Consumer Bankruptcy Overview
Bankruptcy laws help people who can no longer pay their creditors, get a “fresh start,” by completely discharging their debts or by creating a repayment plan. There are several types of bankruptcy proceedings but the most common consumer bankruptcy proceeding is a filing under Chapter 7   [this should be a link] commonly referred to as “liquidation.” Liquidation involves the appointment of a trustee who, in some instances, collects the non-exempt property of the debtor, sells it and distributes the proceeds to the creditors. Under Chapter 7 and 13 proceedings, a trustee is appointed to supervise the assets of the debtor.  After a bankruptcy proceeding is filed, creditors, for the most part, may not seek to collect their debts outside of the proceeding. The debtor is not allowed to transfer property that has been declared part of the estate subject to proceedings. Furthermore, certain pre-proceeding transfers of property, secured interests, and liens may be delayed or invalidated. Various provisions of the Bankruptcy Code also establish the priority of creditors' interests.

Counseling Requirements
Before you can file for bankruptcy under either Chapter 7 or Chapter 13, you must complete credit counseling with an agency approved by the United States Trustee's office. The purpose of this counseling is to give you an idea of whether you really need to file for bankruptcy or whether an informal repayment plan would get you back on your feet.

Counseling is required even if it's obvious that a repayment plan isn't feasible or you are facing debts that you find unfair and don't want to pay. You are required only to participate, not to go along with any repayment plan the agency proposes. However, if the agency does come up with a repayment plan, you will have to submit it to the court, along with a certificate showing that you completed the counseling, before you can file for bankruptcy.

Toward the end of your bankruptcy case, you'll have to attend another counseling session, this time to learn personal financial management. Only after you submit proof to the court that you fulfilled this requirement can you get a bankruptcy discharge wiping out your debts.

At our law offices, we will provide you with the information you will need to obtain your counseling certificate.

Schedule a Free Consultation

To learn more about your rights and options, schedule a free consultation today. For assistance, call us at 760-434-5710 or contact us online.

Tags: San Diego Consumer Bankruptcy Attorney, Escondido Consumer Bankruptcy Lawyer, Bankruptcy Law Firm In Carlsbad.