What is bankruptcy?

Bankruptcy is a legal process through which individuals or businesses are able to get relief from their debts. It is a way for debtors to restructure their finances by either eliminating or reducing their debt. In California, there are two types of bankruptcy available: Chapter 7 and Chapter 13. Chapter 7 is a process that allows most, if not all of the debtor’s debts to be discharged. This means that the debt is legally forgiven and the debtor no longer owes the money. Unfortunately, the debtor may have to give up some assets in the process. Chapter 13 is a repayment plan that requires the debtor to pay back some or all of their debt over a period of time, generally three to five years. During this time, creditors may not attempt to collect on the debt or repossess assets. Both Chapter 7 and Chapter 13 allow debtors to get a fresh start and re-enter society without being burdened by large amounts of debt. However, it is important to seek the advice of an experienced attorney before filing for bankruptcy in order to ensure that all legal rights are protected.

Related FAQs

Is there a deadline for filing for bankruptcy?
What is an adversary proceeding?
Are there any exceptions to the automatic stay issued when filing for bankruptcy?
What is the bankruptcy automatic stay?
What is considered a non-dischargeable debt?
Is it possible to have a bankruptcy case dismissed?
How long does it take to file for bankruptcy?
What is a reaffirmation agreement?
What do I do with any unexpired leases or contracts when filing for bankruptcy?
What is the process for filing for bankruptcy?

What is bankruptcy?

Related FAQs

Related Blog Posts