Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is typically considered as an option of last resort, because while it can stave off financial disaster, it has some substantial long-term consequences warranting careful consideration of the costs and benefits. Bankruptcy is governed by federal law, and proceeds in federal courts. So, the procedure for filing for bankruptcy in California will be very similar to the procedure anywhere else in the U.S. However, individual bankruptcy courts have different rules for exemptions, so it might be a good idea to consult with a local attorney in Anderson, California before filing.
Chapter 7 Bankruptcy in Anderson, California
There are 2 typical types of bankruptcy in Anderson, California. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is excused. Fortunately for debtors, many types of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.
Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is excused. But some types of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Anderson, California debts are not dischargeable, you might want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Anderson, California
Chapter 13 Bankruptcy in Anderson, California is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each distinct case. Chapter 13 does not excuse debt, but restructures it instead. Typically, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is typically manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Anderson, California
The answer to this question depends heavily on your distinct situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.
In any case, you should talk with a local Anderson, California bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely result. This will make it much easier for your to make an informed choice.