The United States Bankruptcy Code, which organizes types of bankruptcy into different chapters, offers debt relief to both individuals and corporate entities. If you are individual in need of debt relief, the "liquidation" of non-exempt property facilitate by chapter 7 bankruptcy may be the most sensible option. If it is your corporate entity, whether a corporation, partnership, or other entity, rather than yourself as an individual separate from your business, chapter 11 bankruptcy may be the more prudent choice - especially if it is your intention to remain in business following the bankruptcy process. In determining which chapter of bankruptcy is most appropriate and beneficial, whether as in individual or corporate entity, consult with an experienced San Jose bankruptcy attorney.
Debt Relief. Thinking about bankruptcy in such terms is the first step in no longer allowing any information gap-related anxiety from getting in the way of educating yourself about bankruptcy. Chapter 7, like other types of bankruptcy, is about relief. In bankruptcy's chapter 7 form, this relief is in the form of liquidation. Chapter 7 liquidation, as spelled out in the U.S. Bankruptcy Code, is "the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors." When focusing on the positive, on relief, the words "nonexempt property" should jump out.
The number 13 in Chapter 13 bankruptcy may seem like a bad harbinger, but don't be scared off; Chapter 13 bankruptcy is there to help you keep your property while paying off debts over time. Importantly, Chapter 13 is distinct from other types of bankruptcy (all organized into "chapters"). For individuals seeking to liquidate all but non-exempt property and use the proceeds to pay creditors, Chapter 7 is a sensible option. For a business seeking to reorganize and remain in business by crafting a new payment plan and timeline, Chapter 11 may be prudent. The purpose of this article is to explain the basics of Chapter 13 bankruptcy. In choosing the chapter that is right for you, whether as an individual or business, consult with an experienced San Jose bankruptcy law attorney.
California businesses that file for bankruptcy protection are generally granted an automatic stay. In simple terms, an automatic stay provides the filing business with temporary relief from debt collections efforts. This includes relief from creditors that are seeking enforcement a judgment, foreclose on a property or the collection of debt in any other manner. Creditors are legally obligated to put all of those collection efforts on temporary hold. This is extremely useful for the filing company as it gives that business some space to devise a workable restructuring plan. However, creditors do not always abide by the automatic stay. If your company has been granted an automatic stay, and a creditor is continuing to take collection action, you need to speak to an experienced San Jose business bankruptcy lawyer immediately. Your company's legal rights are being violated.
If you have incurred a substantial amount of unsecured debt related to credit cards and medical bills, Chapter 13 bankruptcy might be a perfect solution for you. Chapter 13 bankruptcy is only available to you so long as you are petitioning as an individual, or operate a self-employed, unincorporated business. Additionally, in order to qualify, your unsecured debts must not exceed $383,175 and your secured debts, such as home mortgages and automobile loans, must be less than $1,149,525.