Understand the Bankruptcy Law with the help of Bankruptcy Lawyer San Diego

Understand the Bankruptcy Law with the help of Bankruptcy Lawyer San Diego

Bankruptcy is a legal procedure that is carried out by individuals or businesses that cannot pay their debts and want to get their debts discharged or reorganized by the bankruptcy court. A bankruptcy filing can be initiated by an individual or a business or even a creditor or a court of law. All these things can be quite complicated for first time filers, so a bankruptcy lawyer San Diego can come in quite handy for your problem.

Today, we will help you understand the bankruptcy law better and help you gain some information on what it is and what you can do if you are considering filing for bankruptcy.

These are some terms that you should know in bankruptcy law:

Bankruptcy Petition – The document that is filed with the US Bankruptcy Court that starts the bankruptcy proceedings which contains the debtor’s debts and assets and other liabilities which they may have.

Chapter 7 Bankruptcy – This is a common type of bankruptcy which is filed under the Ch. 7 of the U.S. Bankruptcy Code for an individual to liquidate their assets and settle for the discharge of debts.

The bankruptcy court assigns you a trustee who will evaluate your assets and also oversee your case and can also sell your non-exempt property. With a priority ranking system, the bankruptcy trustee will distribute the sales to the creditors. A Chapter 7 bankruptcy won’t help discharge all your debts aka. Non-dischargeable debts such as:

  • Child Support and Alimony
  • Income Tax
  • Student Loans

All individuals and businesses can file for a Chapter 7 bankruptcy. This type of bankruptcy usually lasts around 4-6 months.

Chapter 11 Bankruptcy – This type of bankruptcy is filed under the Ch. 11 of the U.S. Bankruptcy Code for a business to reorganize its assets and liabilities and also settle its debts. A business can file for a Chapter 11 voluntarily or even involuntarily forced to file for a Chapter 11 bankruptcy.

Chapter 12 Bankruptcy – This Chapter is similar to a Chapter 13. However, you can only file for a Chapter 12 bankruptcy when your income comes from a farm or a fishery. A bankruptcy lawyer in San Diego can help you with this. Most farmers or fishermen can’t qualify for reorganization of debts under Chapter 13 bankruptcy because of low debt and Chapter 11 as it can be too expensive.

This is why congress created the Chapter 12 bankruptcy which applies solely to farmers and fishermen whose total debts secured and unsecured must not exceed $4,153,150 for farmers and $1,924,550 for fishermen.

Chapter 13 Bankruptcy – Under the Ch. 13 of the U.S. Bankruptcy Code, a debtor will ask the court to grant them additional time for the debtor to pay off their debts as long as the debtor is earning a steady income.

Unlike a Chapter 7 bankruptcy, none of your assets will be sold. Instead, your case will be assigned a bankruptcy trustee who will distribute the money with the priority of creditors. You are given 3-5 years to repay your debts. A Chapter 13 bankruptcy allows a flexible repayment period and also allows the debtor to pay a less amount to unsecured creditors. A Chapter 13 bankruptcy will stay on the credit report of the debtor for even a decade. However, a credit bureau can remove the report after 7 years if the debtor was given a discharge.

Bankruptcy Discharge – The bankruptcy court releases a debtor from their liability to pay a debt. In simple terms, the debtor is no longer required to pay the debts that are discharged by the bankruptcy court.

The discharge is an order by the bankruptcy court, so the creditors cannot take any action against it such as pressurizing the debtor with calls, emails or any other ways.

When is the right time to Declare Bankruptcy?

A common question among people who cannot pay their debts is when you should declare bankruptcy. As each individual’s and business’s situation is unique. These laws exist to help people who have no other choice than to accept their situation and file for it. If you think that there are no other alternatives, you can go ahead and declare bankruptcy.

Final Thoughts

Bankruptcy is a legal process that can be a boon or a bane depending on your situation. Regardless of your situation, if you don’t have any choice but to file for bankruptcy, you need to get the help of a Bankruptcy lawyer in San Diego CA to help you with filing and also giving you the necessary tips to prepare yourself for bankruptcy.

An experienced bankruptcy lawyer that has handled a lot of cases is much better to advise you and safeguard your assets and resolve all the other aspects of your case.

What is Chapter 7 Bankruptcy? How can a Bankruptcy Attorney San Diego Help You?

What is Chapter 7 Bankruptcy? How can a Bankruptcy Attorney San Diego Help You?

Filing for bankruptcy is a great way to get back on your feet if you are deep in debt. When you have to choose between paying your debt off or taking care of your family, a Chapter 7 bankruptcy is a great choice for you.

If you take the help of a bankruptcy attorney San Diego, you can get in control of your organization and get a fresh start in your life. If your case is filed without any flaws, you will get in and out of bankruptcy in a span of 90 days. An experienced Chapter 7 bankruptcy attorney will walk you through the bankruptcy process and guide you through the whole bankruptcy.

What is the Chapter 7 Bankruptcy Process?

In order to qualify for a Chapter 7 bankruptcy process, you need to complete a bankruptcy petition and several bankruptcy schedules that overlook your financial situation.

The schedules should disclose all your financial records which are:

  • Income
  • Debts
  • Assets

And other important financial records. If you hire an experienced bankruptcy attorney, your bankruptcy will go as smooth as possible. You will make one appearance for the meeting of creditors with your attorney and then after 2 months later, you will get a discharge of your debts and your case will be over.

The Automatic Stay

As soon as you file for bankruptcy, the bankruptcy court will order an automatic stay on all your debts until your bankruptcy is over. These include, any foreclosure that was in process, creditor lawsuits or wage garnishment, repossession of assets, tax collection to be put on hold.

This can be a big thing for debtors as they are rid of harassment and pressure from their creditors.

Do You Keep Your Assets?

If you can exempt all your equity and are regular on your loans, you can keep your hours or car. You will lose the house or the car if you are behind on your loans or cannot protect the equity. When you have secured debts such as mortgages or car loans, if you cannot pay them or have the equity, your trustee will sell them to pay off your creditors.

How Do You Qualify for a Chapter 7 Bankruptcy?

Not everyone can qualify for a Chapter 7 debt discharge. In order to file for Chapter 7 bankruptcy, you need to pass the Means test. The bankruptcy filing depends on how much money you can earn and still file for a Chapter 7 bankruptcy. The income limit depends on the state that you are in. For e.g. If you live in San Diego, your income limits are based on the California median income.

  • If your income is less than the California median income for your household, you automatically pass. If your income is a little higher than the median income, your bankruptcy attorney San Diego CA will still be able to help you.
  • If your income is way higher than the median income, it will be tough to qualify for the means test even with the help of a bankruptcy attorney.

If you do not pass, you will have to file for a Chapter 13 bankruptcy and repay your debts over a long period of time.

Discharge of Debts

After 90 days have passed after you filed the case, a court order known as “discharge” will be given to you to eliminate your debts. This order eliminates the personal liability for debts that you can eliminate your debts.

Which Is The Right Option For You Or Your Business If You’ve Decided To File Bankruptcy In San Diego, CA?

Which Is The Right Option For You Or Your Business If You’ve Decided To File Bankruptcy In San Diego, CA?

Many small businesses find it challenging to survive in times of crisis. The COVID-19 situation in California has forced many organizations to shut down. To get out of debt, San Diego businesses and individuals look for solutions in such times of economic recession. The standard method of debt relief for them is filing for bankruptcy.