A Bankruptcy Lawyer’s Blog

Things happen. No matter how hard a person tries, sometimes events in a person's life turns everything on end and creates havoc. Often, this results in serious financial challenges which leads people to seek bankruptcy relief to help them recover from such problems. If you happen to live in California, then there are some California bankruptcy laws that apply specifically to that state.

In California, bankruptcy laws are basically derived from the US Federal bankruptcy statues and codes, or Title 11 of the United States Code. However, the state has allowed for some differences in the exemptions that are allowed when filing for brokeness. In general, the exemptions refer to income and assets that a debtor has which will not be affected by it, or in other words, which are exempt from the brokeness proceedings.

The laws in California allow for the use of the federally sanctioned supplemental exemptions, in conjunction with the allowed California State exemptions. This state is comprised of four areas for US bankruptcy court California districts and each of these courts is named for that district. The four districts are: the California Central bankruptcy court, the California Eastern bankruptcy court, the California Northern bankruptcy court, and the California Southern bankruptcy court.

There are two different sets of exemptions that are allowed under the California bankruptcy laws. These two classifications of exemptions are known as System One and System Two and the debtor has the ability to choose which system of exemptions they will file their bankruptcy claim form under.

Under California law, the System One option provides for a homestead exemption of up to $50,000 for a single person who is not disabled, up to $75,000 for families, and up to $125,000 for those who are senior citizens. System One also allows for the following personal property exemptions: cash in the bank up to $2,000; building materials of up to $2,000; jewelry and heirlooms up to a value of $5,000; motor vehicles up to a value of $1,900; burial plots; appliances; home furnishings; personal clothing; health related aids; food; and any money that comes from personal injury or wrongful death claims.

Additionally, System One also makes allowances for the following exemptions: insurance claims of any type; pensions; benefits such as unemployment compensation; workers' compensation claims; health aid claims; tools of the trade which includes such items as tools, uniforms, equipment, books and manuals needed to continue in a trade; and wages exempt at a minimum of 75%.

System Two exemptions of the brokeness laws in California differs a great deal from the System One exemptions. The homestead exemption in System Two allows for a maximum of $17,425 for all homestead categories. The jewelry and heirloom exemption is capped at $1,150.

The motor vehicle exemption is up to $2,775 and the trade tools exemption is limited to $1,750. System Two also limits the total amount of personal benefits that can be exempted to $17,425 and also allows for a wild card exemption of up to a value of $925. Under System Two there is no wage exemption and only ERISA-qualified pension benefits are exempt.

Because these two exemption systems under the California bankruptcy laws tend to be complex, it is strongly recommended that people hire an attorney who specializes in this area of the law for help with bankruptcy. Generally, the attorney will review your complete financial situation and make a recommendation about which of the two exemption systems would be best to use when it is time to file bankrupt in this state.

Educate yourself further about california bankruptcy laws from Mike Selvon articles portal. Your feedback is valued and appreciated at our bankruptcy information blog where a free audio gift awaits you.

Filing for bankruptcy is a serious matter. You should not go into this process blindly and without considering all your other options. But if this is the only way you can get out of the financial hole that you have created or has been created for you, then you have no choice. People will sometimes tell themselves that filing for debt resolution will give them a new beginning.

In fact, they are right. When your finances are out of control, filing for bankruptcy can be a new beginning for you. It can even be a new beginning in which you learn from your mistakes, in which you don't repeat those mistakes again and a new beginning that will slowly set you onto a new financial path.

But there are certain steps you should take when you do decide to file. These steps will make the process not only simpler, but also better for you.

First, you should find out what your current state laws are concerning debt relief. Yes, bankruptcy hearings are filed under federal law. Yet, each state has their own definitions as to what they consider assets. This is important when establishing what types of assets are exempt, meaning what types of assets you will be allowed to keep after you file.

For example, you are probably concerned about whether you will be able to keep your home or not. Chances are that you will probably have to sell it, if you own it. But you may be able to keep some of its equity.

The best way to find out what types of assets are exempt is by hiring a qualified legal expert, such as bankruptcy attorney. He or she will look over your situation and advise you on what he/she expects the outcome of your suit will be if you decide to go ahead and file it.

A bankruptcy attorney can also explain to you the difference between filing a chapter 7 or a chapter 13 filings and which one best suits your need. But yet be aware that if you try filing a chapter 7 the court may rule against this and make you file a Chapter 13 since the rules governing Bankruptcy changed back in 2005.

A bankruptcy attorney will also advise you even if you file a Chapter 13 bankruptcy that there are some debts you will be responsible in paying. These debts are called Priority Debts. State and Federal Taxes as well as Child Support payments are three types of Priority Payments.

Finally, a legal attorney can help you decide if you should file this case as a single person or jointly, if you are married.

Can you file for bankruptcy without the help of an attorney or other professional, yes? But do you really think you can do the research, understand the research and file all the necessary paperwork on your own?

Remember filing for debt relief is supposed to be a way to a new beginning to your financial future, you want to make that beginning as smooth sailing as you can. One way in which to do this is by asking for help when filing for bankruptcy, one way in which to do this is by hiring an attorney when filing for bankruptcy.

Jeffrey Meier of Jam727 Enterprises at http://www.Jam727.com offers information articles on Bankruptcy at http://www.jam727.com/bankruptcy2/bankruptcy_articles.htm

The majority of tax professionals in the United States, as well as most US taxpayers, would say that Federal income taxes are not allowed to be discharged through filing for brokeness. However, this is an incorrect belief and should be placed in the category of myth. The fact of the matter is, there are certain conditions that do allow people to receive bankruptcy taxes relief at the time that they file bankrupt.

Gaining tax through bankruptcy proceedings is a complicated matter, and undoubtedly this is one reason that there is a great deal of confusion regarding this issue. If you are in a situation where you have Federal back tax issues that are due, then it is even more important to get professional help with bankruptcy, as the tax issue complicates the process even more than in a normal bankruptcy case.

There must be great care taken in the process of filing for brokeness, to be certain that all the details are properly handled, especially when any type of taxes are to be included among the debts.

Finding the middle ground amid the maze of US Federal Bankruptcy codes, the code of the Internal Revenue Service, the lien and levy rights of the IRS and the protections for the taxpayer, is very complex. But in some situations, bankruptcy taxes relief can be the best way to resolve a serious tax issue, plus debt, and to put a stop to the intense collection activities of the IRS.

Filing for taxes relief though either a Chapter 13 or a Chapter 7 one will cause an automatic stay to be issued. This will effectively stop all collection activities. This includes stopping bank account levying and garnishing of wages by the IRS and other creditors as well.

Once the stay is issued, the taxpayer and their attorney have some breathing room and time to decide how to best proceed. They can either attempt to get a discharge of the tax debt under a Chapter 7 filing, or they can reorganize the tax obligation by filing Chapter 13 bankruptcy. Which Chapter is filed will depend on a number of factors, including the total amount of all the debts that are owed, the assets of the debtor and the expected future income and ability to pay under a Chapter 13 reorganization.

In 2005, the US Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). This act made a number of reforms to the Federal Code governing filing for brokeness. One of these changes was a merging of the discharge rules that applied under a Chapter 7, a Chapter 11, and a Chapter 13 bankruptcy.

The best advice is to seek good help if you need to seek bankruptcy taxes relief because of how complex the issue is. There is no blanket approach to dealing with taxes through filing for brokeness, but each case is taken on an individual basis and the circumstances of the individual are taken into account as well. As a general statement, it can be said that in most cases older tax debts can be discharged, but newer tax obligations tend to be treated much like property taxes and cannot be discharged.

Educate yourself further about bankruptcy taxes relief from Mike Selvon articles portal. Your feedback is valued and appreciated at our bankruptcy information blog where a free audio gift awaits you.