Bankruptcy Laws in California
California as a state has one of the most differing systems when t comes to bankruptcy laws. In most states in the United States, the debtors are allowed to rely on the federal laws for exemptions in their bankruptcy fillings, but in the California laws they have to make a choice between two options. The bankruptcy cases are judged based on the California code of civil procedure chapters 703 and 704 where the statute amounts are derived by the judicial council who update them every three years. California has four bankruptcy districts that have their own rules when t comes to bankruptcy even though they are all governed by the federal rule.
California Bankruptcy Exemptions:
When it comes to exemptions according to the California bankruptcy laws, the assets value is broken down according to the type. Exemptions that are offered in the state or federal list options include common exemptions such as public benefits, pension, homestead, insurance, personal property, wages and tools of trade. The miscellaneous exemptions are categorized n various ways and may cover areas such as alimony, businesses, gifts, personal possessions such as electronics, licenses and many more. In California bankruptcy laws, the debtor cannot mix match exemptions and should choose either the chapter703 system or the 704.
California Chapter 7 Bankruptcy Laws:
Chapter 7 bankruptcy laws allow for the creditors to file for bankruptcy when they are dealing with debtors who are unwilling to pay their dues, though in most cases the cases are recorded voluntary. In this form of bankruptcy, chapter 7 bankruptcy, the court has the power to action/sell your properties and assets to pay off any debt. Since you are in the State of California, you are first required to pass a means test before you are qualified for chapter 7 bankruptcy. in this case, your median should not exceed your income.
California Chapter 13 Bankruptcy Laws:
Filling chapter13 bankruptcy laws in California doesn’t mean that you will be debt free. California court will always look after paying off debtors first by allowing them to tap into your savings, properties and vehicles. If you start with payment plan, the court may stop collection and any other legal affairs while you’re paying off the debt. Chapters such as chapter 7, 9, 11 and 13 can also influence cases of bankruptcy in California, but the localized laws are much emphatic. Making the choice between the two systems requires some strategic planning, since in one of the systems the assets values are not doubled as the case with other states. A bankruptcy lawyer in California is always a good choice to look into when one is filling for bankruptcy in the area.
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