In the United States, our economy is largely based on credit. Credit card companies inundate us with tempting offers of pre-approved credit cards with hard-to-resist teaser rates. Now, with the economy struggling to return to its pre-2008 level, many people are still struggling with unemployment, underemployment, and piles of consumer debt. Realistically, you can only continue for so long to try to keep up, when your debt has long since outrun your means. At some point, it becomes an exercise in futility, and when that happens, nobody wins, least of all the U.S. economy, which depends on people having the ability to spend.
If you find yourself running to catch up but falling further and further behind, and you spend more time and energy dodging creditors than you do seeking improved sources of income, it may be time to consider filing for bankruptcy.
The first step is to locate an experienced California bankruptcy attorney. If you live in San Diego County, you can take advantage of a free bankruptcy consultation with an experienced San Diego business lawyer at Contreras Law Firm to find out if you qualify.
TYPES OF BANKRUPTCY
As an individual or a couple, you essentially have two possible options available under the Bankruptcy Code: Chapter 7 and Chapter 13. A third, Chapter 11, applies primarily to business bankruptcies, but in a rare few cases may be used by an individual.
Chapter 7 is the simplest and quickest way to discharge your unsecured debt, primarily medical bills, credit cards, older utility bills, and deficiency judgments on repossessed property. You must be able qualify for Chapter 7 with a means test to show that your income is not sufficient to pay your creditors. If you have secured debt, such as a mortgage or vehicle, if your payments are up to date, you can usually keep making them and retain the property; or you can surrender the property without having to pay a deficiency balance.
Theoretically, a Chapter 7 requires that your assets be liquidated to pay creditors; however the statute allows many exemptions, protecting many assets from liquidation, including some home and vehicle equity, personal property, retirement benefits, insurance policies, public benefits, wrongful death and personal injury awards, and a percentage of your recent earnings. Many people who file Chapter 7 have nothing to liquidate after exemptions are applied. Again, your attorney can explain how bankruptcy exemptions work in California and which you are entitled to. The bottom line is that the majority of people who file Chapter 7 rarely have to liquidate much, if anything, and are usually left with their personal possessions mostly intact and the means to move on with life nearly debt free.
CHAPTER 13: PAYING DEBT OVER TIME
If you do not qualify under the means test for Chapter 7, you may qualify for Chapter 13, which is a 3 to 5 year payment plan that allows you to keep all of your property, after which remaining debt may be discharged. Chapter 13 stops creditor harassment and wage garnishment and gives you an opportunity to keep your home and get caught up on payments if you're behind on your mortgage. Of course there is much more to it, and you can learn if Chapter 13 is right for you by reviewing your financial situation with your San Diego bankruptcy attorney.
REORGANIZATION UNDER CHAPTER 11
Chapter 11 of the Bankruptcy Code provides a means for a business to reorganize when it has experienced financial problems but is still viable. Chapter 11 involves proposing a plan to pay creditors over time while keeping the business going.
LEARN MORE ABOUT CALIFORNIA'S BANKRUPTCY OPTIONS AT CONTRERAS LAW FIRM IN SAN DIEGO
At Contreras Law Firm in San Diego, our knowledgeable bankruptcy attorneys will meet with you for a free initial consultation to discuss your situation and help you determine if bankruptcy is right for you. Stop the stress of creditor harassment now. Call Contreras Law Firm today.Back to Top