With the number of home foreclosures on the rise here in Shasta County, I thought it would be good to give you an overview of what relief
bankruptcy may offer.
There are two types of bankruptcies that apply to most people. First, there is
Chapter 7 bankruptcy. In Chapter 7, the Trustee will "sell" any assets you have which are
valued higher than the allowed exemption amount and use those funds to pay your creditors.
Thankfully, most people do not have many assets, or sometimes none at all, that are over the
exemption value. Further, the trustee will give you the option of buying your asset back
yourself. Many people find that they can file a Chapter 7 bankruptcy, be relieved of their
unsecured debts, and not lose any of their assets.
The second most-common type of bankruptcy is a Chapter 13. Here, the Trustee will give you a
payment plan which will last from three to five years. All of your debt gets put into the
plan (including arrearages on pending foreclosures). The difference between your income and
your living expenses is used to create a payment plan. At the end of the plan, all of the debt
which was included is declared to be paid in full. While this type of bankruptcy takes longer
than a Chapter 7, it can help protect your home from a pending bank foreclosure.
Bankruptcy is not the ideal option for everyone. However, it can be a way to get a fresh start
for some people. While this was a brief overview, and not meant to be a substitute for legal
advice, I hope that this article has helped acquaint you with some possibilities for relief
which you may not have considered. Please contact an attorney for further information and to
see if bankruptcy is right for you.
Courtesy of Amy Spencer-Martyn
Spencer-Martyn Law Offices
Redding, CA 96002
This information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.