Bankruptcy is not an easy prospect for anyone. Individuals must consider all of their options before they choose this option. However, there are ways to simplify the process once bankruptcy protection is sought. California law can be complex, which is why it is important to consult a bankruptcy lawyer.
Decide What Type of Bankruptcy Protection is Needed
Individuals opting for bankruptcy in California may choose either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is sometimes referred to as straight bankruptcy. This form requires that non-exempt properties be sold, often by the court. These are then used to pay all or part of the debts owed to creditors. Loan holders are also given the right to reclaim the property they own, including automobiles and homes. The remaining debt is forgiven.
Chapter 13 bankruptcy requires a reorganization of debts. The law allows for individuals to set up a three to five year payment plan on all debts, which keeps homes and automobiles intact. Those who wish to restructure their debt, rather than have it forgiven, must show that they are able to pay loans over a period of time.
Gather All Necessary Paperwork
The first thing a bankruptcy attorney will tell individuals to do is to gather the appropriate paperwork. This will include at least six months of payment documentation. This document must be issued by an employer either physically or electronically. Any income from other sources must be verified as well. If there are any savings accounts, retirement accounts, or life insurance policies, those documents should be gathered as well. Likewise, it will be necessary to have up to four years of income tax returns available.
Information about all debt is also necessary. This includes credit cards, house payments, vehicle payments, alimony or child support, and student loans. Any regular bills should also be presented in order to show monthly responsibilities. Find proof of at least six months of utility bills and insurance premiums to present to the attorney.
Finding a Bankruptcy Attorney
The best way to file for bankruptcy in California is to hire an attorney. Though some may choose to file on their own behalf, the law is far too complex for most people to adequately understand. Likewise, individuals who fear they may not be able to afford attorney fees can find solace knowing that they are likely to save more when utilizing attorney services than when filing on their own.
There are special tips for finding the best bankruptcy lawyer. First, make sure the attorney specializes in bankruptcy. Do some research online to find out how long the attorney has been practicing in that field and where he or she obtained the law degree. Also check to make sure that the attorney belongs to the National Association of Consumer Bankruptcy Attorneys. Though this is not necessary, it can be a helpful tool when choosing between multiple lawyers. Last, meet with those attorneys that offer free consultations. It is important to work with someone who is straightforward and honest, which can generally be determined during that first meeting.