You may face debts like credit card debts, falling behind on mortgage payments, car loan debt, or student loan debts. Declaring bankruptcy may be an ideal option for you if you don't have any other alternative for paying your debts. Once you file for bankruptcy, you can fix your financial problems and pay the debts later.
According to California bankruptcy laws, you pay what you can afford, and the court will dismiss what you cannot. However, bankruptcy cases are very complex, and you will need legal assistance from an experienced bankruptcy attorney. A West Hills bankruptcy attorney will evaluate your case and discuss whether declaring bankruptcy is your only choice.
Notably, there are several types of bankruptcies. Therefore, you should file the kind of bankruptcy which suits your case. To avoid complications, you will often need a bankruptcy attorney in every step you take. Our experienced attorneys at Los Angeles Bankruptcy Attorney have represented countless clients filing for bankruptcy in West Hills, San Fernando Valley. We will evaluate your situation and guide you on the available options before you file for bankruptcy.
Bankruptcy is a legal process involving a business or person who cannot repay their outstanding debts to creditors and seek relief from all or some debts. The bankruptcy exercise starts with a petition which is filed by the debtor. Additionally, the debtor's assets are evaluated and may be essential in repaying a portion of their debts.
Filing for bankruptcy offers a business or an individual an opportunity to have a fresh start by forgiving their debts which they cannot pay. Moreover, it allows the creditors to obtain legal measures of repayments depending on the business or personal assets available for liquidation.
It is beneficial to the general economy as it allows businesses and individuals to have another opportunity to provide their creditors with a debt repayment portion. After completing the bankruptcy process, the bankruptcy court relieves the debtor from their debt obligation.
In California, federal courts handle bankruptcy cases. The bankruptcy judge decides whether the debtor is eligible to file for bankruptcy or not. If the court determines that you qualify to file for bankruptcy, you can go ahead and file for bankruptcy. Notably, there are several types of bankruptcies across California. Therefore you should be keen on which type of bankruptcy you are filing. It is essential to ask yourself the following questions before filing for bankruptcy:
- Which type of bankruptcy is best for you?
- Which other alternatives do you have apart from filing for bankruptcy?
- Which type of debt will bankruptcy eliminate?
A West Hills bankruptcy case is filed in the US bankruptcy court in the central district of California. If your petition is dismissed, you will wait for one hundred and eighty days before you refile the case. Therefore it is a good idea to seek assistance from a bankruptcy attorney before you file for bankruptcy. With legal help, the chances of dismissal for your case will be minimal.
Are You Eligible for Chapter 13 Bankruptcy?
You may have similar debt amounts with your colleague but end up filing different types of bankruptcy. Although the main goal for bankruptcy is clearing your debts, all bankruptcies aren't created equally. The following are several types of bankruptcy:
The chapter is Sometimes referred to as liquidation or straight bankruptcy. Additionally, the chapter is the most familiar form of bankruptcy among the people living in West Hills. A California appointed trustee is set to oversee the sale of your assets to pay your creditors. The bankruptcy court will erase the unsecured debt, including medical bills and credit cards.
Chapter 7 doesn't stop a foreclosure rather postpones it. You can only file under the chapter once the bankruptcy court decides you are struggling to pay back your debts. The court's decision depends on a test whereby they compare your income with Los Angeles County average and then consider your financial status to know if you are financially stable to pay back your creditors. You will qualify for chapter 7 bankruptcy if your income is too low.
After filing for Chapter 7 bankruptcy, the California bankruptcy law requires you to show up in a creditors meeting. At the meeting, the creditors are allowed to ask you several questions about your finances and debts. Additionally, chapter 7, bankruptcy information, will remain on your credit record for ten years. Moreover, the law won't allow you to file for chapter 7 within eight years. Speak with a West Hills bankruptcy lawyer to evaluate whether you may file for the chapter.
Chapter 13 and 11 bankruptcy are similar. However, the chapter is for individuals. Under chapter 13, the bankruptcy court approves a repayment plan for paying back portions of your unsecured and secured debt for a period of up to five years. The monthly payment depends on the amount of your debt and your annual income. Additionally, the court places you on a strict budget. Chapter 13 bankruptcy may stop the foreclosure and give you enough time to update your mortgage. Upon filing your bankruptcy, your first repayment per the plan is a month from the filing date. Speak with a West Hills bankruptcy attorney to evaluate whether you can file for bankruptcy under the chapter.
The chapter is for reorganizing corporations or businesses. A corporation or business comes up with a plan to pay their debts as they still operate. Notably, both the creditors and the court must approve the plan. People like real estate investors with huge debts may file a chapter 13 bankruptcy. Under the chapter, you remain with your assets as you operate under the California bankruptcy court supervision. A trustee may be appointed when your management is less than ineffective.
Upon fulfilling the terms of your plan, the remaining debts will be discharged. Chapter 11 will benefit you in various ways, including lower interest rates and monthly payments. However, before filing for bankruptcy, you need to analyze and explore your business's available options about the debts.
Chapter 12 Bankruptcy
The chapter is a repayment plan for fishermen and farmers. It allows them to restructure their finances to avoid foreclosure or selling their property. Under the chapter, you will remain with your properties and schedule a repayment plan.
You may file for the chapter if you are a family farmer or fishermen with a regular family income. Notably, the regular annual income may be seasonal, but it should be stable for you to make repayment plans under chapter 12 bankruptcy. The debtors may be single or married, corporations or partnerships.
Alternative to Filing Bankruptcy
Despite the huge debts you have, you can still avoid bankruptcy. Notably, You should understand the best available option before you declare bankruptcy. The following are the common alternatives to filing bankruptcy:
Have a Budget
Under Chapter thirteen, the California Bankruptcy court will put you on a strict budget and monitor your spendings. However, the fact is you can do the same without declaring yourself bankrupt. By preparing a budget for your income, you will cut off all the unnecessary spendings to pay off your debts. Therefore make a budget for your income before the government plans to control your financial expenditure for five years.
Observe Necessities First
Before planning anything, ensure you cover the following: shelter, transportation, food, and utilities. It would be challenging to fight your debts without shelter or food. Therefore ensure you place your family and life first. Notably, collectors may come later.
Have a Plan
Are you aware that you will be expected to undertake a financial course before the bankruptcy court discharges your debts? This is due to the increasing number of debts among many people in the San Fernando Valley. You need to pay back your debts for a bright future. The plan is cheaper than the fee paid in bankruptcy courts.
Sell Your Stuff
You may sell anything of value, like your boat or anything that has a motor. Notably, you may sell anything which is not a basic need. For instance, you may sell jewelry, collectibles, furniture, or anything you don't need. Seems extreme? Then the bankruptcy court does the same when you file for bankruptcy.
Boost Your Earnings
Your wealth is one of the best tools for fighting your debt. Notably, making more money increases the chances of clearing your debts. Therefore you may work for extra hours or pick up a second job. Although it might be exhausting, your sacrifice is essential in handling your debts.
What are The Bankruptcy Exemptions?
California bankruptcy laws allow people who declare bankruptcy to retain their necessary property. This is because they will require a fresh start when their bankruptcy period is over. The assets are exempt property. The exempt property upon filling a West Hills bankruptcy are:
- Health aids
- Motor vehicle
- Cemetery and burial plot
- Household items and jewelry
- Personal injury and wrongful death necessary for support.
Benefits of Filing for Bankruptcy
Bankruptcy is a legal process that has several benefits to both the debtor and the creditor. The following are the common advantages arising from filing for bankruptcy:
Automatic Stay Against Your Creditors
After filing for bankruptcy, the bankruptcy court will issue you with an automatic stay, and no creditor will carry out debt collection activity against you. The court doesn't cancel your debt. Instead, it suspends all debt collection activity against you until the bankruptcy case is over.
Sometimes bankruptcy courts may cancel or discharge your responsibility to repay your debts. Notably, under California laws, a dischargeable debt is the one excluded by the court. They constitute utility bills, credit card debts, or personal loans.
- Despite bankruptcy information remaining on your record for up to ten years, once dischargeable debts are canceled, you will move forward with a clean slate and start rebuilding your credit.
- Bankruptcy exemptions will allow you to keep your property ownership after bankruptcy.
Disadvantages of Declaring Bankruptcy
Like any other legal process, filing for bankruptcy has shortcomings for both the creditor and the debtor. The following are the potential disadvantages of declaring bankruptcy:
- Non-dischargeable debts won't be discharged by bankruptcy.
- Federal, state, and local tax refunds may be denied because of bankruptcy.
- It has an impact on your credit score. For instance, chapter seven bankruptcy information will remain on your credit score for ten years, while chapter thirteen remains for seven years.
- You may lose real estate and property.
- Loss of credit cards
- Filing for bankruptcy may make it difficult to obtain another loan or mortgage for several years.
Discharging from Bankruptcy
After receiving the discharge order, you are no longer legally required to make payments for the specified debts on order. The creditors on the discharge orders are not legally allowed to conduct any collection exercise once the order is in work.
Notably, not all debts will qualify for discharge. For instance, the following debts won't qualify for discharge tax claims, personal injury debts, alimony payments, child support, and government debts. Additionally, any secured creditors may enforce a lien against the debtor's property provided the alien is valid.
Discharge of chapter 7 bankruptcy is often granted after four months after the debtor filed for bankruptcy. However, for the other types of bankruptcies, the discharge may happen when it becomes applicable.
Find A West Hills Bankruptcy Attorney Near Me
According to the California bankruptcy law, various bankruptcy cases are different. Declaring bankruptcy may work for one person but fail to benefit you. A particular chapter may have benefited another person, but a different one suits your case. Without consultation from a bankruptcy lawyer, you may find it challenging to discover the chapter that suits your case.
Therefore you should seek advice from an experienced bankruptcy attorney to evaluate your situation and provide legal advice. Additionally, you may find other options apart from bankruptcy, which can work for your case.
At Los Angeles Bankruptcy Attorney, we are determined to help you file for bankruptcy and provide a guide towards a bright future free of debts. Call us today at 424-285-5525, and our bankruptcy attorneys will offer you legal assistance.