Chapter 7 bankruptcy is the most common type of bankruptcy. The basic purpose of a Chapter 7 bankruptcy is to provide the consumer with a fresh start by wiping out all qualifying debts, including credit cards, medical bills, repossession deficiencies, and lawsuits, as well as a variety of other debts.

Benefits

  • Upon filing for bankruptcy, the court issues an automatic stay. This stay stops collectors from pursuing owed debt and stops harassing phone calls.
  • In most cases, Chapter 7 bankruptcy allows a complete discharge of all qualifying debt (no repayment necessary).
  • Chapter 7 bankruptcy in California has generous exemptions that allow you to keep much of your personal property.
  • Chapter 7 exemptions in California may allow you to keep your home, up to certain equity limits.
  • Stops wage garnishment.
  • Lets you choose the type of secured debt you would like to keep.
  • Gives you a chance to breathe in order to sort out your financial affairs.
  • Once the court approves your discharge, you can enjoy a fresh start and begin to rebuild your credit.

For more questions, check out our Frequently Asked Questions, or give us a call at (714) 617-8387 today to speak with an attorney about your situation.

 

Process

To get started, contact us at the phone number above to speak with one of our attorneys to learn more about how bankruptcy can help benefit you. Our free consultations involve a thorough analysis of your current financial situation, including any real and personal property, credit card and other debt, and a review of your assets. In order to file a bankruptcy petition, you will need to provide us with a number of documents, including all pay stubs from the last six months and all tax returns from the last three years, and fill out a questionnaire about other secured and non-secured debt.
Once we file a petition, the typical Chapter 7 bankruptcy consumer only has one meeting with the bankruptcy trustee. This meeting gives creditors a chance to ask questions. In a typical case, most creditors do not show up for the meeting. The trustee may also aatsk you questions about particular items on your petition. Once the meeting with the trustee is completed, the court will process your petition and they will notify you by mail once you receive your final discharge.

 

Exemptions

Depending on the bankruptcy laws of the state you live in, a consumer may be able to exempt certain property from the bankruptcy estate. By exempting the property from the estate, the consumer is able to keep this property according to the federal or state exemptions in effect. In California, there are two sets of exemptions that a debtor can choose from when filing for bankruptcy.

Contact one of our experienced attorneys at (714) 617-8387, or click below to Chat Live with an attorney for help in determining which set of exemptions is best for you.

FAQ

What is bankruptcy?

Bankruptcy is relief for consumers that is provided under a federal law, allowing them to have certain debts forgiven.  This law is designed to help consumers who sometimes simply do not have the ability to meet their repayment requirements.  The underlying philosophy of bankruptcy laws are based on forgiveness rather than punishment.

 

What is an “automatic stay?”

Once you file your bankruptcy petition, an “automatic stay” goes into effect.  This stops creditors from trying to collect any debt from you while you are going through the bankruptcy process. Furthermore, the automatic stay stops creditor phone calls, letters, wage garnishments, lawsuits, and any other scare tactic used by creditors of debt collection agencies.

 

What is a “discharge?”

Once the court grants the bankruptcy petition, the consumer then receives a discharge from the court. A discharge is a legal release from debts. Creditors are left with no legal resource to contact you or pursue any of the debts listed in the bankruptcy documents.

 

What is the difference between Chapter 7 and Chapter 13 bankruptcy petitions?

There are two ways for the typical consumer to file for bankruptcy. Chapter 7 is the most common type of bankruptcy, and it allows a consumer to discharge debts completely through a relatively short process. Under Chapter 13 bankruptcy, a petitioner is given a chance to rearrange their financial affairs and repay just a portion of your debts. Both Chapter 7 and Chapter 13 bankruptcy can help protect assets (including your home), give you leverage with creditors, and provide you with breathing room and a fresh start.

 

What is a Chapter 7 bankruptcy?

Chapter 7 is the most common type of bankruptcy. A discharge under a Chapter 7 bankruptcy discharges all qualifying debts, including but not limited to, credit cards, medical bills, and most other debts. In Chapter 7 bankruptcy, there is no repayment for most unsecured debts. In most cases, the consumer keeps all of their property, which may include cars and/or real property. The process takes roughly 3-4 months to complete. After the bankruptcy is over, the consumer may reaffirm certain debts in order to keep certain secured property.

 

What is Chapter 13 bankruptcy?

<a href=”http://www.higbeeassociates.com/practices/consumer-advocacy/bankruptcy/chapter-13-bankruptcy/” title=”Chapter 13 bankruptcy service”>Chapter 13 bankruptcy</a> provides consumers with breathing room and a new plan to repay creditors a portion of owed debt over time. Chapter 13 bankruptcy is designed for consumers who make sufficient income to pay living expenses but are currently unable to meet all their obligations. In a Chapter 13 bankruptcy, monthly living expenses are calculated first, and any remaining income is used to pay towards outstanding debt. The plan is based on each consumer’s ability to repay their creditors. Chapter 13 bankruptcy is appropriate for consumers with assets over the exemption amounts, or non-dischargeable debts.

 

Do I have to sell everything I own under a Chapter 7 bankruptcy?

No. In 99% of Chapter 7 bankruptcy cases, an individual does not have to sell anything they own to receive a discharge of their debt.

 

What is the “means test?”

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Under the BAPCPA, Congress established new rules for individuals seeking to file bankruptcy. Among these rules was a test based on a mathematical formula, which is used for determining whether or not an individual qualifies for a Chapter 7 bankruptcy filing. Contact a licensed bankruptcy attorney for more information on this formula and whether or not you qualify for Chapter 7 bankruptcy.

 

Do I lose my car if I declare bankruptcy?

Most individuals under Chapter 7 bankruptcy are able to keep their car and other personal property.

 

Does bankruptcy discharge child support obligations?

No, most child support obligations are not dischargeable in bankruptcy.

 

Are taxes dischargeable in bankruptcy?

No, most taxes are not dischargeable in bankruptcy.

 

 

 

Call us today at (714) 617-8387 for a free consultation.

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