Living in Sonoma County can be expensive so it’s easy to fall into debt. If you’ve been struggling with bills for months and are finally considering bankruptcy you may be taking a step in the right direction. However, before you can be sure whether bankruptcy is right for you, you’ll need to speak with a bankruptcy lawyer. To help residents of Sonoma County receive bankruptcy advice we offer free consultations by phone. Simply call our office at (707) 200-6688 and schedule your free bankruptcy consultation.
Stop Debt Collectors
Bankruptcy is a powerful tool for stopping debt collectors. Once you file bankruptcy Federal law prohibits creditors from calling, sending letters, continuing lawsuits, or taking any other collection action against you. If a creditor takes a collection action in violation of 11 USC 362(a) they may be held in contempt by the Bankruptcy Court or subject to liability. Best of all, the prohibition is automatic and instantaneous with the electronic filing of a bankruptcy petition. If you are facing foreclosure, wage garnishment, or some other form of imminent debt collection, filing bankruptcy is the best way to stop the impending collection action.
Chapter 7 vs Chapter 13
Most people considering bankruptcy will choose between chapters 7 and 13. Chapter 7 bankruptcy is the liquidation form of bankruptcy, but that term is misleading as most cases do not involve the loss of assets. Technically, in chapter 7 bankruptcy the Trustee can sell any non-exempt property and give the proceeds to creditors. However, State exemption law usually protects all property so there is no sale of assets. For most people, chapter 7 bankruptcy is resolved in a few months without the loss of assets. There will be one appearance at the meeting of creditors. During the meeting of creditors, you will be asked routine questions by the Trustee and be represented by your bankruptcy attorney. After the meeting of creditors, you will take one more counseling course and wait for your discharge. In essence, for most people, chapter 7 bankruptcy is a speedy and effective process for eliminating debt.
Chapter 13 bankruptcy is used by individuals with high income or non-exempt property. In chapter 13 bankruptcy people generally keep all their property (including non-exempt property) and enter into a repayment plan lasting 3 to 5 years. Some or all unsecured creditors will be paid through the plan. When the repayment plan is completed any remaining unsecured dischargeable debts will be eliminated. Chapter 13 bankruptcy is often used by individuals to stop foreclosure and save their homes. As with all bankruptcy chapters, the act of filing the petition will stop the foreclosure process. After the repayment plan has been completed the late mortgage payments will be repaid and the homeowner will no longer be in default. Hence, chapter 13 bankruptcy is an effective way to save homes and vehicles.