If you have fallen behind in debt, bankruptcy in Riverside can give you relief. Bankruptcy is a legal procedure which helps debtors erase most of their debts. The history of bankruptcy dates back to the 1800’s. The first laws were passed under the Bankruptcy Act of 1800 and only merchants could be declared bankrupt by creditors. The Bankruptcy Act of 1841 saw the first laws allowing debtors to voluntarily declare themselves bankrupt. Congress repealed this law since creditors failed to get many payments. Congress passed a permanent bankruptcy law in 1898. It was not until 1978 after multiple appeals of the 1898 law that a big change came. Another bankruptcy reform came in 2005 making it more challenging to file.
You can choose from various types of bankruptcy. Most debtor prefer to file Chapter 7 bankruptcy because it gives the quickest discharge. However, the changes to laws in 2005 set new restrictions on who can file Chapter 7. Chapter 7 requires a debtor to convert non-exempt assets into cash. Among non-exempt assets are second vehicles, vacation homes, heirlooms, or collections. A trustee handles the sell of the assets and divides the funds among creditors. To be eligible for Chapter 7, your disposable income cannot be above the median for a household of the same size in your state. Debtors who fail to meet the requirement must file Chapter 13 bankruptcy. Chapter 13 allows you to pay back debt with a new payment schedule. No assets will be liquidated under Chapter 13. If you own a business Chapter 11 is a variation of Chapter 13 allows you to remain open under the guidance of a trustee. You may get an exemption from some of your debts. A business will only have file Chapter 7 in rare circumstances. Just as with individual bankruptcy, the proceeds will be used to pay creditors. All filers of bankruptcy have to meet with creditors several times.
Since bankruptcy law firm in Riverside can impact credit, it is something to take seriously. Only file bankruptcy when you find no other options. It also helps to have a good attitude and stay positive. You are encouraged to speak with an attorney. Winterbotham, Parham, Teeple, a PC is available to help you.
