General Overview of Consumer Bankruptcy
Bankruptcy is a federal law designed to assist individual consumers and businesses facing financial difficulties. With respect to consumer debtors, the goal of bankruptcy is to help individuals get beyond their financial turmoil and obtain a fresh start.
Bankruptcy Process
The bankruptcy process involves preparing a petition that is to be filed in federal court. The petition contains information concerning an individual's assets, debts, creditors, monthly income, monthly expenses and financial information. Individuals must include all of their creditors in the petition. Upon the filing of a petition, the court grants the individual with an automatic stay. The automatic stay is a provision in the bankruptcy law that prohibits creditors from harassing debtors. Specifically, creditors are prohibited from attempting to collect money or obtain property, starting or continuing lawsuits or foreclosures, freezing bank accounts and garnishing a debtor's wages. In addition, creditors can no longer make threatening phone calls or send collection letters to a individuals after individual has filed for bankruptcy protection.
For a debtor that is married, it is not required that their spouse file bankruptcy. Rather, any decision concerning a potential joint bankruptcy filing should be evaluated on the circumstances of a particular case at issue.
Credit Rating
An individual's bankruptcy filing can be reflected on their credit report for up to ten years. That does not mean that an individual will not obtain credit again. Many lenders in the credit card and mortgage industry do not automatically disqualify an applicant because they previously filed bankruptcy. In addition, it is important to note, that if someone is behind on their bills their credit rating may already be poor. Filling bankruptcy is often the last option, however, it serves as an opportunity to remove the burden of debt of one's shoulders and start fresh.
Types of Consumer Bankruptcy in California
Often called the "liquidation" or "straight" bankruptcy, Chapter 7 is primarily used by individuals who wish to free themselves of debt simply and inexpensively, but may also be used by businesses that wish to liquidate and terminate their business.
An individual with a regular income who is overcome by debts, but believes such debt can be repaid in full or part within a reasonable period of time, may file under Chapter 13 of the Bankruptcy Code. Chapter 13 permits the debtor to file a plan in which the debtor agrees to pay a certain percentage of future income to the Bankruptcy Court for payment to creditors. Additionally, Chapter 13 allows you the opportunity to "cram down" or eliminate all together certain secured debts like car and second mortgages (Home Lines of Credit).
BANKRUPTCY
The information contained on this Web site is provided for informational purposes only and should not be construed as legal advice on any subject matter. The reader should not consider this information to be an invitation to an attorney-client relationship, should not rely on information presented here for any purpose, and should always seek the legal advice of counsel in the appropriate jurisdiction.
Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. This web site and the articles contained on this web site are not solicitations.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Contra Costa and Alameda Counties
East Bay Bankruptcy Attorney
The Cerda Law Offices
Walnut Creek Office
100 Pringle Avenue
Suite 450
Walnut Creek, CA 94596
925.946.4614
Antioch Office
3700 Delta Fair Blvd.
Suite 200A
Antioch, CA 94509
925.757.8268
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This site contains general information that is intended to be accurate and up to date. It is not intended to provide legal advice. For legal advice, please personally consult with an attorney.
The Cerda Law Offices serves clients in Contra Costa County, Alameda County, including the cities of Walnut Creek, Pleasanton, Dublin, Pleasant Hill, Concord, Hayward, Antioch, Oakley, Orinda, Lafayette, Livermore, Moraga, Oakland, Union City, Castro Valley, and Richmond.
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