March 30, 2010

Not All Bankruptcies Are Created Equal

Posted in Bankruptcy tagged at 12:23 am by demetriagraves

California bankruptcy law is based on federal law; however there are differences that make California’s state laws unique. If you are facing the possibility of bankruptcy, it is in your best interest to contact an attorney that is experienced with California bankruptcy law to help you regain control of your financial situation.

There are six different types of bankruptcy recognized under California bankruptcy law, but only a few are available to individuals. Though many people think that all bankruptcies are Chapter 11 filings, most individuals would not be eligible for Chapter 11. California bankruptcy law designates Chapter 11 bankruptcy for businesses and individuals with substantial assets.

The most common type of bankruptcy for individuals in California is Chapter 7, followed by Chapter 13. Chapter 9 bankruptcy is reserved for municipal bankruptcy. Those familiar with California bankruptcy law may recall that Orange County filed for Chapter 9 bankruptcy in 1994. Some Californians also qualify for Chapter 12 bankruptcy, a reorganization bankruptcy intended for family farmers and fishermen who earn money seasonally.

If you are an individual facing bankruptcy, Chapter 7 or Chapter 13 are most likely to fit your situation under California bankruptcy law. In Chapter 7 bankruptcy, your assets are liquidated and your debts are discharged. In Chapter 13 bankruptcy, you retain your assets but make payments toward your debts following a very strict repayment plan. Under California bankruptcy law, Chapter 13 bankruptcy is only available to people with a regular source of income. It is important that you discuss your case with an attorney with the knowledge and experience required to help you determine which type of bankruptcy filing you should make.

California bankruptcy law includes special sets of exemptions that protect certain assets from liquidation when the owner files for bankruptcy. Exemptions that exclude the debtor’s home, income used to support his or her family, and other valuable assets and savings are available to debtors who use an attorney with knowledge of California bankruptcy law.

California bankruptcy law has a provision which allows creditors to challenge the discharge of a debt in bankruptcy if the debt was incurred through fraud. The creditor must present facts at the debtor’s trial to show fraud, and can win a judgment against the debtor if fraud is proven under California bankruptcy law. This provision means that people who run up debts with the intention of filing for bankruptcy at the end of their spending spree will be liable to repay those debts.

This provision protects creditors, but can be a problem for debtors. If you had a few months of flashy spending before financial disaster struck, you’ll need an attorney skilled in California bankruptcy law to shield you from fraud accusations during your bankruptcy trial.

An experienced attorney can assist you with dealing with the complex nature of bankruptcy filing under California bankruptcy law. Your attorney will work as your advocate and will help you get on the road to restored credit and financial health.

I offer a free confidential initial consultation where I can discuss your individual circumstances in more detail and answer all of your questions. Understandably, the prospect of filing for bankruptcy can be very daunting. This is why it’s so important to have an experienced attorney to guide you through the process.


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