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California Bankruptcy - Credit Score at Stake

California bankruptcy is a term used in financial circles to quote laws in vogue in California City for dealing cases of bankruptcy under uniform federal laws falling under chapter 7,9,11,12,13 of bankruptcy code.

California bankruptcy cases are mainly dealt under chapter 13 with the prime aim of ensuring recovery from defaulters at any cost, as such thorough checking of declaration of debtor is made while a debtor files bankruptcy in order to arrive at true financial state of the borrower. In fact it has minimized bankruptcy abuse to a great extent. One has to clearly declare under oath that he has no resources to repay his debt thus reducing filing cases under chapter7. The bankruptcy law covers chapters on all related issues and how to deal and decide cases effectively. Chapter 7 applies to debtor with no assets to repay, chapter9 applies govt. municipalities, and chapter11 applies to owner or shareholders of companies, chapter12, to farmers and fishermen, chapter13or wage earner bankruptcy, to self-employed and salaried individuals or family California bankruptcy law discourages filing bankruptcy cases in general. Most of the cases are dealt under chapter 13 and thus reducing cases filed under chapter 7 in order to minimize bankruptcy abuse as much as possible. In fact one has to clearly declare that he has no resources to repay his debt.

Mortgage after bankruptcy is also granted to very deserving cases based on their property evaluation, credit history, existing loans, monthly income, paying capacity, whether repaying loans under chapter 13 regularly without default - as such despite filing bankruptcy you can be eligible for taking mortgage. It is therefore not essential that you may entirely loose the chance of getting credit in future, but based on your genuine need and past credit rate you may still be eligible. However you may not get the deal settled at lower interest rates but still have chance to re-establish your credit with mortgage and in a year or so you can improve your financial state with proper management of funds. In fact this a better way to improve your credit score and recovering from bankruptcy at a reasonable pace.

California bankruptcy laws are some what similar to Las Vegas bankruptcy laws which normally discourage filing cases under chapter7, strictly meaning that one is totally without assets and truly insolvent. The law encourages people to seek credit counseling and advises in general to file cases under chapter13 so that they could go for repayment of debt for at least up to next five years instead of writing off the full amount as under chapter 7.

Debtips is a resourceful channel to make you finance literate. Bankruptcy is an unfortunate situation and can happen to anyone. In US Bankruptcy is dealt under uniform federal laws and fall under chapter 7, 9, 11, 12, 13 of bankruptcy code. California bankruptcy cases are mainly dealt under chapter 13.This article is free for republishing
Source: http://www.articlealley.com/article_227107_19.html


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