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Bankruptcy Overview

Orange County, CA Bankruptcy Attorney Joseph M. Tosti

Understanding bankruptcy is important when facing overwhelming debt.  The federal government has enacted laws that enable citizens and businesses to get a fresh start if they have gotten into serious financial trouble.  When an individual is facing a situation in which they cannot pay their debts due to divorce, loss of employment, radically increased mortgage payments, medical bills or other circumstances, there are two options of bankruptcy that may be available.  Businesses dealing with too much debt also are provided with options for recovery.  At the Law Offices of Joseph M. Tosti, the legal team can assist you with bankruptcy filings and solutions of the following types:

An overview of the three types of bankruptcy is provided for your information:

Chapter 7

Chapter 7 Bankruptcy may be an option if there is no possibility of paying your debt.  There are restrictions as to who may file this type of bankruptcy, as it includes the "discharge" of debts.  This means that a large portion of any debt owed will be completely discharged - you will no longer owe the creditors.  There are certain types of debt that cannot be discharged in a Chapter 7 bankruptcy such as child support, recent taxes and student loans.  Your income must be below a certain level to qualify for Chapter 7 bankruptcy, and you will need to provide a "means test" to determine whether you qualify.  It is crucial that you get legal assistance when filing your means test, as those that file it incorrectly may lose the opportunity to discharge their debts through a Chapter 7 bankruptcy filing.

Chapter 13

When an individual is employed and making a paycheck, including being self-employed, and wishes to protect their assets, a Chapter 13 bankruptcy filing may be the best option.  This legal action stops all foreclosure proceedings and a debt restructuring is done which usually gives the individual the opportunity to pay off back debt over a 3 - 5 year period.  This is often the best legal action for those who wish to keep their homes and have a steady income.  It also provides more protection for a co-signer on your home mortgage.

Chapter 11

Chapter 11 is a business reorganization that provides troubled businesses with the opportunity to restructure their debt and get on with focusing on making a profit instead of dealing with creditors.   The business keeps their assets and is able to continue to operate.  Some outstanding debts may be relieved if unfeasible, and others will be paid over time.   A debt restructuring makes operating your business possible.  You lose some ability to make business decisions.  For example, if you were to decide to liquidate business assets, you likely would need a court approval before moving forward.  This type of bankruptcy filing can be of great service to those who had bad business decisions in the past that led to unmanageable debt.  It gives opportunity to move forward and become profitable again.

There may be other types of debt relief solutions for those who are suffering from crushing debt.  A free consultation from the Law Offices of Joseph M. Tosti can answer your questions and help you in making your decision about how to proceed. 

Contact an Orange County Bankruptcy Attorney from the Law Offices of Joseph M. Tosti for more information and legal assistance with bankruptcy filing and other debt-relief solutions.

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15615 Alton Parkway Suite 210 Irvine, CA 92618
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