Chapter 7 And Chapter 13 Bankruptcy FAQ
Chapter 7 bankruptcy and Chapter 13 bankruptcy are powerful debt elimination techniques. Through Chapter 7 bankruptcy or Chapter 13 bankruptcy, individuals can often eliminate significant amounts of debt or gain other benefits and advantages. In many instances, declaring bankruptcy is a way that an individual can significantly hasten their return to financial health.
However, bankruptcy is complex. The failure to fully understand the steps you must take and the effect of bankruptcy can result in a needlessly complex situation. In some cases, the failure to claim certain relief may mean that it is no longer available. Therefore, it is essential to work with an experienced lawyer who understands the power of bankruptcy and how to apply bankruptcy law to your situation.
The lawyers of The Bankruptcy Group are committed to working with Californians on their debt problems. We always meet one-on-one with our clients and discuss goals before recommending any action. To help you get started on your journey to understanding bankruptcy and whether it is right for you, The Bankruptcy Group has prepared brief answers to some common bankruptcy questions and concerns.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is probably the most common form of bankruptcy. When people think of bankruptcy, it is likely that they are thinking of a liquidation under Chapter 7 of the U.S. Bankruptcy Code. Under Chapter 7, nonprotected property is sold off by the creditor to satisfy the obligations held by creditors. Chapter 7 bankruptcy is the most effective and expedient means of addressing unsecured debts like credit card debt.
What Is Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy likely varies from the picture most people envision when they think of bankruptcy. Under a Chapter 13 plan, the individual agrees to pay back creditors over a three-to-five-year plan. Typically, the person making the payments receives at least some discount on the obligation. Still, all cases give the individual additional time to pay back the debt under the Chapter 13 plan. Furthermore, under the Chapter 13 plan, the individual may benefit from other powers of bankruptcy including the automatic stay. The automatic stay prohibits creditors from engaging in new collection attempts and can provide much needed respite from collection calls.
Is Bankruptcy My Only Option?
Many people become emotionally attached to a particular solution once they begin to look into it. It is essential to weigh all of your options based on their particular merit prior to making a decision. In many cases, bankruptcy through Chapter 7 or Chapter 13 can and does provide real relief from a debt burden. Remember, bankruptcy is only one solution that should be considered. In certain scenarios, mortgage modification or otherwise negotiating with creditors can provide real debt relief.
Can a Bankruptcy Fix a Mortgage Foreclosure?
A strategic bankruptcy may be able to stop a foreclosure. The foreclosure process in California proceeds through nonjudicial means. This means that you will not be summoned to court by a creditor. Rather, you will receive numerous notices and warnings regarding the process. Unfortunately, for many people this means that there is a temptation to delay taking action. To have the greatest chance of protecting your home from foreclosure, it is prudent to speak with an attorney as soon as you receive notice of a problem with your mortgage.
Will I Lose My Home and Property in Bankruptcy?
Many people are worried that they will lose all of their property and assets if they file for bankruptcy. These fears are often significantly overstated. To start with, individuals who declare Chapter 13 bankruptcy typically keep their property unless they have explicitly decided to surrender or relinquish the property. Under Chapter 7 bankruptcy, many people are also able to keep their property. This is because California has two sets of bankruptcy exemptions. “Exempt property” is the property you keep. The first set of exemptions contains a large home equity exemption. The second set of exemptions contains a large “wildcard” exemption.
How Long Does a Bankruptcy Filing Take?
It is important to note that every bankruptcy filing is different. The exact amount of time your filing will take is wholly dependent on the form of bankruptcy, complexity of the bankruptcy, and how the trustee and bankruptcy courts handle your matter. We can say that Chapter 7 filings are completed, on average, much more quickly than Chapter 13 filings. A Chapter 7 bankruptcy can be completed in several months, although six months to a year is more reasonable. By contrast, a Chapter 13 bankruptcy plan will last from three to five years.
Find Out If Bankruptcy Is Right For You With An Experienced Sacramento Bankruptcy Lawyer
Determining whether bankruptcy is right for you is a complex and difficult decision. However, for many people the decision to file bankruptcy is the first step towards correcting debt problems and achieving financial health. The bankruptcy attorneys of The Bankruptcy Group can help you determine if bankruptcy is right for you. To schedule a free and confidential legal consultation at our Roseville or Folsom law offices, call us at 888-710-4334 or message us online today.