Overview

 

Bankruptcy is a process in which consumers and businesses can eliminate or repay some or all of their debts under the protection of the federal bankruptcy court. For the most part, bankruptcies can be divided into two types -- liquidation and reorganization. In California there are four types of bankruptcy cases provided under the law, Chapter 7, Chapter 11, Chapter 12, Chapter 13. Our office concentrates on Chapter 7 and Chapter 13 cases.

 

 

The goal of Chapter 7 bankruptcy is to get rid of most of the debt.  Chapter 7 cases are known as "straight" bankruptcy. In these cases the court may take a debtors non-exempt property to pay a portion of the debt. Under the law, however, the debtor is allowed to keep most of the reasonably necessary property (house, furnishings and appliances, vehicles etc...), unless he or she does not want to keep said property. 

 

 

Chapter 13 allows the debtor with regular income to repay some or all of the debt over a period of time, by proposing a payment plan to repay their creditors. With this bankruptcy case and individual can pay back creditors for pennies on the dollar. Chapter 13 has some advantages over Chapter 7, it allows you to repay debts that are non-dischargeable over an extended period of time, it can also help the individual get current on their mortgage payments so the mortgage company will not foreclose on their house.