Chapter 7 and Chapter 13 Bankruptcy in Los Angeles
The decision to file bankruptcy can be a daunting one. It may be something you have avoided for years, feeling bankruptcy would destroy your credit past the point of repair. Perhaps the different types of bankruptcies available have left you feeling utterly confused and not sure of what to do. That is when a Los Angeles bankruptcy attorney comes into play. He or she will use their knowledge and experience to guide you through this often-complicated process and make sure you understand what bankruptcy option is best for you.
The most common bankruptcy types filed in the United States are Chapter 7 and Chapter 13 bankruptcies. A good Los Angeles bankruptcy lawyer will go over your personal financial data and situation and will explain to you what these two options entail and also which one he thinks will suit your needs. Chapter 7 bankruptcy is extremely basic and is also known in legal circles as “straight bankruptcy.” In general, all non-exempt property is liquidated by a trustee and the trustee then disperses the proceeds from this liquidation to creditors. Some of the money the debtor owes will be discharged in exchange for a portion of the debt being paid off through the liquidation. While exemption laws differ from state to state, federal law prohibits what are considered necessity items like homes and vehicles from being liquidated. This means you can get the fresh start that bankruptcy is designed for, but at the same time be able to keep what may be the two most important pieces of property in your life.
After discussions with a bankruptcy attorney in Los Angeles, he or she may feel that Chapter 13 bankruptcy is the right choice for you. Also known as wage earner bankruptcy, when you decide to go this route you will be put on a payment plan to pay off your debts. It is designed for people who have a regular income, but who may have gotten themselves in over their head with creditors and just can’t make the monthly payments asked for. There is no liquidation of assets involved in Chapter 13 bankruptcy, so you get to keep all the property that is yours. Debts are arranged to be paid off in about 3-5 years and although this will go on your credit report, many people who file Chapter 13 bankruptcy find their credit score will begin to improve after one year.
If you finally feel it is time to get yourself out from under overwhelming debt, call a bankruptcy lawyer in Los Angeles today to make a fresh start.
