Many credit card companies tell consumers that bankruptcy only happens to people who have no control over their spending, making them misuse their credit cards, but this is pure myth. Bankruptcy lawyers can attest to that, having clients who have filed bankruptcy cases for various reasons. A debtor can come from a wide range of demographics.

Financial problems can happen to anybody. Debtors in dire need of debt relief usually file for bankruptcy because of unfortunate circumstances beyond their control, like job loss, business closure, accident, divorce, or illness. For those in financial distress, filing bankruptcy with a United States bankruptcy court is often the answer for them to get out of debt.

Declaring Bankruptcy

Filing a bankruptcy petition is a means provided by federal law to help individuals and businesses to financially start anew by reducing if not altogether eliminating their debts. Most debts go away through the bankruptcy discharge, but certain debts simply aren’t dischargeable, like in the case of child support.

California Bankruptcy BasicsBankruptcies are tackled in the bankruptcy code, which presents different types of bankruptcy. Filers who want to file under a personal bankruptcy chapter have two main options. The first is Chapter 7, also known as liquidation bankruptcy or the “Big Eraser.” The other is Chapter 13, which is all about debt reorganization and is often regarded as a forced repayment plan.

Chapter 7 is for those who want to quickly eliminate most of their debts, but they have to pass a means test to be eligible to file bankruptcy under this chapter. Chapter 13 takes longer but it does allow debtors to hold on to their property while they pay back their debts. In a Chapter 13 bankruptcy case, debtors make payments depending on what they can afford to pay and not on how much they owe.

Integral to the bankruptcy process is the advantage of the automatic stay or stop. Such bankruptcy protection gives debtors some peace and rest from their creditors. When a debtor files for bankruptcy court protection, collection agencies must stop hounding him or her with debt collection efforts. This means that a creditor may no longer pursue wage garnishment, foreclosure, tax levy, or any other form of collection.

When filing for bankruptcy with a secured debt that has pledged property as collateral, e.g. a mortgage or a car loan, the filer must continue to pay or the court will order that the property be turned over.

There are also bankruptcy exemptions to consider, but these along with actual bankruptcy laws differ from state to state. For this reason, it’s best to consult a local lawyer specializing in California bankruptcy law.

Considering Bankruptcy? Contact a California Bankruptcy Attorney Today!

Bankruptcy filings have long solved people’s financial woes. For correct bankruptcy information and legal advice throughout the length of bankruptcy proceedings, from the time before filing all the way to the time after a bankruptcy discharge, consult an experienced bankruptcy lawyer. Even filling out bankruptcy forms can be an involved undertaking, which makes the legal assistance of bankruptcy lawyers absolutely invaluable.

A bankruptcy filing may come with stigma and often be considered the last resort, but it does wipe out the debt. It’s best that you speak with a lawyer to determine the most fitting solution for your situation. Call us at Pasadena Bankruptcy Law to speak with one of the area’s most experienced bankruptcy attorneys.