When you are financially strapped, the overdue bills keep piling up, and your phone is ringing off the hook with collection calls, you may have no choice but to file for bankruptcy. Despite the bad wrap bankruptcy has, it can be a very helpful tool to help you get the financial restart you need. But before you make the final decision, you should understand the basics of what bankruptcy actually entails.
Your Right to File Bankruptcy
The first thing you need to understand when you are in a major financial bind is that you have the right to file for bankruptcy under federal law. All bankruptcy proceedings are embedded in the federal court system and governed by federal law. Certain parts and features of bankruptcy does vary from state to state, however. For example, in California, there is a “wild card” exemption portion. Nevertheless, bankruptcy as a whole is basically a federally controlled process.
Not All Bankruptcies Are Created Equal
It is also important to understand that not all bankruptcies are alike. Most people planning to file bankruptcy do so under either Chapter 7 or Chapter 13. Under Chapter 7, you will need to liquidate all of your property that you cannot claim as exempt. Chapter 13 allows you to reorganize your debt and create a plan to repay it within a specific time frame (often accompanied by a reduction of total debt).
Bankruptcy Can Help
Bankruptcy law was generally designed to allow those in serious financial debt to get relief by filing bankruptcy. Once you file bankruptcy, it will prevent you from being endlessly trapped in overwhelming debt that you could not possibly pay off. The bottom line is that bankruptcy gives you a “second chance” by allowing you get out of debt and get your financial feet under you once again.
However, it is important to note that although anyone (in theory) could file for bankruptcy, it does not mean that every filing is accepted. And not everyone who is qualified to file should actually go through with it. Bankruptcy should always be a last resort option – but when you are in a situation where bankruptcy makes sense, you have the legal option to go through with the process. Before you make any final decision, it is best to consult with an experienced Central Valley bankruptcy attorney to assess the situation and help guide you through the process.
Call an Experienced Central Valley Bankruptcy Attorney
If you are considering Chapter 7 bankruptcy, it is in your best interest to consult with an experienced bankruptcy attorney to help you learn your legal rights and options, especially with respect to Chapter 7 bankruptcy.
For more information or to schedule a complimentary consultation with Central Valley bankruptcy attorney Gurjit Srai, please call 209-323-5558, or complete our online form.