Exploring the Last Resort: Could Bankruptcy Be Your Lifesaver?

Exploring the Last Resort: Could Bankruptcy Be Your Lifesaver?

Bankruptcy is a federal legal process designed to help individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court. It should be considered a last resort after exploring all other debt management options.

Types of Bankruptcy

The U.S. Bankruptcy Code provides for several types of bankruptcy chapters, but the most common for individuals and businesses are Chapter 7 and Chapter 13.

Chapter 7, often referred to as liquidation bankruptcy, involves the sale of a debtor's non-exempt assets by a trustee. The proceeds are then distributed to creditors according to the priorities established in the code.
Chapter 13, often called a wage earner's plan, enables individuals with regular income to develop a plan to repay all or part of their debts over three to five years.
The Bankruptcy Process

Credit counseling: Within 180 days before filing your bankruptcy case, you must receive budget and credit counseling from an approved agency.
Filing the petition: The bankruptcy process begins with filing a petition in the bankruptcy court serving the area where the debtor has a domicile or residence.
Meeting with creditors: After filing, the court will assume legal control of the debts and property not covered by exemptions. A trustee will be appointed to liquidate the non-exempt assets, and you will be required to attend a meeting of creditors.
Debtor education: Before you can receive a debt discharge, you must complete a debtor education course.
Discharge: At the end of the bankruptcy process, your debts are discharged, and you are no longer legally obligated to pay any debts that are discharged.
Filing for Bankruptcy

Filing for bankruptcy is a significant decision that can impact your financial future. At Omar Zambrano Attorney at Law, we understand the stress and anxiety that comes with facing financial difficulties. We are here to help you navigate this process and work towards a fresh financial start.

If you are considering bankruptcy, don't hesitate to reach out to us at 626-338-5505 for a free consultation. We are here to help you eliminate debt and regain control of your financial future.