While bankruptcy is well-known as a helpful financial tool, most of us certainly don’t get to view it as the general cost of doing business, going through it, and then somehow continuing to live like we are in an episode of the rich and famous. For the real people going through bankruptcy, it’s also not the end of the world either, and those in charge of deciding what you keep and get rid of are certainly not as heartless as you might imagine. What you keep and what you let go of in bankruptcy, ultimately, can be completely up to you. While it may seem like you’ve lost control of your finances for the time being, with the help of a good attorney like those at Fitzgerald & Campbell, APLC , you can choose the type of bankruptcy or other financial options that work best for you in the state of California. While bankruptcy laws are the same for every state, some items may vary, like exemptions and the amount of income for qualification.
The first step is to make a comprehensive list of your creditors, unsecured and secured, including of course the major debts like your car and your home. You’ll also have to accept debts that are generally (not always, but generally) nondischargeable, like student loan debts, taxes, and ongoing obligations such as child support, that obviously aren’t going anywhere. Then, in a discussion you may want to have with your attorney, it’s time to decide which type of bankruptcy you want to apply for. The simplest way to look at the differences between a Chapter 7 bankruptcy and a Chapter 13 is that in the first option most likely you are liquidating and leaving with no assets; however, it is less expensive and you will be paying less. The process should be faster, and many may consider it to be less painful overall. This is a choice some may decide on quickly while others will weigh it out; however, the bottom line is you will be exchanging that bankruptcy discharge for, yes, giving up any of your non-exempt property to be sold by the trustee. The Chapter 7 can be completed in as little as three or four months.
If you choose to file for Chapter 13 bankruptcy, described by the US Courts as the ‘wage earner’s plan,’ you are in for the longer haul—not to mention repayment to creditors. This generally takes three to five years, depending on income. In this scenario, however, you are not giving up most of your possessions, although there are exceptions to that in terms of non-exempt material items that you may not have enough in your repayment plan to afford.
Again, while it may feel like money issues have spiraled, causing you to consider filing for bankruptcy, this may be a wake-up call to help you in wrestling back control while you examine your options. Speaking with an attorney from Fitzgerald & Campbell, APLC before making any decisions can help set you on the right track as you explore what action is best for you to take. Our attorneys have decades of experience representing clients in a range of consumer rights matters, to include bankruptcy, and we are here to help you!