Bankruptcy Overview

Bankruptcy Overview

What does it mean to file bankruptcy?

Filing for Bankruptcy means that you are declaring to the Federal Bankruptcy Court that you are unable to afford your debts in their current state, and that you are requesting an excuse from paying them back. The type of bankruptcy that the debtor(s) then qualifies for determines how much, if any, of their debt will be required to be paid back.

Can I file bankruptcy? Do I qualify for a bankruptcy?

Qualification for Bankruptcy is complicated. Read a summary of the qualification process here on our blog. We suggest that you set up a free consultation with Gary and his staff to have a professional take a look at your particular situation. Call us at 858-549-8600 or fill out this form to request an appointment online.

 What are the benefits of filing bankruptcy?

There are significant financial and even emotional benefits to both Chapter 7 and Chapter 13 Bankruptcy.

A Chapter 7 or a Chapter 13 will take a debtor out of the stressful, vicious cycle of draining all disposable income in an ongoing, often futile attempt to maintain debts. Usually these debts that are owed are high in interest, include penalties and fees, and require only minimal payments that essentially keep the balances stagnant as payments continue to be made, making it pretty much impossible to pay them off

Whether it is completely eliminating these debts and giving the debtor the opportunity to start over with a clean slate financially, or halting interest through consolidation and providing the debtor with one affordable monthly payment to pay back a percentage of the debt, the benefits of Bankruptcy are broad.

Chapter 13 can also be used to stop a foreclosure and get current on mortgage arrears (past due mortgage payments). Through either a Chapter 7 or a Chapter 13, most filer’s credit actually improves, as in most cases it has been tarnished considerably prior to filing.

Post bankruptcy, filers often qualify to borrow immediately for things such as car loans for the following reasons: from a creditor’s standpoint, they are now debt free and can probably afford their payment, and they are no risk to file bankruptcy for another eight years because they have just filed. With more money in their pocket (in theory), and less risk, lenders often target individuals who have recently received their bankruptcy discharge with advertisements for car loans, credit cards, etc. We all want to have “good credit” so that we can borrow money; bankruptcy significantly increases a filer’s ability to borrow.

What’s the difference between Chapter 7, Chapter 11 and Chapter 13 Bankruptcy?

A Chapter 7 Bankruptcy is a straight discharge of all of the filer’s unsecured debts. When an individual or married couple files Chapter 7, they are typically relieved of their unsecured debts within approximately 4 months after filing with the court. See Gary’s YouTube video- Chapter 7 Bankruptcy in 2 Minutes

A Chapter 13 Bankruptcy is a consolidation, or repayment plan, that requires the filer to pay back a percentage of their debt over a 3-5 year repayment plan. A Chapter 13 can also be used to stop foreclosure get current on a mortgage arrears, vehicle arrears, and taxes.

A Chapter 11 Bankruptcy is a Business or Corporate Bankruptcy, typically filed by larger scale companies with the purpose of re-organizing their debts in a manner which will allow them to continue to operate, and ultimately resolve their debt issues. Chapter 11’s often include much creditor involvement to agree upon payment terms.


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This article provides general information about California law. The laws are constantly changing and this article is not intended to provide legal advice about your specific situation. Seek competent legal counsel. Let me advise you about your particular situation.

Gary A. Quackenbush, Esq.