Bankruptcy is not simply a grabbing of your assets in exchange for the forgiving of debts. In fact, there are many types of bankruptcy and many outcomes that can result from a bankruptcy filing. The details of each case are different and so the outcomes are always different. This is good news for people who are facing bankruptcy, because it means that their particular case will be treated as a unique situation rather than something that fits a cookie-cutter.
Chapter 13 bankruptcy is a very common type of bankruptcy that individuals file when they are threatened with the loss of their home or other property. Business owners can also file for chapter 13 bankruptcy in order to protect the assets that the business owns. So why would you want to file for chapter 13 bankruptcy? To understand the answer it helps to understand the alternatives.
Wiping Out Debt vs. Re-Structuring Debt
Chapter 13 bankruptcy is a way to re-structure and manage your debt. With chapter 7 bankruptcy, people are truly getting a complete re-start. If they are able to continue to make payments on their home or car, they can keep those. But if they cannot make payments, they can walk away from ownership as well as debt. If they make their payments but have other debts, such as medical debt, credit card debt, or other loans that they cannot pay, chapter 7 allows them to walk away. However, there are penalties to credit scores and getting started again can be difficult.
The alternative is chapter 13 bankruptcy, which allows you to keep assets and stop things like foreclosure, repossession, or even the collection of recent taxes. For businesses, assets can be kept that might otherwise be liquidated. Chapter 7 bankruptcy for a business may require that any assets are liquidated in order to pay debts, while chapter 13 allows the business to keep those assets. The result of the bankruptcy filing will be a restructuring of debt so that the individual or business can pay back the debt in a different way from before.
Getting Professional Help with Bankruptcy
To ensure that you get a realistic and reasonable payment plan in place during your chapter 13 bankruptcy filing, it helps to work with an experienced and skilled bankruptcy attorney. There are many attorneys who can help you with this process, but finding someone who has a lot of experience with chapter 13 bankruptcy should be your priority.
Chapter 13 bankruptcy filing in CA can be stressful and challenging. The Law Offices of David J. Workman can help you to get through your filing and start your life anew on the other side.
