Filing for Bankruptcy

Chapter 13 bankruptcy in California

Consumer bankruptcy can help an individual resolve debt under federal court protection. While most filers wish to wipe their debts out, different bankruptcy types are suited for other circumstances. Filing for bankruptcy is not easy, but it can open up a lot of opportunities.

If you plan to file for bankruptcy or require preliminary bankruptcy information on how to file, give us a call. Knowledgeable and hardworking Pasadena bankruptcy attorneys can answer your questions about the legal process of filing bankruptcy.


Chapter 7 and Chapter 13 Bankruptcy Cases

Many debtors look into filing a bankruptcy petition to benefit from bankruptcy protection, which protects you from collection calls from creditors and harassment from debt collectors. In general, the automatic stay can also help you stop wage garnishment and stop foreclosure or repossession of your home, car, or other personal property. Due to many factors, however, every bankruptcy petition is unique.

A Chapter 7 bankruptcy case, for instance, will likely have your unsecured debts (such as personal loans, medical bills, credit card bills, and other loans with no collateral involved) forgiven or discharged. A Chapter 13 petition for bankruptcy, meanwhile, will allow you to restructure or reorganize your finances. Proceeding with restructuring enables you to bring current payments for secured debts. A seasoned bankruptcy attorney in Pasadena can further explain the differences between these two.


Choosing the Most Appropriate Bankruptcy Proceeding

In general, Chapter 7 is best for bankrupt individuals with a few assets whose problem debts include credit card debts, medical bills, payday loans, or other debts that the discharge may wipe out. It is also applicable for filers whose problem debts exceed two-fifths of their annual income and cannot, therefore, pay off debts even with extreme measures.

However, before you can file Chapter 7 bankruptcy forms and paperwork, you must first pass the bankruptcy means test (which covers your assets, monthly income, and living expenses). A bankruptcy trustee will then facilitate the meeting of creditors, sell your nonexempt assets, and pay creditors in a manner according to the bankruptcy code.

On the other hand, if you have a lot of assets, generally dealing with secured debt, or if it would be possible for you to pay back some of what you owe to your creditors, a Chapter 13 bankruptcy petition may be a better option. Credible Pasadena bankruptcy lawyers can look into your specific circumstances and help you decide on the debt relief option or filing chapter that is most suited for you.


Working on a Chapter 13 Petition for Bankruptcy

Filing for bankruptcy and proceeding with restructuring will enable you to bring current payments for secured loans. This can stop foreclosure or repossession of collateral (such as your home, car, or other personal property), which is a common reason people opt to file for bankruptcy under Chapter 13.

If you filed for bankruptcy under this chapter, you would be given a repayment period of three or five years. Under pertinent bankruptcy laws, however, not everyone can proceed with filing Chapter 13. It is, in fact, sometimes referred to as wage earner bankruptcy because a low-income earner may not be qualified to file.

Before declaring bankruptcy under this chapter, your monthly income must be regular, and your tax filings must be current. No Chapter 13 must have been filed in the last two years, no Chapter 7 filing must have been filed in the last four years, and no bankruptcy petition must have been dismissed in the last 180 days (for failure to appear in court). Additionally, the total secured debt must be less than $1,184,200, and the total unsecured debt must be less than $394,725.


On Discharged Debt and Your Credit Score

It is almost impossible to find someone who dreams of declaring bankruptcy for debt relief. However, if you are struggling financially, considering bankruptcy could be the best (or even only) option for you. Through the different bankruptcy chapters, countless people who were once bankrupt eventually had a fresh start in life.

What repels most people from bankruptcy proceedings is that they stay on your credit report for up to ten years. Indeed, filing for bankruptcy will affect your credit reports. However, rebuilding credit after bankruptcy is not as difficult as it sounds.

Filing for bankruptcy erases most of your unsecured debt. While recent tax debt, criminal fines and penalties, student loans, alimony, and child support are generally not dischargeable, a bankruptcy declaration can enable you to repay these debts on time.


Seek Legal Help from a Reliable Pasadena Bankruptcy Attorney

If you are facing financial problems, promptly seek legal advice. Pasadena Bankruptcy Law specializes in the different types of bankruptcy filings and what filers can do to maximize their gain. A dedicated and hands-on Pasadena bankruptcy lawyer like Daniela Romero will gladly assist you with any legal matters concerning bankruptcies. Call our Pasadena bankruptcy law firm today.