Bankruptcy Basics - San Jose Bankruptcy Lawyer


Attorney serving the Bay Area including San Jose

Bankruptcy is legal process intended to give people and businesses a financial fresh start.  When the process is complete, the debtor is usually released from personal liability of most debts.  There are some exceptions that usually don’t get released like student loans or child support payments, but most debtors feel a significant sense of relief after the process is complete.  Bankruptcy is a legal way for courts to step in to discharge, or remove your debts.   In most cases, declaring bankruptcy is voluntary, however, some creditors can make the company or person who owes money (debtor) go into bankruptcy.

Will bankruptcy destroy your credit?

We are often asked if filing bankruptcy will ruin your credit.  Actually, bankruptcy can help you credit.  That sounds hard to believe when bankruptcy stays on your credit for 10 years.  But it is true; bankruptcy can actually help your credit.   Here are the facts.  Most people who consider bankruptcy are very behind on paying their bills.  They are often already in collections with their credit cards, and other debts (secured or unsecured).  This means that they are already receiving threatening phone calls and letters from collection agencies.  And that means that their credit is already badly damaged.  The longer one waits to pay their bills, the worse their credit rating gets.  Eventually collection agencies will usually sue the debtor to validate the debt in the court system.  A lawsuit from a creditor will further damage one’s credit rating.  People often do not realize that a lawsuit from a creditor will also stay on your credit record for as many as 10 years.  And this is how bankruptcy can help.  Bankruptcy gives you a financial fresh start so that you can start paying your bills on time.  Once the bankruptcy process is complete, then you can start rebuilding your credit and get back on your feet financially.  Prolonging the collection process and suffering damaging lawsuits is what destroys your credit.  Don’t look at bankruptcy as a failure or something that will hurt your credit rating.  If you are hopelessly behind on your bills or already in collections, then bankruptcy can help you begin to fix your credit by giving you the ability to pay your bills on time.

Bankruptcy Chapters

Several types or "Chapters" of bankruptcy are available. Most individuals and small businesses only consider Chapter 7 (straight bankruptcy) and Chapter 13 (re-payment plan).  Talk with a qualified bankruptcy attorney to find out which chapter is right for you.  Here are the six basic types of bankruptcy:

  • Chapter 7
    • Also called “straight bankruptcy” allows individuals or businesses to give up some "nonexempt" assets and clear most debts

  • Chapter 9
    • This is municipality bankruptcy. This allows cities and towns to update their debt

  • Chapter 11
    • This is also known as reorganization. This is mostly used by businesses that want to continue in business and repay creditors at the same time. They receive a court-approved plan to do this

  • Chapter 12
    • Gives relief to family farmers and fishermen with regular income

  • Chapter 13
    • Available for individuals with a regular source of income and allows repayment of debts through an approved plan

  • Chapter 15
    • Deals with cross-border bankruptcy proceedings

Explaining  the “Discharge” in Bankruptcy?

A common word that you'll hear in bankruptcy is discharge.  A discharge releases you from personal liability for qualifying types of debts. The discharge stops creditors from using debt collection actions and communications with you to collect money. This can be telephone calls, letters, personal contact, or lawsuits.

What Is an Automatic Stay?

During bankruptcy proceedings, an automatic stay starts the moment an individual or business files bankruptcy. An automatic stay forces an immediate stop to lawsuits, repossessions, garnishments, utility shutoffs, foreclosures, evictions and other collection efforts.

If you are behind on your bills and you don’t see a way out, or if you are being harassed by collectors or being sued by creditors, then get advice from a qualified bankruptcy lawyer.  A bankruptcy lawyer understands federal bankruptcy law and how it can protect your rights.  San Jose Attorney Geoffrey Nwosu understands that even thinking about bankruptcy can be an intimidating step to take.  That is why he offers a free and absolutely confidential initial consultation.  Bring your debts and leave with a the peace of mind knowing that there is light at the end of the tunnel and you can have a financial fresh start.

Call for your free appointment today. 408-912-5983

Law Offices of Geoffrey C. Nwosu

1710 Hamilton Ave.
San Jose, CA 95125

(408) 912-5983
(408) 375-7703



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Copyright Law Offices of Geoffrey C.Nwosu 2004 to 2010