Becoming bankrupt is always an option for debtors with a lot of unmanageable bad debt. While this legal option can help debtors to get rid of their debts, it also comes with a number of adverse side effects. When thinking about
bankruptcy Oakland residents need to spend some time looking for a competent lawyer to advise and guide them throughout the process. Fortunately, there are many competent lawyers that local residents can hire.
Debt forgiveness is usually provided by different types of bankruptcies. It all depends on the type of debtor you are. Business or corporate debtors have their own chapters while personal debtors have their own. Be sure to consult a competent lawyer to ensure you choose the right chapter.
When comparing lawyers, be sure to give special consideration to lawyers with years of experience in the industry. The ideal lawyer must have handled many similar cases in the past. Therefore, you have to compare the number of bankruptcy cases that different lawyers have been handling over the years before making a decision.
Chapter 7 is one of the most common types of bankruptcies. To qualify for this chapter, the debtor only needs to prove that they do not have a reliable source of income, but have some assets that can be sold to recover funds to offset part of their debt. Both individual and corporate debtors can use this option.
Chapter 13 is commonly referred to as personal debt reorganization. This legal option allows personal debtors to retain ownership of all their assets as they service their debts over a period of several years. It is important to note that some personal debts, such as student loans, child support back payments and alimony cannot be written off through this chapter.
Corporate debtors only have two options, chapter 7 and chapter 11. The latter is basically debt restructuring or reorganization. The management of the firm or organization simply proposes a reasonable plan to service their debts for a couple of years. If the court approves the plan, the organization only needs to meet the terms and conditions highlighted in the plan to get debt forgiveness.
It is important to note that if a debtor fails to honor the terms and conditions of their debt repayment plan, their assets will be liquidated through chapter 7. To avoid losing your property, therefore, you have to submit the monthly payments to the trustee in a timely manner. In case you are not able to make timely payment in a given month, be sure to inform the trustee well in advance.
When a business files for chapter 7, the management will have to shut down the business. This is because a chapter 7 is akin to winding up a business as everything will be liquidated to pay off its debts. Be sure to keep this in mind when seeking to become bankrupt under this chapter.
Bankruptcy can be involuntary or voluntary. The former is where creditors go to court to have a debtor declared bankrupt so that they can recover their debt. The latter, on the other hand, is where the debtor goes to court and voluntarily petitions the court to declare them bankrupt so that they can get protection from creditors as well as debt forgiveness from the courts.