Filing Personal Bankruptcy in Modesto

Modesto residents who are considering filing bankruptcy in Modesto, California should contact a Modesto bankruptcy lawyer for information on current bankruptcy laws. Filing bankruptcy is a very important decision which should not be made without considering all of your financial options. Recent changes to bankruptcy laws have made it more difficult to file Chapter 7 bankruptcy in Modesto and discharge all of your debt immediately. Many Modesto residents will now be forced to restructure their debt payments by filing Chapter 13 bankruptcy instead of Chapter 7 bankruptcy.

Many people want to know if it is the right time to file bankruptcy. There is no right answer to this question, but hundreds of Modesto residents who have suffered an unexpected divorce, death, medical crisis or high credit cards bills and have found financial relief by filing bankruptcy in Modesto.

Filing Chapter 7 Bankruptcy in Modesto

Filing Chapter 7 bankruptcy in Modesto can be one option for eliminating most if not all personal debt (except if the filer has debt considered non-dischargeable). Personal debt which can be discharged by filing Chapter 7 bankruptcy includes high credit card bills and medical bills. Filing Chapter 7 bankruptcy in Modesto allows the filer’s non-exempt assets to be sold and the proceeds from the sale to be used to pay creditors.

The first step in filing Chapter 7 bankruptcy is for the Modesto bankruptcy attorney to file the bankruptcy petition in bankruptcy court. The filer will provide a list of all of their assets (exempt and non-exempt), creditor information and the amount of debt they owe for the petition. After the bankruptcy petition is approved by the bankruptcy court, a 341 Creditor Meeting is scheduled and a court appointed trustee is assigned to sell the filer’s assets and repay the creditors. Filing Chapter 7 bankruptcy in Modesto can discharge most filer’s debts within four to six months.

Filing Chapter 13 Bankruptcy in Modesto

Filing Chapter 13 bankruptcy in Modesto does not immediately discharge the filer’s debts, but it can stop home foreclosure, property repossession and wage garnishments by allowing the filer to restructure their debt payment with a new three to five year repayment plan. Many times the repayment plan can have more favorable repayment terms.

Filing Chapter 13 bankruptcy is not an option for all Modesto residents. Individuals must have a steady income available to make their bankruptcy payments under the new schedule. To file Chapter 13 bankruptcy filers also can not have secured debt greater than $807,750 or unsecured debt greater than $269,250.

Personal Debts Not Eliminated By Filing Personal Bankruptcy

Filing Chapter 13 or Chapter 7 bankruptcy in Modesto only eliminates certain debt outlined under federal bankruptcy law. It does not matter where the filer lives, the dischargeable debt allowed will be the same for every state. Modesto residents should discuss their eligible dischargeable debt with a Modesto bankruptcy attorney. Filing bankruptcy in Modesto, California, does not eliminate the following debts:

• Most back taxes
• Child support and alimony payments
• Certain student loans
• Purchases of luxury items within ninety days of filing personal bankruptcy in Modesto
• Fines owed to federal or California government agencies
• Debts generated from fraudulent activity
• Recent cash advances of $825 within 70 days of filing personal bankruptcy