CA Bankruptcy Attorney - Find Your Local CA Bankrupcty Attorney for the help you need
What is Bankruptcy?
Bankruptcy is a proceeding in a federal court in which an insolvent debtor's assets are liquidated and the debtor is relieved of further liability. Chapter 7 deals with liquidation, while Chapter 13 deals with reorganization. If you have questions concerning bankruptcy, you should seek the advice of a licensed bankruptcy attorney. Also, see
www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html
Types of Bankruptcy
Chapter 7 bankruptcy is when the court appoints a Trustee who may liquidate or sell some things that you own to pay your creditors. Most of your debt will be canceled, but you may choose to pay some creditors, usually to keep a car or home in which the creditor has a lien.
Chapter 13 bankruptcy is when your debt is reorganized into a single monthly payment. The payment will continue for 36 to 60 months. In no case may a plan provide for payments over a period longer than five years. You do not have to repay all of your debt. You pay only as much as you can afford, but the minimum payment may be affected by property you want to keep. When you complete the payments, debt not paid is discharged.
Advantages and Disadvantages of filing for Bankruptcy
Advantages of bankruptcy:
- One of the most important advantages of filing for bankruptcy is that debtors may obtain a fresh financial start.
- If you are eligible for Chapter 7 you may be forgiven (discharged from) most unsecured debts. A secured debt is one which the creditor is entitled to collect by seizing and selling certain assets of the debtor if payments are missed, such as a home mortgage or car loan.
- You may be able to keep (that is, exempt) many of your assets, although state laws vary widely in defining which assets you may keep.
- Collection efforts must stop as soon as you file for bankruptcy under Chapter 7 or Chapter 13.
- You cannot be fired from your job solely because you filed for bankruptcy.
Disadvantages of bankruptcy:
- A bankruptcy can remain on your credit record for 7-10 years and can affect your future finances.
- A bankruptcy may impede your chances of getting a mortgage or car loan for some time.
- Not all debt will be discharged. Some debt that cannot be discharged is child support, alimony, some student loans, divorce settlements and some income taxes. You should check with an attorney on the specific categories of debt that will be allowed for discharge.
Does Bankruptcy Eliminate Debt?
Filing bankruptcy does not necessarily eliminate all debts, and often simply restructures existing debts - this leaves you responsible for all future payments. Filing bankruptcy also stays with you for up to 10 years and you may have difficulty getting any type of loan. Bankruptcy is public record and will be reflected on your credit report but not permanently. Speak to one of our credit counseling experts if you need assistance.
Is Bankruptcy the Best Solution?
Anyone who is considering bankruptcy needs to fully understand the process and the laws surrounding bankruptcy. Questions about bankruptcy should be addressed by a licensed bankruptcy attorney.
Alternatives to Bankruptcy
There are alternatives to bankruptcy and you can avoid bankruptcy with outside help. It is important to get early advice about bankruptcy if you are hoping to use the bankruptcy process to save your home or your car. Successful debt management can be a
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