Bankruptcy is a difficult prospect to consider and should not be undertaken without consulting a reputable, experienced attorney. Brent George Law can provide you with a specialized bankruptcy attorney in Thousand Oaks to help you better understand your options. If you’re having difficulty meeting your financial responsibilities, you could qualify for Chapter 7 or Chapter 13 Bankruptcy.
Chapter 7 Bankruptcy
This is probably the most familiar and most common type of bankruptcy proceeding. In Chapter 7 bankruptcy, your non-exempt assets are liquidated and proceeds used to pay creditors. Once those proceeds have been distributed, whatever debt that remains is eliminated. You get to decide which assets are exempt from liquidation, which means you can retain possession of your home and vehicle to assist you in starting over; however, protecting your home and vehicle from liquidation does not automatically protect them from bank foreclosure and repossession for missed payments. Also, there are some debts that cannot be covered by filing for Chapter 7 such as homeowner’s association fees, non-dischargeable taxes, court fees and debts from marriage settlements. Chapter 7 bankruptcy is usually pursued for these reasons:
- It isn’t possible to repay debts over a 3-5 year period
- Debt relief can be achieved quickly (in as little as 3 months)
- Filers can be freed from personal liability for dischargeable debts such as credit cards, medical bills and personal loans
To qualify for Chapter 7 bankruptcy, you must meet a means test that requires your monthly income for the last six months to be less than or equal to the median monthly income in the state.
Chapter 13 Bankruptcy
Under Chapter 13 bankruptcy, a monthly payment plan is established based on the amount of disposable income available to the filer. Payments are made to a trustee who then disburses the money to the creditors and are generally spread over a 3-5 year period. This is the next option for individuals who do not meet the means test for Chapter 7. There are many reasons people file for Chapter 13 bankruptcy.
- Monthly income exceeds median state average
- Debtor has disposable income and wishes to repay debts
- Home foreclosures and vehicle repossessions can be stopped
- Maintain possession of non-exempt property
- Co-debtors are protected from liability for joint debt
Whether your debt is a result of an economic downturn, the rising cost of living, a debilitating injury, or an unexpected illness, Brent George Law will help you get back on your feet.