There may come a time when you are staring at your financial situation and wonder if there is any way out of the mounting debt. Many people, for various reasons, end up in this situation. A common misconception is that people who file for bankruptcy were just bad spenders. This is not necessarily true. People often find themselves in enormous debt through no fault of their own.
Filing for bankruptcy may be a way to get yourself and your family back on a firm financial footing. At the Hayes Law Firm, APC, we want to talk about the two most common forms of bankruptcy – Chapter 7 and Chapter 13 – and how they work. When you need a Montebello bankruptcy attorney, we are here for you.
Chapter 7 is the most common form of bankruptcy. This option will be the most likely one a person will use when they lack regular income and will see the filer lose more of their personal property than Chapter 13. A means test is required to begin all types of bankruptcy in order to determine if your income level qualifies you for Chapter 7, Chapter 13, or neither.
Chapter 7 bankruptcy is started by filing an official petition with a California bankruptcy court. This will include a statement of all of your finances, including a list of all of your assets and debts. You will also list all of your property, including property you choose to exempt.
Exemptions are the property that the courts have said people get to keep. This property will not be sold and used to pay off debt. This state has two exemption lists. Commonly exempt items include a home, vehicles, pensions, and personal belongings.
This form of bankruptcy is used by those with a regular income and filers will end up paying back a portion of their debt after it has been reorganized. The debt requirements for Chapter 13 are:
Chapter 13 can also help you keep more of your property. This type of bankruptcy allows you to outline a payment plan based on a negotiated settlement with all of your creditors. The total amount that is paid back will likely only be a fraction of what was originally owed. Payment plans usually last for three to five years.
All of your debts are consolidated after a negotiated settlement with the creditors. This means that you will have one payment instead of having to pay each individual creditor. You will pay a trustee and the trustee will, in turn, pay each creditor the agreed upon amount each month.
At the Hayes Law Firm, APC, we are here when you need help getting your debt under control. Our qualified and experienced team is ready when you need a Montebello bankruptcy attorney. You can reach out for a free consultation by clicking here or calling us at 323-477-1415 when you are ready to take the next step.
At The Hayes Law Firm, APC, we serve all of Los Angeles and the Inland Empire, so whether you need a personal injury attorney in Montebello or a premises liability attorney in San Bernardino, we are here to serve you. Unlike other attorneys who view clients as cases, we understand that your experience has a human story behind it, and when you are in our offices, you are like a member of the family. We are ethical and compassionate, and we will take the time to find the best solution for your unique case and will work together with you every step along the way. Contact us today for a free consultation.