Deciding to declare for bankruptcy may seem like a daunting decision for many. Admitting that you may not be able to overcome your financial challenges is not an easy decision, but it is important to remember that bankruptcy is designed to help you overcome the burden of debt, and although the recovery process may not be quick or easy, in the long run declaring for bankruptcy may be the way to go.
Different bankruptcy options are available to help businesses and people struggling with debt during hard times. Payless ShoeSource, shoe retailer, recently filed for bankruptcy protection and will be closing 400 stores, including 50 in California, as a result. The shoe retailer announced it will begin immediate liquidation in the stores that are closing. The company plans to reduce its debt by 50 percent and has lenders to provide funding to keep the company operating during the Chapter 11 bankruptcy process.
Chapter 7 like other forms of bankruptcy has its own unique requirements, and these requirements must be fulfilled if a person is to be illegible for filing bankruptcy under Chapter 7. These are the circumstances in which the person will be considered ineligible for Chapter 7:
The word bankruptcy alone has a way of making people feel apprehensive and uneasy. Nobody ever thinks that they will one day find themselves in the position of filing for bankruptcy. Unfortunately, for many Americans, hard financial times leave them with no other choice than to file for what is known as Chapter 7 bankruptcy.
Chapter 7 bankruptcy is the most common form of bankruptcy in the United States. It is also referred to as liquidation bankruptcy. It allows debtors to lose all their debt and start over from scratch. Most of their assets are liquidated to pay off the creditors, and their credit score decreases. The creditors are paid off, and the filer can have a clean slate. In 2005, there were major changes made to the bankruptcy law to stop people from abusing it. After these changes, eligibility criteria to file for Chapter 7 bankruptcy became stricter.
When many people in California think about bankruptcy, they likely do so in a negative light. Some feel that the only reason to file for Chapter 7 bankruptcy is due to a lack of financial discipline. Others assume that bankruptcy represents some type of failure. Some even believe that bankruptcy is nothing more than an effort to shirk one's financial obligations. In reality, however, many highly successful people turn to personal bankruptcy to resolve complex financial matters.
Often, companies in California have many different employees who dedicate themselves to the company's success. Despite this dedication, there are often factors beyond the control of workers that can impact revenue. In some cases, a company may decide that the best option is to seek Chapter 7 bankruptcy protection.
People in California hold a number of misconceptions about personal bankruptcy. One of the most common is that individuals who file for Chapter 7 bankruptcy are demonstrably poor money managers, and they do not have what it takes to achieve any significant level of success. This is not only inaccurate, but such beliefs could keep people from seeking relief from crushing levels of debt.
When an individual's debt exceeds his or her ability to repay those obligations, it is time to take action. While some people are able to dig themselves out of debt, many others turn to Chapter 7 bankruptcy to eliminate debt and gain a fresh financial start. An example is found in the recent filing by actress Tisha Campbell and her husband of 20 years, both California residents.