Filing Bankruptcy In Costa Mesa
Although one of the more stable cities in California, Costa Mesa has suffered from the general slowdown that has hit the state in recent years. One of the most notable results is excessive consumer debt, which eventually led to a spike in bankruptcy filing. But how does bankruptcy really work, and is it really the best way out of debt? Few of us actually know the answers and end up making the wrong moves. If you’re struggling with your debt, here’s a guide to Costa Mesa bankruptcy filing and some tips on making it work.
Chapter 7 vs. Chapter 13
This is usually the first and biggest question you’ll face when filing bankruptcy
in Costa Mesa. The chapters refer to the two types of consumer bankruptcy. Chapter 7 bankruptcy, the more common of the two, involves the liquidation or selling of some of your assets in order to pay creditors. In Chapter 13 bankruptcy, you work out a repayment plan and pay off your debt over three to five years. Each one is designed for a different debtor type, and the laws are made so that you can file under the appropriate chapter.
The Means Test
The means test was introduced in 2005 to prevent abusive Chapter 7 filings. What it does is compare your income to the median income in your state, so you can’t file Chapter 7 if you’re making enough to use Chapter 13. basically, if you’re making more than the median, you can only file Chapter 13 bankruptcy. Your Costa Mesa bankruptcy attorney can help you perform the means test and explain minor details, such as which income types are considered, which can affect the results of the test.
Automatic Stay
As soon as you file your petition, the court imposes an automatic stay on your creditors. This prevents them from contacting you or harassing you to collect payments. The stay also covers foreclosure, wage garnishments, and other solicitation actions. Your Costa Mesa bankruptcy attorney will take care of all communications on your behalf, so you don’t have to deal with creditors and can focus on completing your bankruptcy.
Conditions of Discharge
Once the trustee has decided which debts to discharge and your creditors have agreed to the terms, you will be eligible to exit Costa Mesa bankruptcy. Under Chapter 7, this takes about three to five months after your filing. If you’re filing under Chapter 13, you can only get discharged after you’ve completed the repayment plan which, as described above, lasts three to five years.
The writer of this article is Wystan North. He has made his mark by writing on legal issues especially on Filing Bankruptcy procedures in different states. The author regularly writes on bankruptcy related issues like Ohio bankruptcy,Chapter 7 Laws,
Costa mesa bankruptcy
and chapter 7 bankruptcy etc.
