Bankruptcy

There are 2 main types of bankruptcies individuals use, Chapter seven & Chapter thirteen. Both give you relief from your debts & a fresh start through discharge, to the court's order terminating your responsibility to pay your creditors the ability to collect.

Chapter 7

Chapter seven is aka "straight bankruptcy," & it's the most common type of cases. Someone who uses Chapter seven has little or no funds available to pay creditors, & discharge applies to most debt. Emissions means to waive or decline your fault.

Key points to know about Chapter 7:

You must qualify to file Chapter seven based on income & means testing set out in the san diego bankruptcy lawyers. If you can afford to pay back a portion of your debt, you may use Chapter 13

Your resources, called nonexempt property may be sold by the trustee to pay your creditors

You keep exempt property, which is protected from creditors' REACH

Chapter seven discharge for most common types of debt, including credit cards & medical bills

Most Chapter seven cases are "no asset", which means there is nothing left to pay creditors after accounting for your property exemptions. State or federal law controls property exemptions, & this is why the california bankruptcy case may be different from state to state.

Chapter 13

Chapter thirteen reorganises your debt: You make full or partial payments under an instalment plan, & the remaining debt is placed on the plan for completion. If you've a certain amount of stable disposable income after paying for basic, Chapter thirteen bankruptcy can only be an option.

Repayment plan is the most important part of a Chapter thirteen case & property exemption laws factor in finding out the repayment plan details.

Here are some common situations behind the Chapter thirteen cases:

You have mortgages or loans you want to stream through the repayment plan, so you can keep the property

Your debts aren't eligible for a Chapter seven discharge, such as taxes, child support or student loans

You are driven to pay off debts with personal values \u200b\u200bor morals

This type of bankruptcy hits a middle ground between you & your creditors. You get some debt relief & some pay the creditors.