Thomas F. Miles, Attorney and Counselor at Law
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Know which kind of bankruptcy is right for you

Californians know that the past few years have been financially difficult for many people throughout the state. With widespread job loss and plummeting real estate values, the general financial picture has not been a pretty one. Some El Cajon residents have discovered that filing for personal bankruptcy has been a necessary step to get out from under crushing debt and move in the direction of a better financial future.

There is no denying it: filing for bankruptcy is a difficult decision. But when debt becomes unmanageable, the protections offered by the bankruptcy process can offer some great relief. These protections include stopping creditor harassment, reorganizing assets and discharging debt.

For example, Chapter 7 bankruptcy is often called liquidation bankruptcy. Chapter 7 can offer an individual a chance to discharge many unsecured debts. In some cases, an individual can retain all of his or her assets due to the fact that certain kinds of assets can be exempt from creditors under the rules of Chapter 7. All assets that are not exempt, on the other hand, can be subject to sale by a trustee. The proceeds resulting from the liquidated assets will then go to repaying creditors.

Chapter 7 works well for individuals with relatively small incomes and a large amount of debt. For people who don't qualify for Chapter 7, Chapter 13 may be an option. Chapter 13 lets an individual reorganize assets and consolidate debts.

Readers in the San Diego area who are struggling with debt would do well to learn about which kind of bankruptcy is right for them. The stigma that was once attached to bankruptcy is no longer valid, and Californians who need debt relief should be aware of their options.

Source: Windy City Times, "Bankruptcy can be a new beginning," Roger McCaffrey, Oct. 30, 2012

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