Personal and Business Bankruptcy Options
Filing bankruptcy is not something that should be taken lightly. We know that you have given a great deal of thought to this process. After weighing the pros and cons, you have managed to locate this website. Allow us to allay your fears and demystify the process. We will cover the various types of bankruptcies available. You will learn which assets are included in bankruptcy and which are not. Most importantly, you will discover how bankruptcy can help. Bankruptcy is a legal process granted to businesses and individuals throughout the state of California. It is not necessary to suffer under a mountain of debt when bankruptcy is available to you.
Types of Bankruptcies
There are three types of bankruptcies. Depending on your status, you may file for either one. Individuals may file Chapter 7 and 13. Sole proprietorships are eligible to file for Chapters 7, 11 and 13. Corporations can file for Chapters 7 or 11. Chapter 7 accounts for 65% of all bankruptcies filed within the state of California. Under Chapter 7 bankruptcy, the bank liquidates your assets then distributes the proceeds to creditors on your behalf. The entire process is relatively quick. It is completed within 90 days. The court grants you legal protection from being sued and you can move on with your life or business as usual.
How Bankruptcy Can Help You
Stop repossession immediately with bankruptcy. If you are several months behind on your auto payment and the lender has been threatening to repossess your vehicle, bankruptcy can help. Once the initial paperwork is files, an immediate stay is granted by the court to cease and desist from repossession attempts. Bad things happen to good people. If you have stumbled upon hard times and are unable to keep up with your house note, bankruptcy can stop foreclosure on your home. After the bankruptcy process is completed, you will be able to purchase a new home in 2 years. You are able to purchase a new vehicle, more to your liking immediately after filing bankruptcy. Life doesn’t end once you file for bankruptcy.
In Chapter 7 bankruptcy, the bank liquidates your assets, then pays back creditors on your behalf. If you file for Chapter 11 bankruptcy, the company’s assets are seized, sold and funds are then distributed to your creditors. It’s important to know what constitutes an asset within the state of California. Assets are defined as vehicles, property, jewelry, machinery and equipment. A bank cannot possess clothing, beds, heirlooms and refrigerators. While it is in the best interest of everyone involved that your debts are settled, public policy stipulates that an individual should not be impoverished as a result. Many corporations continue with business as usual after filing for bankruptcy.
Chapter 13 Bankruptcy
This type of bankruptcy is also known as reorganization. A single creditor purchases all of your debt then negotiates with you to pay back all of your debt at a reasonable rate and time. Debts must be settled within three to five years. Records of a Chapter 13 bankruptcy will remain on your credit report for seven years after debts have been repaid. If there is debt remaining after the pre-designated amount of time allotted, it gets wiped out. This is a relief for anyone laboring under a mountain of debt. There are no new financing options while enrolled in the Chapter 13 plan.