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 a creation of federal law, and goes through federal courts. Therefore, the procedure governing bankruptcy in California will be roughly the same as it is anywhere else in the U.S. But individual courts have different rules for what property is exempt, so you should consult a local Lodi, California before you file.

Chapter 7 Bankruptcy in Lodi, California

There are 2 typical forms of consumer bankruptcy in Lodi, California: Chapter 7 and 13. Chapter 7 requires that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many types of property are exempt, and do not need to be liquidated, such as cars, homes, insurance policies, and retirement accounts.

Once the non-exempt property is sold, the rest of the dischargeable debt is absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Lodi, California is not dischargeable, Chapter 7 may not be the best option.

Chapter 13 Bankruptcy in Lodi, California

Chapter 13 bankruptcy in Lodi, 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 adjusted payment plan, which allows the debtor to pay off most or all of his debts over a 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 Lodi, California

This depends entirely on the facts of your specific case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.

Regardless of your situation, you should speak with an attorney in Lodi, California who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.