When you fall on hard times, several options are available to help you get back on your feet financially. As you work with a Chapter 7 bankruptcy lawyer, it’s important to understand the differences between those options. Your local bankruptcy attorney office in Carlsbad, CA can give you the full scoop on each type of filing. Here’s an overview of each to get started.
Chapter 7 bankruptcy
If you file Chapter 7, this will clear out most general debts that are considered unsecured. This includes medical bills and credit cards. These debts will be eliminated, and you will not be required to repay them. To qualify for this type of filing, you must meet low-income requirements.
Once your Chapter 7 bankruptcy lawyer in Carlsbad, CA helps you file, most creditors will stop pursuing you to collect on the debts. A trustee will review your papers and sell any property that is not exempt to pay off the debts. Of course, if you don’t have any assets to sell, the creditors simply get nothing.
Chapter 13 bankruptcy
Chapter 13 filing is designed for those who simply need to restructure their debts and repayments with an affordable plan. The filing allows you to keep your assets and establish a payment plan, based on your income and debt, to pay back a portion of the debt.
This type of filing is typically used by those who don’t qualify to file Chapter 7 but can’t keep up with current debt payments. This filing allows them to catch up on payments to avoid losing a home or car.
Chapter 11 bankruptcy
This type of bankruptcy filing is the most complex and is usually filed by businesses. The business continues to operate, but the debt is restructured so the business can catch up and move forward. This type of bankruptcy is typically referred to as a reorganization.
A trustee restructures the debt and oversees repayment of debts from future earnings. Once all required payments have been made, the business requests that the remaining unsecured debts be cleared. Once this is granted, creditors can no longer come after the company to collect those debts, and the company’s Chapter 11 bankruptcy ends.
Which bankruptcy is right for you?
If you are behind in debts and wondering how to stay afloat, contact a Chapter 7 bankruptcy lawyer in Carlsbad, CA. These professionals will review each option in more detail and determine which applies best to your situation.
If you need assistance with bankruptcy, contact your local bankruptcy attorney office in Carlsbad, CA, Gregory S. Hood, Attorney at Law, P.C. Hood has been a practicing attorney in California for over 30 years. He is a graduate of the University of Washington, where he received his Bachelor of Arts degree, and a graduate of the University of San Diego, where he received his law degree. With practice specialties that include bankruptcy law, he is ready to help you sort through your finances and find the best bankruptcy solution. Contact the office today to learn more about how he can help you with your bankruptcy filing.