California Bankruptcy laws are the same as federal ones. This means that there are no state-specific bankruptcy laws in the US and all bankruptcy cases are under the exclusive jurisdiction of federal courts. However, there are still certain exemptions that are allowed by the federal courts to the residents of California in the context of bankruptcy cases.
When borrowers have taken on more loans than they can repay, the process of Bankruptcy is their last legal resort. Bankruptcy laws have been designed to provide relief to over-indebted people. At the same time, such laws also assist the lending party, such as banks and financial institutions recover some or the entire amount by acquiring and selling off the assets of the debtor.
There are also more than one type of bankruptcy that you can file for. Another very important fact about bankruptcy that you have to consider is that is does not do away with all the problematic debts against you but only targets some particular ones. You need to see which ones will be ‘discharged’ under which bankruptcy option.
Alternatives Options to Bankruptcy
Before considering the point of no return, try to come up with ways to bring your expenses down to manageable levels. It goes without saying that increasing your income will be highly beneficial in this regard. If that’s not possible, try selling off some of your assets on your own rather than having the lending agency auction them off later.
There are also a number of organizations that specialize in credit counseling. They have an expertise in helping people in preparing a budget, negotiate lower interest rates or a repayment plan with the lender and even prevent them from intimidating you with debt collecting methods that may be aggressive in nature. However, you have to be wary of agencies that might end up conning you in the name of credit counseling. A bankruptcy lawyer can also be a big help as he or she will try to guide you about a way out before going ahead with the bankruptcy filing process.
This is the most common type of bankruptcy that is filed by individuals. It basically allows the court to liquidate or sell off your assets so as to reimburse the creditors. However, everyone is not eligible for this bankruptcy and you need to have an income that is below a particular level before being legally allowed to do so.
A bankruptcy case of this kind is usually filed by corporations and it allows them to hold on to most of their assets. This enables them to keep on operating their businesses while striking a repayment deal with their creditors.
This form is based on Chapter 11 but is supposed to serve individuals.
After the federal bankruptcy laws were changed back in 2005, they have become more restrictive for people. Hence you need to seek legal assistance from a qualified attorney or law firm, especially regarding the exemptions that you have under California bankruptcy laws under the Code of Civil Procedure section 703.140. Remember, the key to a successful bankruptcy filing is leaving no stone unturned.