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Bankruptcy consultation Culver City in California to help you get rid of outstanding debts

Not withstanding two decades of uninterrupted growth, bankruptcy filing in the USA has quintupled, with 1.5 million individuals filing for it annually. Bankruptcy law in the US has been enacted to solve three basic purposes:  

  

  • To solve a collective action problem among creditors dealing with an insolvent debtor  

  •  To provide a fresh financial start to an individual debtor with unmanageable debt  

  

The US Bankruptcy Code also deals with bankruptcies by firms in financial distress, and has provisions to save and preserve the going concern value of firms in financial distress by reorganizing their debts.  

Bankruptcy law is complex, the judicial process is initiated by filing a petition in the appropriate federal bankruptcy court. The Bankruptcy Code is divided into several chapters; Chapter 7 and Chapter 13 deal with bankruptcies filed by individuals. Chapter 7 provides for liquidation of assets of the debtor while Chapter 13 contains provisions for individuals with income. Given the complexity of the bankruptcy law, most individuals seek bankruptcy consultation Culver City, California, to navigate the process with confidence.   

  

Voluntary filing for Chapter 7 Bankruptcy   

  

Chapter 7 allows for the collection of assets of the debtor that are not exempt by a court-appointed trustee who will allocate the proceeds from the sale of assets to the creditors in the order of preference. As you will be informed during your bankruptcy consultation Culver City by your lawyer, secured debts which are backed by collaterals are discharged first, followed by unsecured debts. Not only individuals, business entities, corporations, and partnerships can seek relief under Chapter 7.  Specialist bankruptcy lawyers at Recovery Law Group can help you file a voluntary petition under Chapter 7.  Involuntary petition may be filed by creditors to force the debtor to declare bankruptcy.    

  

Means Test for Chapter 7 Bankruptcy   

  

Certain debts are exempt under Chapter 7, such as taxes on property and arrears, student loans, and child support. All debts after the completion of Chapter 7 bankruptcy are discharged. However, as you will be told during your bankruptcy consultation Culver City, you will have to pass the Means Test to qualify for Chapter 7. To pass the test, your average monthly income for the past six months should be less than the median income of the size of your household in California.   

  

Reorganization plan under Chapter 13 Bankruptcy   

  

If you fail to pass the Means Test, your Recovery Law Group’s specialist lawyer providing you with bankruptcy consultation Culver City will advise you to file for it under Chapter 13 wherein you will be given three to five years of time to repay all your outstanding debts. Your income will be considered while formulating the repayment plan. Chapter 13 will halt debt recovery proceedings like foreclosure and discharge the liability over some time. The Chapter also has a special provision to protect co-signers or third parties. An individual with unsecured debt of lower than $394,725, and secured debt lower than $1,184,200 can apply for bankruptcy under Chapter 13.     

  

Your case will be handled only by an experienced attorney at every stage of the process. This personalized approach to bankruptcy consultation Culver City by Recovery Law Group ensures responsive communication and the best outcome for your specific situation.   

 

 

 

 

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