California Bankruptcy Attorneys
The crushing burden of mounting debt will lead almost anyone to his or her breaking point. Perhaps one of the best analogy to describe the apparent hopelessness of crushing debt is an individual who is bailing water out of a sinking boat, but no matter how hard or fast he or she works the boat continues to sink. High interest rates and significant debt can result in a similar feeling of drowning in the financial context. However, the U.S. Bankruptcy Code permits honest, hardworking people to discharge, or wipe-away, debt to give the individual a fresh start. Likewise, Chapter 11 of the bankruptcy code also contains provisions that allow businesses and corporations to reorganize and negotiate their debt burden.
If an individual or business has reached the point where the current financial course is unsustainable, liquid assets have been exhausted, or satisfaction of debts and obligations is impossible the experienced attorneys of the Bankruptcy Law Group can help. To schedule a confidential bankruptcy consultation contact us at (800) 920-5351 or online today.
What Are the Most Common Reasons For Considering Filing Bankruptcy?
For individuals, the most common reasons for filing bankruptcy are job loss, a reduction in income, the foreclosure crisis, medical bills, divorce, or a small business failure. Once a financial crisis strikes, many people wind up taking on additional debt or maxing out their credit cards and credit lines just to weather the storm. Many of our clients, who have experienced an extended period of unemployment or income reduction, have also spent their savings and in some cases gone through their retirement savings just to stay afloat.
Businesses may face bankruptcy for an array of reasons. An unforseen downturn in the market or international currency fluctuations can constrain cash flow and significantly reduce revenues. Furthermore, mistakes regarding corporate tax, employment taxes, or payroll taxes can lead to significant liabilities. In some cases, structural changes may render a business plan or niche obsolete.
At The Bankruptcy Group we are consumer and business advocates. Our goals are to educate homeowners, borrowers, and commercial ventures regarding protections that are in place to safeguard their homes and assets and that allow them to restructure or eliminate their debt and get a fresh start. We understand that filing bankruptcy is a major decision. Whom you hire to handle your Chapter 7 or Chapter 13 consumer bankruptcy or Chapter 11 business reorganization is extremely important.
The Basics of Consumer & Business Bankruptcy
There are three main types of bankruptcy. The party seeking to file bankruptcy should base his or her decision on the type of bankruptcy he, she, or the entity should file based on financial circumstances, types of debt held, and future goals . The types of bankruptcy available are named after the Chapter of the U.S. Bankruptcy Code that the type of bankruptcy is defined under. The types of bankruptcy are:
- Chapter 7 – Chapter 7 is sometimes known as liquidation because it, essentially, allows an individual or business entity to wipe away their debt because a reorganization is not possible or highly unlikely to be successful. In Chapter 7 bankruptcy, a trustee is appointed by the court to take control over the assets of the bankrupt party. The trustee then distributes the proceeds from the assets to creditors according to laws governing priority. Chapter 7 is often most useful for individuals and entities with few assets to protect.
- Chapter 11 – Chapter 11 is mainly used by businesses to reorganize their debt, but in limited circumstances, it can also be used by individuals with particularly complex finances or due to means testing out of Chapter 13. Individuals or entities who file for Chapter 11 must submit a debt reorganization plan.
- Chapter 13 – Under Chapter 13 bankruptcy the debtor must submit a payment plan where he or she pays all debts or negotiated debts with creditors over a three to five year plan. For homeowners, Chapter 13 contains a number of provisions that can protect a family home.
Chapter 12 Bankruptcy also exists, but usage of this Chapter is limited to commercial fishermen and family farmers.
Rely on Our Experienced California Bankruptcy Attorneys
The experienced bankruptcy lawyers of the Bankruptcy Law Group are strategic and diligent in their approach to financial problems, debt reduction, and bankruptcy of consumers and businesses. We can discuss your potential options and help you make an informed decision that will allow to secure the fresh start you need. To schedule a confidential consultation call us at (800) 920-5351. We have conveniently located law offices in Roseville and Folsom, California.