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The Right Call

California Bankruptcy Law

In the United States, our economy is largely based on credit and our ability to pay them by ensuring a stable job and a stable economy.  Now, with the worldwide COVID-19 Coronavirus pandemic that has impacted and disrupted all of our lives, many people are beginning to feel the financial impact of unemployment, underemployment, and piles of consumer debt which will continue to accrue in order to stay afloat. Realistically, you can only continue for so long to try to keep up, when your debt has long since outrun your means. At some point, it becomes an exercise in futility, and when that happens, nobody wins, least of all the U.S. economy, which depends on people having the ability to spend.

If you find yourself running to catch up but falling further and further behind, and you spend more time and energy dodging creditors than you do seeking improved sources of income, it may be time to consider filing for bankruptcy.

The first step is to locate an experienced California bankruptcy attorney. At Contreras Law Firm, our attorneys have helped hundreds of families get a fresh start.  If you live in San Diego County, you can take advantage of a free bankruptcy consultation with an experienced San Diego lawyer at Contreras Law Firm to find out if you qualify.


As an individual or a couple, you essentially have two possible options available under the Bankruptcy Code: Chapter 7 and Chapter 13. A third, Chapter 11, applies primarily to business bankruptcies, but in a rare few cases may be used by an individual.


Chapter 7 is the simplest and quickest way to discharge your unsecured debt, primarily medical bills, credit cards, older utility bills, and deficiency judgments on repossessed property. You must be able qualify for Chapter 7 with a means test to show that your income is not sufficient to pay your creditors. If you have secured debt, such as a mortgage or vehicle, if your payments are up to date, you can usually keep making them and retain the property; or you can surrender the property without having to pay the remaining balance.  For example, if you own a car you no longer want but still owe money on it, you can surrender the car and the remaining balance of your loan would be discharged or wiped out.

Theoretically, a Chapter 7 requires that your assets be liquidated to pay creditors; however California has statutes in place that allow for many exemptions, protecting many assets from liquidation, including some home and vehicle equity, personal property, retirement benefits, insurance policies, public benefits, wrongful death and personal injury awards, and a percentage of your recent earnings. Many people who file Chapter 7 have nothing to liquidate after exemptions are applied. Again, your attorney can explain how bankruptcy exemptions work in California and which ones are right for you. The bottom line is that the majority of people who file Chapter 7 rarely have to liquidate much, if anything, and are usually left with their personal possessions mostly intact and the means to move on with life nearly debt free.

To get more information on all the exemptions and to find out which exemption is right for you, contact Contreras Law Firm, our attorneys have helped hundreds of families get a fresh start.  If you live in San Diego County, you can take advantage of a free bankruptcy consultation with an experienced San Diego lawyer at Contreras Law Firm to find out if you qualify.


If you do not qualify under the means test for Chapter 7 or you fell behind on your mortgage and want to catch up, you may qualify for Chapter 13, which is a 3 to 5 year payment plan that allows you to keep all of your property, after which remaining debt may be discharged. Chapter 13 stops creditor harassment and wage garnishment and gives you an opportunity to keep your home and get caught up on payments if you’re behind on your mortgage. Of course there is much more to it, and you can learn if Chapter 13 is right for you by reviewing your financial situation with your San Diego bankruptcy attorney.


At Contreras Law Firm in San Diego, our knowledgeable bankruptcy attorneys will meet with you for a free initial consultation to discuss your situation and help you determine if bankruptcy is right for you. Stop the stress of creditor harassment now. Call Contreras Law Firm today.

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