There are many reasons that people in California file for a personal bankruptcy. These include lost jobs, divorce and falling home values. The personal bankruptcy can help alleviate much of the stress caused by overwhelming debts due to it s ability to offer a discharge in many cases.
In fact, one recent report that may be of interest to our readers in California notes that there are many similarities between a personal bankruptcy and that of an individual. For example, in each of the cases a list of assets and liabilities must be submitted to the court for review. Once submitted, the bankruptcy court seeks to review all of the available assets. This information is used to determine what, if any, of the debts that are owed can be repaid.
This is similar to what happens when a city files for a bankruptcy as well. In that case, the city must look to the available funds to pay for basic services and pension plans. Like individuals, a repayment plan may also be created by the bankruptcy court.
Filing for a personal bankruptcy can be a difficult choice for some people in California, regardless of how they accumulated the debts that they owe. However, it s often the best choice. This is because a successful personal bankruptcy can allow a debtor to discharge many, if not all, of their unsecured debts. A discharge can also mean that a person is able to restart their financial lives, free from the stress that once held them back because of creditor actions and collection efforts.
Source: The Christian Science Monitor, "Personal finance lessons from the Detroit bankruptcy," Trent Hamm, July 26, 2013