Bankruptcy

The main reasons for filing personal bankruptcy are unforeseen medical expenses, excessive credit card debt, loss of employment, and divorce. If you are determined to file bankruptcy, it is generally recommended to consult with a bankruptcy attorney with experience in the field, since bankruptcy is an important decision and the law and its application to your particular situation can be very complicated. The attorneys of PHEIL LAW FIRM will help with completing the bankruptcy forms, which could be very confusing to proceed on your own.

There are two main chapters under which individuals can file personal bankruptcy – Chapter 7 and Chapter 13. Chapter 7 bankruptcy is actually a liquidation of assets, when all non-exempt property of the debtor is sold and the money raised is distributed among creditors. However, there are property exemptions, which are property the debtor is allowed to keep. Property exemptions include some real estate, personal things, tools of trade, clothes, food, etc. It is very often that chapter 7 bankruptcy turns out to be a non-asset case, which means there is no property to distribute and all property is exempt, that is, the debtor can keep it.

Once a bankruptcy petition is filed, the automatic stay comes into effect. That means that creditors can no longer undertake any actions, including wage garnishments, foreclosures, repossessions, phone calls and the like, against the debtor to collect the debts they are owned. The stay last until the bankruptcy case is closed.

Once the distribution of the assets is complete, the debtor gets a fresh start by receiving a discharge of most of his debts. However, there are certain debts that cannot be discharged. Such debts refer to alimony and child support payments, federal and state taxes, fines, student loans and some other.

Chapter 13 bankruptcy is often called an adjustment plan. It provides an opportunity for a debtor to make up a payment plan. To qualify for Chapter 13 bankruptcy, the debtor is required to have a stable source of income to make payments under the plan. Chapter 13 allows the debtor to retain all his property as long as the adjustment plan payments are made.

Just like in Chapter 7, upon filing a petition, the debtor is protected from any colleting efforts of creditors by the automatic stay, which remains in effect until the case is closed. And the case is closed when all payments provided for adjustment plan are made is full.

Once the plan is accomplished, the debtor obtains a discharge of the debts incurred before filing the bankruptcy petition. Again, not all debts can be abolished under Chapter 13 bankruptcy. The non-discharged debts are the same as in Chapter 7.

Pheil Law Firm can handle your bankruptcy filing and help you start fresh and keep a handle on your life. Call us TODAY for assistance in Los Angeles, Orange County, Riverside, San Bernardino, San Diego, Santa Barbara and the Ventura County areas.

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