California bankruptcy law protects you from a future financial crisis by providing you with the opportunity to start over fresh. Unfortunately, there are a lot of people who end up filing for bankruptcy in California to know that they do not have enough money to repay their debts in full. By filing a Chapter 13 bankruptcy case, the court appoints a trustee, also known as a liquidator, to oversee your distribution of assets and liabilities and negotiate with your creditors. You may be allowed to keep your home and vehicle, but these are generally the only possessions you can keep.
The California bankruptcy law provides you with two main methods to deal with your debts. You can either use a repayment plan or an acceptable debt resolution plan, also known as an ACH plan. If you decide to use the repayment plan, you must make timely payments on all accounts except your secured debts. Your unsecured debts are subject to collection by any collection agency that is registered in California.
When it comes to bankruptcy law, California’s bankruptcy law makes things a bit complicated. However, if you consult with a bankruptcy lawyer who has experience in California bankruptcy law, he/she will explain the ins and outs of the system to you in layman’s terms. Most importantly, the lawyer will tell you what you should do if your debts go beyond the established limits set by the California bankruptcy law. The bankruptcy lawyer will help you determine whether a Chapter 13 bankruptcy is the best option for your case. Chapter 13 requires repayment of all debts after the discharge of all assets and liability.
It is always advisable to get legal help from a California bankruptcy lawyer who is familiar with California bankruptcy law. Although the California bankruptcy law states that no creditor or debtor may require any compensation from you before the discharge of your obligation to pay, some creditors and some debtors still insist on collecting money from their clients. If this happens, then you can seek the advice of a good bankruptcy lawyer. They will help you determine whether your bankruptcy option still includes the right to collect money.
You can file for bankruptcy, even when you are not in a dire situation. You can do so even if your debt is manageable and you are not paying more than 10% interest on your debt. As long as you can prove that your income is going nowhere near the amount required to service your debt, your bankruptcy lawyer can work something out with your creditor. Remember, creditors are only entitled to collect the ‘risk-premium that they will take from you when you are unable to service your debt. Thus, it is important to keep this in mind when negotiating with your creditors.
In California, there is no minimum level of assets or liability that will qualify you for filing bankruptcy. However, if you have other outstanding debts against you have a bad credit rating, you may be advised to opt for the California bankruptcy law’s protection. On the other hand, if you have assets that can be easily converted into liquid assets, then California bankruptcy law is the perfect law for you. If you are in doubt, you can always hire a competent bankruptcy lawyer in California to get you started.
This article was written by Alla Tenina. Alla is the best bankruptcy attorney in Los Angeles California, and the founder of Tenina law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.