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    The Benefits Of Bankcruptcy

    8 Key Advantages To Filing For Chapter 7 or Chapter 13 Bankruptcy Protection

    In March 2015, California’s unemployment rate hit a record of 12.6 percent. This means that over 2.3 million Californians were out of work. This is about 400,000 more unemployed people than 12 months ago.   On top of that, many city and county employees have been hit with pay cuts and small businesses have seen their revenues drop nearly 60 percent.

    Economists have said that additional gains throughout the state are in danger due to the continuous high unemployment numbers, especially in the areas of Central Valley and Inland Empire. It’s not surprise that the amount of foreclosure activity is still happening in these areas, as they suffer from an above-average unemployment rate. According to DataQuick, mortgages are most likely to affect the counties of:

    • Merced
    • Riverside
    • San Joaquin
    • Stanislaus

    For most, bankruptcy is an evil word – with a lot of stigma to it. However, for Californians drowning in debt, it could actually be their lifeline.

    Bankruptcy Chapter 7 and 13 filings have been rising through the counties of Los Angeles, Orange, Riverside, San Bernardino and San Diego. It’s helped thousands to crawl out from underneath their mounting debt. There are many myths about bankruptcy, which includes filing for bankruptcy (Chapter 7 or Chapter 13) means they’d lose everything.

    Not true!

    According to bankruptcy attorney James D. Zhou with Zhou & Chini, it’s highly possible to keep every single piece of property and still get your debt eliminated.  Zhou has worked has a bankruptcy attorney for more than 10 years, and this is the perfect storm to assist consumers in getting rid of unsecured debt and eliminate their second mortgages.

    Now, there are eight potential benefits of bankruptcy that people can take advantage of:

    • Chapter 7 bankruptcy enables you to dismiss most, and possibly, all debt. This means you don’t have to legally pay back debts and creditors need to stop all their collection efforts.
    • Both Chapter 7 and Chapter 13 bankruptcies keep real property from repossession and stops the process of home foreclosure. A chapter 13 bankruptcy plan brings together all payments, enabling you to reinstate the loan. Chapter 7 is a better option so long as your first mortgage is current. On top of that, a bankruptcy filing could mean creditors will need to give the repossessed property back.
    • Creditors must immediately halt their attempts to collect on debt, regardless of what type of bankruptcy a person chooses (Chapter 7 or Chapter 13). If they persist on doing this, you can actually file a lawsuit against them.
    • It keeps your utilities from being turned off if your bills are delinquent. If they’ve been turned off, the bankruptcy protection ensures the utility company turns them back on right away.
    • Prevents any wage garnishments and stops them entirely. When you file for bankruptcy protection, the employer cannot garnish the check anymore.
    • A bankruptcy will stop the foreclosure process or trustee sale and allow you time to get caught up on your mortgage payments. In the end, you may not lose your home.
    • If you file for bankruptcy protection, it allows you to fight against false claims from creditors trying to collect more money than you actually owe them. You and your bankruptcy lawyer can fight these collection fees in court.
    • When you file for a chapter 13, it remove the second mortgage lien and liability if the value is under water. Chapter 7 eliminates the personal liability that goes on the second mortgage although liens stay on the property. The attorney will need to file a motion to strip the lien in the chapter 13 filing.

    Although bankruptcy lets you discharge several kinds of debts, there are some that can be discharged such as:

    • Student loans
    • Family support
    • Criminal fines
    • Certain kinds of taxes

    Secured debts, mortgages and liens can survive bankruptcy proceedings if they’re secured by some type of collateral or the federal government.

    If you’re thinking about filing for bankruptcy, it’s important you hire an experienced, skillful attorney to see you through the entire process. The attorneys with Zhou & Chini serve the whole state of California, and have highly knowledgeable folks that can assist you throughout the process. Give us a call at 888-483-2902.