Bankruptcies fall into basically two types of categories – discharge of debts with no payments (chapter 7) and repayment plans for different types of debts (chapter 13).
What is a Bankruptcy and How Does it Work?
Bankruptcy is conducted in the federal courts. Bankruptcy is effectively a lawsuit that is filed against creditors. In order to file a bankruptcy, you must complete documents for filing with the court, you must complete a credit counseling course, and you must provide financial information for the court. After a case is filed, you will be required to meet with a trustee about 30 days after your case is filed. The process is different for chapter 7 and 13 cases. The bankruptcy process should be completed for a chapter 7 in approximately 4 to 6 months from the date of filing. A chapter 13 case goes from 3 to 5 years.
What Type of Bankruptcy is Right for You?
What type of bankruptcy is best for you, and that you qualify for depends on a variety of factors that include income, expenses, and types of debts, along with long term goals and restrictions in various chapters. For instance, if you own your own home, and your home has less than $600,000 equity, then a chapter 7 is not for you. If you principally have credit card or medical bills and are current on your house and car payments, then chapter 7 may be the best solution. In order to accurately assess the best bankruptcy chapter for your needs, you should consider seeing a board certified Bankruptcy attorney at Fong Law Group.
Bankruptcy should be someone’s “last resort”. Prior to filing a bankruptcy, you should consider debt negotiation with your creditors. At Fong Law Group, we assist people in debt negotiation. We also assist people with loan modifications through bankruptcy chapter 13.
Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.