Bankruptcy is not the end for people who file; in fact, it is quite the opposite. A successful bankruptcy filing will provide you renewed financial freedom, and you will be able to go forward with a fresh start. Plus, contrary to popular belief, you do not necessarily have to surrender all of your property if you file for bankruptcy.
When you consult with a bankruptcy lawyer in Los Angeles, you will learn about two different types of bankruptcies: Chapter 7, and Chapter 13. The former is a liquidation bankruptcy, and most of your unsecured debts (like credit card balances and medical bills) will be discharged if you file for Chapter 7. Technically, a bankruptcy trustee would be required to liquidate your nonexempt property to pay back some of your debts. However, the majority of people who file for this type of bankruptcy have little to no nonexempt debt to surrender to the trustee.
Chapter 13 is a reorganization bankruptcy. To file for Chapter 7, you have to pass the means test, and you automatically pass the test if your income is less than the median income in the state of California. If you cannot pass this test, you might qualify for a Chapter 13, which is considered a reorganization bankruptcy, if your secured debts (mortgages and liens) add up to no more than $1,184,200, and your unsecured debts (credit cards, medical expenses) add up to no more than $394,725. (The debt limits increase every three years.) In some cases, a Chapter 13 bankruptcy would be a better choice even if you could qualify for a Chapter 7. For example, if you’re behind on your mortgage the Chapter 13 automatic stay will prevent the lender from continuing any foreclosure proceedings, and you will be able to keep your home. Whereas, in a Chapter 7, the lender would be able to seek relief from the automatic stay and foreclose on your home.
When you file for Chapter 13, you present a very manageable repayment plan to the court, including any mortgage arrears that will last for three or five years. And as an added bonus, you may still be able to discharge all or some of your unsecured debts.
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We are here to help if you are ready to take the first step towards a bright financial future. For further information or to schedule an appointment with one of our expert bankruptcy lawyers in Los Angeles please contact Vokshori Law Group today at 855-855-2608 or visit www.Voklaw.com .