When you’re not being able to pay your debts, that is when you file for bankruptcy. This is needed in order for you to start fresh and discharge them. Like many different states, California also has its laws associated with bankruptcy. However, you need to make sure that you are aware of the consequences that can result from bankruptcy.
To give you more idea about how bankruptcy works, you basically try to get the debts or get rid of them in this process. Basically, it is the one that you owe to your creditor. There are different chapters in bankruptcy that can help you to manage your debts.
You can even come out by having no debts at all. Chapters 7, 11, and 13 are among the common ones. They all have different options for debtors. It’s a means for the debtors to pay off their debt by using various methods.
Chapter 7 is considered to be the most used and most common. While there are other chapters as well, these three are considered to be the most common ones. If you are facing difficulty with bankruptcy, contacting bankruptcy laws in california can help significantly.
What is the cost you pay in bankruptcy?
As mentioned above, bankruptcy comes with its costs and consequences. For example, if there is bankruptcy, you will find it difficult to get any loan or even have a credit card, or even if you’re planning to mortgage a property, that is not going to be possible for you.
What are the steps involved in bankruptcy?
There are several steps that are included in bankruptcy. Let us briefly discuss them below:
- Getting in touch with an attorney:
If you are planning for bankruptcy, the first step would be to get in touch with a qualified attorney and somebody who has years of experience in the area. While you do have an option to file bankruptcy without an attorney, it is advisable that you hire one.
This is simply because bankruptcy, as discussed before, has its consequences, and in order to deal with them efficiently, a lawyer can help. They have the knowledge of the legal complications that may arise in the future.
Furthermore, they can also suggest which filing to choose or to go for their different chapters, chapter 7, chapter 11, etc. They can tell you which one would be the right one for you based on your situation.
- Going or attending counseling:
In order to file for bankruptcy, you need to see a counseling committee, which is approved by the United States Department of Justice. If there are any alternatives that can be given to you instead of bankruptcy, the counselor will help you choose from them and select one. They will also advise you on the budget plan that will be suitable for you.
- Listing the money you owe:
The next step is to list the debts that you owe. There is either secured debt or unsecured debt. Any loan that was taken for a car or mortgage usually comes under the secured debt. Medical bills or debt associated with your credit card comes under unsecured debt.
- Discharging:
When your debts are discharged by the court, you do not owe any debt anymore, and you are not liable for anything either. In such cases, creditors do not have any right to ask for any payment or money from you. They cannot even contact you. They have no right to ask you for anything.
Want to file for bankruptcy? Check with your lawyer!
Before you make any decision, it is always better to have an attorney’s advice. You are on such matters, and an attorney can tell you if bankruptcy would be the right option for you.
If there are any other alternatives that you can go for, they would instead ask you to pursue them. It is simply because of the consequences that follow bankruptcy.
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