Bankruptcy Attorneys in Glendale
The U.S. Constitution gives Congress the authority to make laws for bankruptcy, and bankruptcy laws in the U.S. are nearly as old as the country itself. Some of our nation’s most prominent, illustrious and successful citizens filed for bankruptcy protection at some time during their lives. Bankruptcy laws are here to protect people from financial ruin when their finances have gotten out of hand, whether due to illness, unemployment or overextended credit. Glendale bankruptcy attorneys can help you understand your options for debt relief and provide you with the fastest and best way to regain control of your finances, stop creditor harassment, and rebuild your credit.
There are many different types of bankruptcies available. The most commonly used forms of bankruptcy are Chapter 7 and Chapter 13 for consumers, and Chapter 7 and Chapter 11 for businesses.
Chapter 7 for Consumers
A Chapter 7 straight bankruptcy is often the most attractive option to consumers, because it allows a debtor to basically “wipe the slate clean” and make a new start. In a Chapter 7, your property is sold to pay off your debts, and the remaining unsecured debts are discharged, meaning you are no longer responsible for paying them. California and federal bankruptcy laws allow numerous exemptions that let you keep the property which is most valuable to you. In fact, in most instances, your attorney will be able to obtain a “no-asset” bankruptcy for you, meaning you can get your debt discharged without having to sell any property at all.
Chapter 7 works best for consumers with large amounts of unsecured debt, such as medical bills and credit card debt. Even certain tax debts and student loan debt may be discharged as well. Chapter 7 is “means tested,” so whether you are eligible for Chapter 7 depends upon your monthly household income. If it is too high, you may need to consider Chapter 13 instead.
Chapter 13 for Consumers
A Chapter 13 adjustment of debts is commonly called a “wage earner’s plan,” since it is most attractive to consumers with a steady stream of income. In a Chapter 13, all of your debts are collected in one place and put into a three or five year repayment plan, based upon your monthly income and expenses. Some debts can be adjusted and discharged as part of this process. If you do not qualify for a Chapter 7 because of your income, Chapter 13 may be right for you. Chapter 13 is also helpful if you have a large amount of secured debt and don’t want to put any of your property at risk.
Perhaps most significantly, Chapter 13 can help if you default on your mortgage, and your home is in foreclosure. With Chapter 13, you can stop a foreclosure proceeding in its tracks, roll your missed payments into your payment plan, and get back on track with your mortgage. You may even be able to get a second mortgage entirely removed as part of the Chapter 13 process.
Chapter 7 for Businesses
A company which is going out of business can wind up operations in an orderly fashion through Chapter 7. A Chapter 7 filing puts creditors on notice that business operations are ceasing and generally puts a stop to creditor harassment. A company that wishes to stay in business but cannot meets its debts may find a solution with a Chapter 11.
Chapter 11 for Businesses
In Chapter 11, the company remains active, and the owner retains control as the “debtor-in-possession” while restructuring the company’s finances and reorganizing the business structure in a way that will enable it to function profitably. Creditors are required to submit to a plan approved by the bankruptcy court. A Chapter 11 proceeding gives the business owner that necessary breathing room to develop and implement a practical plan for getting out of debt and on track for profitability.