BANKRUPTCY

CHAPTER 7 BANKRUPTCY

Chapter 7 bankruptcy is sometimes referred to as a “Liquidation Bankruptcy.”  Its primary purpose is to discharge certain debts and give you a “clean slate” in a relatively short period of time. You will be able to live your life free of collector calls, overdue payments, and the stress of being sued.  You will have no more personal liability for your discharged debts upon completion of your Chapter 7 bankruptcy case.

A Chapter 7 bankruptcy is available to individuals and businesses.  We have been Orange County, California, Chapter 7 Bankruptcy Attorneys for over 25 years. 

CHAPTER 11 BANKRUPTCY

A Chapter 11 bankruptcy is sometimes referred to as a “business reorganization” bankruptcy. However, it can also be filed by an individual whose debts exceed the limits of a Chapter 13 bankruptcy.  A Chapter 11 bankruptcy filing allows a business to continue operations while a repayment plan is developed.  Filing a Chapter 11 is very complex in nature, requiring a highly-experienced Chapter 11 bankruptcy attorney to assist in the process.

CHAPTER 13 BANKRUPTCY

Chapter 13 bankruptcy is a powerful legal tool that enables you to protect your property in times of financial hardship. A Chapter 13 bankruptcy is sometimes referred to as a “wage-earners” plan.  In order to qualify, you must have a steady income (which can include self-employment).  Chapter 13 can enable individuals with a steady income to repay part or all of their debts, using a repayment plan spanning three to five years.  In a Chapter 13 plan, the repayment plan cannot extend past five years.

THE MEANS TEST

The bankruptcy means test essentially determines whether a person can file Chapter 7 or must file under a different chapter of the bankruptcy code, such as Chapter 13 or Chapter 11. Individuals whose income is low enough may file Chapter 7, but those who fail the means test must file Chapter 13 or Chapter 11 to repay a portion or all of their debts.

USING BANKRUPTCY AS A SWORD OR SHIELD

An example of using bankruptcy as a sword often arises in cases where the sale of the family residence will yield substantial net sales proceeds which the potential debtor wants used to pay community debts. Often, the non-filing spouse refuses to sell the house or, if the parties agree to sell the house, they often do not reach agreement regarding the expenditure and/or division of the sales proceeds. Therefore, although the house may be sold, the funds retain their community property character and remain in trust pending further determination by the Superior Court.

ALTERNATIVES TO BANKRUPTCY

You will be pleased to know that our clients are often able to avoid bankruptcy by entering into a repayment program negotiated by the Red Hill Law Group bankruptcy alternatives team.  Our bankruptcy alternatives team will work with your creditors to reduce original debt balances by up to 90 percent, in conjunction with a manageable repayment plan spanning over an average of fifteen months.