Bankruptcy
Bankruptcy is a federal court process that can help an individual or business address debts. A debtor usually files the petition, although creditors can start an involuntary case when the Bankruptcy Code’s requirements are met.
Primarily, though, bankruptcy is filed by a debtor strapped for cash. This type of bankruptcy is referred to as a voluntary bankruptcy.
Over 126,000 Californians filed for personal bankruptcy in 2008. While filing for bankruptcy can be distressing and upsetting, it’s important that you understand the process and work with one of the experienced bankruptcy attorneys at the Law Offices of David S. Chesley, Inc.
Bankruptcy is governed by federal law, while state law can affect issues such as available property exemptions. The applicable chapter, debts, assets, and timing all matter. Having the right legal representation can make a significant difference in evaluating a bankruptcy case and its effect on your financial well being.
Types of Bankruptcy
While there are technically six different types of bankruptcies, known as Chapters, the most common forms of bankruptcies include:
- Chapter 7 Bankruptcy, in which the debtor outlines his/her financial situation in a petition to the court. In addition to listing all of his/her assets and income, debtors filing for Chapter 7 bankruptcy also have to list all of their debt and expenses. The timing of a Chapter 7 case can vary.
- Chapter 11 Bankruptcy, which often lets a business reorganize but is also available to eligible individuals. In a traditional Chapter 11 case, the debtor generally has an initial 120-day exclusive period to file a plan; that period can change by court order, and different rules apply to small-business and Subchapter V cases. See the U.S. Courts Chapter 11 guide.
A Chapter 11 plan must meet the Bankruptcy Code’s confirmation requirements, including applicable voting rules and court approval. The process and timing vary by case.
- Chapter 13 Bankruptcy, in which eligible individuals with regular income propose a repayment plan. For cases filed under the current adjusted limits, unsecured debt must be less than $526,700 and secured debt less than $1,580,125; limits are measured when the case is filed and can change. See the U.S. Courts Chapter 13 guide.
A Chapter 13 plan generally provides payments over three to five years. A debtor may keep property while making required plan payments, subject to the case’s terms and the court’s confirmation decision.
Meeting with Our Bankruptcy Attorneys
To ensure that your initial consultation with the esteemed bankruptcy attorneys at the Law Offices of David S. Chesley, Inc. is as helpful as possible, here of some tips on how to prepare for this meeting:
- Fill out all preliminary paperwork, as instructed by the legal staff with whom you set up an appointment. These forms, including tax and income forms, may be available on our Web site.
- Be prepared to talk about any debt you may have, including (but not limited to) credit card debt, medical debts and tax debts.
- Be prepared to list and discuss all of your assets, such as real estate, motor vehicles and lawsuit settlements. All of these will be evaluating for their current value, if they were to be resold, rather than how much you paid for them.
To schedule a private consultation with one of our experienced bankruptcy attorneys, contact us today.
