Chapter 7 or 13 Bankruptcy Right For You?

Chapter 7 or 13 Bankruptcy Right For You?

bankruptcyFiling for Bankruptcy in California is a multi-tiered challenge. To complete this process successfully and with the least amount of stress, you need a Los Angeles bankruptcy lawyer specialist on your team.

McFarlin Law’s goal is always to help clients reset their financial lives, regain their balance and begin the next stage of their financial lives on the best footing possible. Bankruptcy offers the opportunity to learn from your financial mistakes and recover. We work to make that process as easy as possible.

Getting a handle on the process begins with a basic understanding of the two primary forms of bankruptcy. Many people in financial crisis don’t’ understand (or even know about) the different forms of bankruptcy filings—Chapter 7 and 13., referring to chapters of the bankruptcy tax code. Each offers very different types of protection, with pros and cons that vary, depending on your specific financial situation.

If you find yourself wondering if bankruptcy is right for you, contact an attorney who focuses on bankruptcy law in California. Filing for bankruptcy is not as straightforward as you may think, and there are several factors of your financial profile that will dictate the path you should take.

What is Chapter 7?

In Chapter 7 bankruptcy, also called a “straight” or “liquidation” bankruptcy, the bankruptcy trustee cancels many (or all) of your debts. At the same time it might also sell (liquidate) some of your property to pay your creditors. Call us or visit our Bankruptcy Lawyer Los Angeles website to better understand who can file, the forms you’ll need, how the process works, and what happens to your property and debts.

The whole Chapter 7 bankruptcy process takes about four to six months, costs can be fairly minimal, and the process may require only one trip to the courthouse.

However, whether its irresponsible behavior such as maxing out all of your credit cards or unfortunate life experiences like debts resulting form long-term medical expenses, with a Chapter 7 bankruptcy you must also complete credit counseling with an agency approved by the United States Trustee.

Is it Right for You?

Filing for Bankruptcy should never be taken lightly and a Chapter 7 filing is no slap on the wrist and doesn’t automatically wipe out ALL of your debts. Tax debts, child support and outstanding student loan debts usually remain, as do any debts caused by fraud or malicious acts.

In addition, a Chapter 7 filing hangs a dark cloud over your credit rating for 10 years and prohibits you from securing a new home mortgage during that time too.

These punitive aspects of bankruptcy law mean Chapter 7 filing is usually the best option for clients who own little or no property and who can’t meet their basic expenses, which leaves them little or no money to pay debts.

The good news is that you almost always get to keep your primary home, because most property owned by Chapter 7 debtors is exempt.

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