The main options available to consumers are Chapter 7 and Chapter 13. Each type of bankruptcy offers different advantages, depending upon your unique set of circumstances. For instance, a Chapter 7 straight bankruptcy may be best for a debtor with a large amount of unsecured debt, such as credit cards or medical bills. Chapter 13 may be more appropriate for a homeowner facing foreclosure who wishes to keep his or her home by catching up on missed payments through a payment plan over time. In either case, the consumer has the ability to emerge from bankruptcy debt-free, ready to make a fresh start and regain control of his or her finances.
Like consumers, businesses have different bankruptcy options to consider as well. Before being forced into bankruptcy by an involuntary petition filed by creditors, a business on the brink of insolvency may take pro-active steps and choose the bankruptcy option which works best for it. Chapter 7 can be used to discharge a business’ debts, although the business owner will likely cease operations and have to start over in a new enterprise. Business owners who wish to keep their company operating may opt for Chapter 11, which provides for a reorganization and restructuring of the company’s assets, liabilities, workforce, and other functions. As the debtor in possession, a business in Chapter 11 continues to function throughout the bankruptcy, subject to oversight by the bankruptcy court and creditors’ committee.
A bankruptcy has the advantage of gathering together all of the creditors in one place and dealing with them together rather than individually. The automatic stay invoked by the bankruptcy court puts an immediate end to collection actions and attempts at foreclosure or repossession. A creditor seeking relief from the automatic stay must get permission from the court before being allowed to proceed with a debt collection action. These provisions of the bankruptcy law put an end to creditor calls and harassment by bill collectors, and give the debtor some breathing room to work out an effective strategy for getting out of debt.
Personal Service, Experienced Representation
At the Law Offices of Craig A. Burnett, we take the time to sit down with every client, understand their needs, and explain the different options that are available to them. With 25 years of experience handling bankruptcy matters along California’s North Coast, we are qualified to handle all chapters of bankruptcy. Whether the debtor will benefit most from a Chapter 7, Chapter 11, Chapter 13, or other form such as a Chapter 9 for municipalities, Chapter 15 for cross-border bankruptcies, or Chapter 12 for family farmers and fishermen, we are equipped to handle the matter. If you are having financial difficulties and believe that bankruptcy may be an effective solution, contact the Law Offices of Craig A. Burnett for a free consultation.