, the person filing is protected from their creditors. However, those same creditors are free to collect from any co-signers. In Chapter 13, the co-signers may be protected as well.


NO! Once the papers are brought to the courthouse, a federal court order goes immediately into effect, which prevents a car from being repossessed. In a Chapter 7 bankruptcy, the client simply continues to make the payments on the loan. In a Chapter 13, a monthly payment is worked out with the court, which in turn pays the car lender. The monthly payment is often hundreds of dollars less than the original payment, and can be imposed upon the lender regardless of how many months the client may have missed prior to filing bankruptcy.

We can even lower the purchase price, car or vehicle payments you are making, and the interest you are paying. In a Chapter 13 bankruptcy, the client typically pays the value of the vehicle with either the contract rate of interest OR the market rate, whichever is lower. Since most clients owe thousands of dollars more than their vehicles are presently worth, they get to save a substantial amount on the purchase price. If we can also slash the interest rate-perhaps in half-the result is a monthly payment often HUNDREDS OF DOLLARS less than the original car payment.


First of all, if you are considering bankruptcy, your credit is probably not all that good to begin with. Secondly, most clients report their credit rating scores actually IMPROVE upon filing their case! Clients typically start receiving multiple offers of credit about 90 days after filing Chapter 7. Credit card companies begin to see them as inviting targets for credit card solicitations because they recognize the filing individual’s debt-to-income ratio has dropped substantially after filing and that the filing individual is prevented from receiving another Chapter 7 discharge for six or eight years.

So, bankruptcy can actually become a tool to rebuild a credit rating.


Bankruptcy is one of the few areas where you can immediately and powerfully stop IRS and state tax collection activities. The moment the first papers are brought to the court, the IRS must immediately stop wage garnishments and bank levies! Taxes that are over 3 years old can be TOTALLY ELIMINATED. More recent taxes have to be paid, but usually with no more interest or penalties, and any penalties that have accrued are wiped out.

For a client that has witnessed their tax bill grow by leaps and bounds, anything that removes the interest and penalties is a huge relief.


YES! If you have missed mortgage payments, or were not able to pay off an expired balloon payment, a foreclosure process can be commenced by the lender. A Chapter 13 bankruptcy allows you to place an immediate freeze to the foreclosure process. If you are able to resume the mortgage payments, the Chapter 13 allows you to make up the ones missed over several years. Even if you cannot resume the mortgage payments, the Chapter 13 may allow you sufficient time to sell your home and at least gain the equity in cash that otherwise would be lost in foreclosure.


It is nearly impossible to discharge student loans in a bankruptcy (unless the debtor is permanently disabled or diagnosed with a terminal illness) but it is possible to restructure the debt in Chapter 13.

Bankruptcy can gain you a student loan deferment of up to five years.

Though you will still owe that portion of the loan which was not yet paid, at the end of the deferment, your career will presumably be back on track and you will be debt-free and better able to resume payment of the student loan.


Small business owners put their hearts and souls into their business operations. Despite their hard work and long hours, many find themselves burdened with unmanageable debts that threaten to drive their businesses under.

If you are a sole proprietor facing financial difficulty, you may be able to reduce your debts while keeping your business. A Chapter 13 bankruptcy can give you the extra cash flow you need to make your business a success.

At the Law Offices of David V. Luu, we have extensive experience helping small business owners obtain debt relief through bankruptcy. As small business owners ourselves, we understand the financial challenges you face and your strong desire to keep what you have worked so hard to create. Time spent dealing with creditors is time you cannot devote to serving your clientele. By solving the debt problem, you can free up the time and retain the extra cash flow you need to make your business a success.


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Office Locations

930 W. 17th Street
Suite B
Santa Ana, CA 92706
Tel: (714) 697-8600