Bankruptcy can provide you with much-needed relief in times of financial distress by either eliminating your debts, or providing you with a restructured plan for debt repayment. Though you will get rid of your debt but not without some serious consequences, it may remain on your credit report for 7 to 10 years, and a co-signer may be responsible for paying at least some of the debt. Moreover, not all of your debt can be eliminated, and you may not necessarily get a clean slate.
However,
if your debts have become overwhelming, and you are unable to repay them under
your current circumstances with your best efforts, you may consider filing for
bankruptcy. Most individual bankruptcies in the US are filed either under
Chapter 7 or Chapter 13 of the US Bankruptcy Code. Under Chapter bankruptcy, a
trustee will be appointed by the federal court to liquidate your nonexempt
assets to pay creditors. There are priority rules for paying the debts. The
applicant filing for affordable
bankruptcy California will have to complete several forms, including a
petition to the court. For this, you can take the help of expert attorneys,
such as the ones available with Recovery Law Group, who can help you file
details of the debtors’ finances, incomes, expenses, and assets.
Automatic
stay on creditors collection activities
The
lawyer working with you for affordable bankruptcy California will ensure that
your creditors do not harass you once bankruptcy is filed. This happens due to
the Automatic Stay that automatically becomes enforceable as soon as you file
for bankruptcy. Automatic stay will prevent your creditors to stop all
collection activities immediately, including making you phone calls, sending
you emails or text messages, visiting your premises or office, or calling your
family members or colleagues. The bankruptcy court will appoint a trustee to
oversee your affordable bankruptcy California process, and determine which
assets can be liquidated to repay. The trustee can also schedule meetings with
your creditors, where the validity of your petition and finances is confirmed.
Means
Test for Chapter 7 Bankruptcy
To
qualify for Chapter 7 bankruptcy, you must qualify a Means Test. To pass the
test, your average monthly income for the past six months of the size of your
family should be less than the average median income in the state of
California. However, if you fail to pass the Means Test, your Recovery Law
Group’s providing you with affordable bankruptcy California can suggest you to
file for bankruptcy under Chapter 13. Under Chapter 13, you will be given the option
to repay your outstanding debt over a period of three to five years. It will
help you save your house and car, and also wage garnishments by the
creditors.
Repayment
plan under Chapter 13 bankruptcy
You
will also have to attend a credit counseling course at least 180 days before
filing for Chapter 13 bankruptcy, from an agency approved by the Department of
Justice U.S. Trustee Program. Your monthly Chapter 13 payments will begin from
the month you file. If the bankruptcy doesn’t confirm your plan, the trustee
will refund your payments. Once you make all the payments, any remaining debts
will be discharged or eliminated. However, in order to discharge your remaining
debts under Chapter 13, you must make all payments, be current on child support
and alimony obligations, and complete a debtor’s education course.
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