Bankruptcy court, California, is the place of last resort for many people. Whether you are an individual or a business, no one wants to experience financial disaster. But a down turn in the economy or a personal tragedy can put you in that situation quickly. And with the recent economic events, it is becoming more and more common. The court is responsible for handling everything related to bankruptcy filings. Bankruptcy is handled in federal judicial districts. They help people who are in financial trouble and cannot make their bills. There are three main types of bankruptcy: Chapter 7, Chapter 11 and Chapter 13.
Chapter 7 is the most radical form of bankruptcy filing. In bankruptcy court, California, when someone files for Chapter 7 assets are going to be liquidated. This is the type of bankruptcy where there is no real hope of repayment for the creditors. The filer is trying to get rid of their debts in one fell swoop. It may mean losing assets such as their home or car. However, that is not always the case. A good attorney will help protect the interests of their client throughout the process. Once assets are collected and sold off, the creditors will receive a percentage of the proceeds. That is the only amount they will be entitled to. They cannot come after anything else.
Chapter 11 allows for the reorganization of company. This allows them protection from creditors while they try to restructure debt and money to come out stronger. You hear of this type of bankruptcy most often with corporations in trouble. Some filers will try to borrow money to pay off heavy debt loads or to sell off assets to cover their debt. The biggest thing it provides is breathing room. In bankruptcy court, California, the creditors will have some say, but the court has final decision power.
Chapter 13 allows for reorganization of personal debt. One criterion for this filing is that the filer must have some form of income to repay debt with. The idea is that creditors will be repaid over a period of time. Without an income source, that cannot happen. But it does give people protection while they work their way out of debt. It comes with a payment plan that must be followed. In bankruptcy court, California, the creditors must accept what the court decides. Whatever form of bankruptcy you choose, get a good attorney to help you through the process.
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