Fresno County Bankruptcy Basics
When it comes to filing for bankruptcy, most people are familiar with the two main types of personal bankruptcy - Chapter 7 bankruptcy and
Chapter 13 bankruptcy. The other types of bankruptcy are sometimes less known, however, the law provides for several different types of bankruptcy filings, each tailored to assist people or businesses in a particular situation.
Business bankruptcies are designed to meet the needs of struggling business owners, while municipality and family farmer bankruptcies are designed to meet the unique needs of municipalities and those who own family farms and/or fisheries.
Filing for Personal Bankruptcy in Fresno County
Most people filing for personal bankruptcy will file either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is also referred to as liquidation bankruptcy. When you file for Chapter 7, any nonexempt assets that you have will be liquidated, or sold by the bankruptcy trustee. The proceeds from the sale will be used to pay off your creditors based upon established laws. Typically, priority debt and secured debt is paid off before any non-secured debt. Any remaining debts that qualify are then discharged under the bankruptcy. By contrast, Chapter 13 bankruptcy is called "
wage earner bankruptcy" because you must have a steady income in order to qualify, and you must establish a satisfactory repayment plan for all or part of your debt. How much of your debt you have to repay will vary, but creditors must receive at least as much as they would receive if you filed for Chapter 7.
Filing for Business Bankruptcy in Fresno County
Business bankruptcies are handled a bit differently than personal bankruptcies. In a chapter 7 business bankruptcy, the entire business is liquidated, assets are sold, and creditors are paid off on the basis of the type of debt each curve holds. This effectively dissolves the business, however, depending upon the type of business, the owner or owners may still be personally responsible for any leftover business debt. For Chapter 11 business bankruptcy, the business itself is restructured and a repayment plan is established. In the case of a Chapter 11 bankruptcy, the business may continue to operate if the bankruptcy trustee decides that this is in the best interest of creditors. The rules regarding business bankruptcy can be complex, and depending upon the type of business it may be complicated to liquidate or difficult to maintain a repayment plan that is equitable for the creditors. Complexity is only one reason why having a reputable
Fresno County bankruptcy attorney is essential to having a successful bankruptcy filing.
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