Thomas F. Miles, Attorney and Counselor at Law
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An overview of the different types of personal bankruptcy

Most California residents are aware that consumer bankruptcy is an option for addressing unmanageable debt. However, few are familiar with the differences between the most common types of personal bankruptcy. The following overview is provided in the hopes of answering some of the questions that consumers have about the different types of consumer bankruptcy.

When most people mention personal bankruptcy, they are talking about Chapter 7. This is a form of bankruptcy that allows the filer to eliminate many of his or her debts through the discharge process. Chapter 7 requires the liquidation of the debtor's assets, but there are a range of exemptions that allow filers to retain much of their property. In order to qualify for Chapter 7 bankruptcy, certain guidelines must be met. 

Chapter 13 is best understood as a chance to hit pause on the ticking time clock of debt and establish a long-term plan for repaying those obligations. Under Chapter 13, many people are able to keep their homes, cars and other property. A new repayment schedule is established, and debtors are able to gain control over their finances once again.

Deciding which form of personal bankruptcy to pursue can be a challenge for some in California. There are pros and cons associated with each option, and each individual must assess those factors before making an informed decision about how to proceed. Regardless of whether Chapter 7 or Chapter 13 is sought, there is no question that personal bankruptcy can give consumers a fresh financial start from which to build new levels of success. 

Source:, "Bankruptcy: A way to deal with debt", Brad Rhen, April 26, 2016

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Thomas F. Miles, Attorney and Counselor at Law
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