Becoming bankrupt is never something that someone plans as they live their life. Most people usually find themselves in this situation. To avoid bankruptcy, all you have to do is live within your means and spend less money than you earn. Making prompt loan payments will also help to improve your credit rating, which will reduce your cost of borrowing. If you find yourself in a financial mess, however, you should consider filing a chapter 7 Oakland CA.
Chapters 13 and 7 are the most popular bankruptcy chapters for individual consumers. Chapter 13 provides for debt restructuring. The latter, on the other hand, is basically liquidation.
There is only one way to qualify for chapter 7 bankruptcy. You must have bad debts exceeding the threshold set under the law, and an unreliable source of income. If you have a reliable source of income, the court may recommend debt restructuring as opposed to liquidation.
The first thing the court will do is appoint a competent trustee to oversee the process. The trustee will start by accounting for all eligible assets and qualifying debts. The next step will be to set a date for the auction. After collecting the proceeds of the auction, the trustee will distribute the proceeds to creditors.
The beauty of chapter 7 bankruptcy is that you can have your debts forgiven for next to nothing. You might have $90,000 worth of debt and only $10,000 worth of eligible assets. Once the assets have been liquidated, the unpaid debt will be written off. That is why this bankruptcy option is incredibly popular with people with few assets.
In a chapter 7 bankruptcy, the funds recovered from the liquidation of assets are normally used to pay court fees and taxes. The balance is distributed to creditors based on their portion of the total debt in question. The unpaid debts are then written off. The trustee must not be biased. Their duty is to ensure the law is followed to the letter.
All forms of bankruptcies have consequences that consumers should know about before deciding to file the necessary paperwork. The first is listing by creditors. Your credit report will show that you are bankrupt, so lenders will reject all your loan applications. Your credit cards will also be cancelled. Renting a car or house, or even getting a job, when you are bankrupt is not easy. This is because nobody wants to associate themselves with an individual who is deemed financially irresponsible. Before you seek bankruptcy protections, therefore, you should familiarize yourself with the consequences of bankruptcy.
When you want to enjoy the legal protections provided by the Federal Bankruptcy Act, you should take your time to hire a competent lawyer who will help you with the case. In addition to advising you throughout the process, the lawyer will also help you with the paperwork and represent you where necessary. When looking for a suitable lawyer to hire, experience and reputation are the most important factors to consider.
When you are searching for information about Chapter 7 Oakland residents can come to our web pages online today. More details are available at http://centralcoastbankruptcy.com/chapter-7.html now.
Author: Arthur WalkerThis author has published 1 articles so far.