The bankruptcy procedure is different for Chapter 7 bankruptcy, Chapter 11 bankruptcy, and Chapter 13 bankruptcy. Each of these three most common forms of bankruptcy begins with the administrative task of filling out the appropriate paperwork and submitting said paperwork to the bankruptcy court. Each state has one or more bankruptcy districts, each of which has its own bankruptcy court. Where you file for bankruptcy depends on where you live. Once you have filed for bankruptcy, the court will put a stay on your unsecured debts, protecting you from your creditors while the bankruptcy process moves along.
Chapter 7 Process
During a Chapter 7, you will be required to turn over all of your financial information to the bankruptcy court. The bankruptcy judge will then go over your assets and your debts. In some cases, the judge may liquidate any assets that you have and divide them amongst your creditors according to bankruptcy law. During this process, it’s good to have a San Diego bankruptcy lawyer, such as Attorney Orona, on your side to help protect your valuable property and ensure that you are treated fairly throughout the process.
Once your assets are liquidated and distributed, the judge will discharge your remaining debts. This means that any unsecured debt that you are unable to repay will be erased. Once your Chapter 7 bankruptcy case is finished, your creditors cannot come after you for any of your past unsecured debts. However, a Chapter 7 bankruptcy procedure cannot clear your non-dischargeable debts. This includes alimony, child support, student loan, and tax payments.
Keep in mind, when you file for Chapter 7 you may be required to pass a means test which will determine whether you qualify for consumer bankruptcy protection. If your income level is above a certain point, you may not qualify for Chapter 7. The court will also require you to undergo credit counseling.
Chapter 13 Process
The other common form of consumer bankruptcy is Chapter 13 bankruptcy. Your San Diego bankruptcy attorney will most likely recommend Chapter 13 if you have a steady form of income and have property such as a house or car that you want to protect from liquidation. Through Chapter 13 you can reorganize your debt and create a payment plan that will allow you to repay your debts over the course of 3 to 5 years. There is no means test involved in Chapter 13 bankruptcy.
Chapter 11 Process
Chapter 11 bankruptcy is reserved for businesses. Through the Chapter 11 procedure businesses can reorganize their debt and attempt to keep their doors open while getting control of their finances. The Chapter 11 bankruptcy process revolves around creating a reorganization plan that the business and the business’s creditors can agree to in order to keep the company in operation, improve the company's financial performance, and repay debts the company owes.
Enlisting Help from a San Diego Bankruptcy Attorney
A knowledgeable San Diego bankruptcy attorney can help you understand the ins and outs of California's bankruptcy procedure. With a bankruptcy lawyer on your side, you can get your questions answered, learn about all of your legal options, and have someone advocating for your rights at all times.
If you are ready to initiate bankruptcy proceedings in Southern California, contact Attorney Scott Orona now by calling 619-306-7627. Attorney Orona offers free one hour consultations to those who are considering Chapter 7, Chapter 13 or Chapter 11 to confront their debts once and for all.