When considering filing for bankruptcy in California, it is important to understand the different types of bankruptcy available and the eligibility requirements for each one.
Chapter 7 bankruptcy is a common type of bankruptcy that allows for the discharge of debts by liquidating nonexempt assets. To be eligible for Chapter 7 bankruptcy, the debtor must pass a means test that compares their income to the state median income. If their income is below the threshold, they may be eligible for Chapter 7.
Chapter 13 bankruptcy, on the other hand, allows the debtor to create a repayment plan over a period of three to five years to pay off their debts. To be eligible for Chapter 13, the debtor must have a regular source of income and their debts must fall within certain limits.
Before filing for bankruptcy, it is important to understand the potential consequences, including the impact on credit scores and the potential loss of assets. It is also important to consider alternative options, such as debt consolidation or negotiation with creditors, before deciding to file for bankruptcy.
If you do decide to file for bankruptcy, it is highly recommended that you seek the advice of a licensed bankruptcy attorney to guide you through the process and ensure that you are taking the appropriate steps to achieve the best possible outcome.
By