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 controlled by federal law, and proceeds in federal courts. So, the process for filing for bankruptcy in California will be very similar to the process everywhere 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 lawyer in Arcadia, California before filing.
Chapter 7 Bankruptcy in Arcadia, California
There are 2 typical forms of bankruptcy in Arcadia, 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 forms 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 forms 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 Arcadia, California debts are not dischargeable, you may want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Arcadia, California
Chapter 13 bankruptcy in Arcadia, California is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 Bankruptcy involves a court setting up a revised payment plan, which allows the debtor to pay off most or all of his debts over an extended period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Arcadia, California
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your distinct situation. If you have a stable income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a stable income, and most of your property is exempt, Chapter 7 might be a better way to go.
In any case, it would be a good idea to consult a local bankruptcy lawyer in Arcadia, California. Your lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).