A Chapter 7 bankruptcy in California is the simplest and quickest way to discharge your debt entirely, but it is not available to everyone. This is the "traditional" bankruptcy where with a few exceptions-taxes, student loans, and domestic support obligations (alimony and child support)- all of your debt disappears and you can start over with a clean slate.
You must, however, qualify for a Chapter 7 by a means test, which will determine whether 1.) you are in a position that allows you to file for bankruptcy at all, and 2.) whether you have sufficient income to pay a good part of your debt over a three to five year period with a Chapter 13 bankruptcy instead.
IS CHAPTER 7 RIGHT FOR YOU?
You should discuss your situation with a San Diego business and bankruptcy lawyer who can advise you on whether you are likely to qualify for Chapter 7 or whether it is the best choice for you given your current situation and your assets. If you're behind on your mortgage and want to keep your home, Chapter 7 will probably not work for you. You can get the answers you're looking for by contacting the bankruptcy lawyers at the Contreras Law Firm in San Diego.
Many people fear Chapter 7 because they have heard that it requires the sale of all your assets to at least partially satisfy creditors. While in theory that is essentially correct, the truth is that many types of assets are exempt-so many that people filing Chapter 7 often do not have to liquidate anything. Again, this is something to discuss with your San Diego bankruptcy attorney.
CHAPTER 7 BANKRUPTCY EXEMPTIONS: WHAT YOU CAN KEEP
California has two different exemption systems, so you will need to discuss this with your bankruptcy lawyer to determine which system applies to you and which exemptions apply in your case. The statute is complex, and the category and amount of each type of exemption will be different according to which system you choose. In general, the exemptions you may be allowed fall into these categories:
- Equity in your home, vehicle, or burial plot
- Personal property such as clothing and jewelry, books, musical instruments, and pets
- Health aids
- Household items such as furniture, appliances
- A portion of your wages
- Wrongful death awards
- Personal injury awards
- Retirement funds
- Public assistance
- Social Security,
- Unemployment compensation
- Disability benefits
- Veterans' benefits
- Crime victims' reparation benefits
- Tools, books, and implements required for your employment
- Child support payments
- Life insurance policies
As you can see, the Chapter 7 Bankruptcy Statute does not strip you of all your possessions and leave you in the street, a common misconception. You are allowed to keep enough to support a reasonable lifestyle while getting a fresh start, free from the specter of overwhelming debt.
HOW TO GET THE INFORMATION AND GUIDANCE YOU NEED TO MAKE AN INFORMED DECISION
When your efforts to pull yourself out of debt have been unsuccessful, and your creditors are hounding you without mercy, it may be time to talk to a San Diego bankruptcy lawyer about your bankruptcy options.
The Contreras Law Firm in San Diego offers a consultation with an experienced and successful bankruptcy attorney at no charge, where you can learn from our experienced and knowledgeable attorney about the choices available and whether Chapter 7 is right for you.
Don't allow your life to be ruined by debt collector harassment. All collection efforts, and the stress they are causing you, will end when you file for bankruptcy under Chapter 7 or Chapter 13. If you qualify, you can lift the burden by filing now. Call Contreras Law Firm today.Back to Top