Bankruptcy and what it means for you in California

You may find yourself in financial difficulty. One day, you wake up and realize that something had to change. You can no longer maintain the level of living that you have been sustaining. For you, the answer may well mean filing for bankruptcy. There are a few different options to choose from: Chapter 7, Chapter 11 or even simply walking away from the debt and hoping your creditors don't come after you.

Bankruptcy is defined as a federal court procedure that allows consumers and businesses to get rid of their debt and finds a way for you to repay your creditors. You have the right to bring your case before the court and, with the help of an experienced attorney, you can be protected from your creditors during the bankruptcy proceedings.

There are two types of bankruptcies: liquidations and reorganizations. Chapter 7 and Chapter 13 are the most common proceedings for individuals and businesses. A liquidation bankruptcy is a Chapter 7. This generally means that you own the property and it can be sold or traded to settle the debts you have incurred.

Chapter 13 bankruptcy falls into the reorganization category. This means that you will be able to keep your property but you need to submit a plan that you can stick to in order to repay your debts to your creditors within three years.

Many times, you are caught in the middle and you don't know what route to take. This is where a good attorney comes in. This individual can help you by listening, researching and giving you options.

An attorney who knows the laws of the state of California can be invaluable; he or she can be a voice of reason in a difficult place.

Source: FindLaw, "Bankruptcy," accessed July 13, 2015