There are several types of bankruptcies that you must be aware of before you decide to file for any such legal proceedings with your bankruptcy attorney in Oxnard.
Understanding The Working Of Chapter 7 Bankruptcy
If you decide to file for chapter 7 bankruptcy, all your current debts will be put under a temporary stay by the court. This is going to prevent your creditors from collecting any payments from you. They will not be able to garnish your wages or foreclose on your home. They will be prevented from repossessing your property or evicting you from it. The court is also going to hire a bankruptcy trustee for your case. This trustee will be responsible for reviewing your finances and overseeing your assets including your chapter 7 bankruptcy formalities. He will be the person in charge of calling and managing creditor meetings as well. The entire chapter 7 bankruptcy proceedings are going to take around 4 to 6 months to complete. The court may choose to discharge your remaining debts excluding child support, alimony, and court fee, in addition to some tax debts, and student loans.
Do You Qualify For Chapter 7 Bankruptcy?
To find out whether you qualify for a chapter 7 bankruptcy or not, you must get in touch with your attorney right away. There are a few requirements though that you must fulfill including:
- You have to complete an individual or a group credit counseling session which will be provided by an approved credit counseling agency. This has to be done within 180 days before the filing.
- The average of your monthly income for the previous 6 months must be less than the average income of similar-sized households in your state.
- You can also pass a means test which is going to determine what your disposable income is so that you can easily qualify for chapter 7 bankruptcy.
- This will also help the court determine whether you can make any partial payments to your unsecured creditors or not.
- If you are not able to pass this means test, you may be able to qualify for a chapter 13 bankruptcy instead.
- Make sure that you have not filed for chapter 7 bankruptcy during the past 8 years.
- Make sure that you have not filed for chapter 13 bankruptcy during the past 6 years.
- If you have already tried to file for either of the two, and your case was dismissed, you must wait for at least 181 days before you try filing it again.
- You may be prevented from filing chapter 7 bankruptcy if the court determines that you are trying to defraud your creditors
What Debts Can You Discharge Under Chapter 7 Bankruptcy?
Almost all your debts such as unsecured debts, credit card debts, medical bills, and unsecured personal loans can be discharged under chapter 7 bankruptcy. At the end of the process, the court may decide to discharge all of these obligations. According to your Ventura bankruptcy lawyer, there are a few unsecured debts that are not discharged through a chapter 7 bankruptcy and they are:
- Child support
- Student loan
- Tax debt
- Homeowners association fees
- Court fees
- Fines and penalties
- Personal injury debt
- Unsecured debts left intentionally
It also depends on how your creditor responds to your filing for chapter 7 bankruptcy. He may not be as forthcoming as you would expect him to be. He can object to the process and may prevent some of your debts from getting discharged at all. Remember, that even though you can get your debt discharged effectively, a creditor may still have the right to foreclose on your property or repossess it whenever he wants.
What Is Chapter 9 Bankruptcy?
Chapter 9 bankruptcy is helpful when you need protection from creditors. This is a bankruptcy proceeding that is employed to provide financially distressed municipalities assistance and protection along with a plan that helps them resolve their outstanding debts. Municipalities comprise a large spectrum of government entities such as cities, townships, utilities, counties, taxing districts, and school districts.
Are You Eligible For Chapter 9 Bankruptcy?
Typically chapter 9 of bankruptcy law applies to a political subdivision or any public agency of the state. It includes cities and towns and also taxing districts as mentioned above. These are revenue-producing bodies and may also include highway authorities and municipal utilities. You may apply for chapter 9 bankruptcy if:
- You are authorized to file for it under the State law.
- You have become insolvent which means that the entity is not in a position to pay its debts at all.
- You are willing to create a plan to reconstruct your debts.
- You attempt in good faith to negotiate and settle almost all of your debts with the majority of your creditors.
What Is Chapter 10 Bankruptcy?
Chapter 10 bankruptcy will be suitable for you if you are a corporate undertaking. Because there was a lot of complexity attached to this chapter, it was retired and is not in use any longer. Chapter 10 bankruptcy was introduced in the Bankruptcy Act of 1898. It was done to reorganize financially incapable companies. Some of its most practical and easily applicable ideas were incorporated in chapter 11.
What Is Chapter 11 Bankruptcy?
Chapter 11 bankruptcy is a legal process that you can use to reorganize your debts and assets. It is easily available to individuals, companies, sole proprietorships, partnerships, and several other business forms that want to reorganize their debts and assets. It is most commonly used by corporations and not individuals. If you run a business that is in a dire need of reorganization of its finances and debts, you can file for a chapter 11 bankruptcy. This legal proceeding is going to allow you to continue your business operations but under supervision. You will be subject to the obligations laid down by the creditor and it is one of the most expensive bankruptcy proceedings in the country. As a business, you will have to perform a careful analysis of all your other bankruptcy alternatives before you choose chapter 11.
Understanding The Goal Of Chapter 11 Bankruptcy
The goal of chapter 11 bankruptcy is to stabilize your business and rectify the financial mistakes that you may have made in the past. It restructures your debts and assets so that you can pay all your financial obligations on time. It stabilizes your finances and provides the much-needed protection and relief that allow your business to come to life all over again. With chapter 11 bankruptcy, you can do the following:
- Reduce or pay off your major debts and liabilities.
- Liquidate the assets that can help you pay off your debts.
- Reorganize your finances and give it a healthier structure.
You can easily keep your creditors at bay and prevent them from carrying out any legal proceedings that can be detrimental to your enterprise and personal finances as well. Chapter 11 bankruptcy is designed to protect debtors and address their business finance issues along with upholding the rights of the creditors as well.
Do You Know The Importance Of Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is also a US bankruptcy proceeding in which the debtor can request for a reorganization of his finances. The entire goal is to seek the approval of the court along with their supervision for this purpose. Chapter 13 bankruptcy applies to individuals and married couples as well including self-employed people and individuals operating in an incorporated business. Under this, the debtor is required to submit and follow through a plan aimed at repaying the outstanding creditors all their amounts within 3 to 5 years. In most circumstances, the court may require the debtor to come up with a plan that intends to pay back the creditors a substantial chunk of the amount due. The court would advise them to use 100% of their disposable income for repayment.
When Should You File For Chapter 13 Bankruptcy?
You can file for a chapter 13 bankruptcy if you need:
- An automatic stay on the foreclosure or possession that can be initiated by your creditor at any given point of time.
- Time to reorganize your finances and arrange for money to pay your debts and creditors.
- Identify and resolve parts of your business if they can fetch you money to pay off your debts.
- A fresh start by the way of reorganizing your finances and debts.
- To retain your property after having lost almost all of your assets to debt repayments and creditors.
What About Chapter 15 Bankruptcy?
Chapter 15 bankruptcy is a relatively new chapter that has been added to the Bankruptcy Code. It replaces section 304 of the code. The purpose of this chapter is to provide effective mechanisms to deal with insolvency cases. These instances may involve debtors, claimants, assets, and other parties of interest spanning more than one country.
After Filing For Bankruptcy
What do you do after filing for bankruptcy and having gone through a successful legal procedure? In many ways, this is going to give you a fresh start. But there will be a lot of challenges in your way. The amount of debt that you had on your head has already taken a toll on your finances. Regardless of what bankruptcy chapter you choose, you may still not be able to get your life back on track or at least your credit report as sturdy as it was for at least 10 years. This is going to impact your credibility and ability to get any form of new credit in the future. But remember, making all your payments on time is going to help. Another thing that is going to help is the assistance of a dependable bankruptcy attorney in Oxnard at GRENNIER LAW, PC