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What is Chapter 7 Bankruptcy in California?

Bankruptcy is the legal process designed to help honest people eliminate all or part of their debt or to help them repay a portion of what they owe. 

If you are underemployed, out of work or struggling with overwhelming debt, you may be considering bankruptcy. It’s a last resort that will affect your ability to make purchases on credit or get a loan, but it can also give you a fresh start and help you regain financial stability. It can give you the breathing room you need to start over, build a better credit score and become eligible for loans and credit.  

A Chapter 7 in California legally discharges (wipes out) certain kinds of debts when you cannot pay them due to insufficient income. If you have limited  or no income income and can’t pay your debts, Chapter 7 may fit your needs.

The court assigns a trustee to inventory and liquidate your nonexempt California property and pay off creditors.

There is no payment plan.  Chapter 7 can be completed in three to six months. At the end of that time, you will be free of most of your unsecured debt and you will be ready for that “fresh start.” 

Debt that is discharged in Chapter 7 includes:

  • Vehicle
  • Credit cards
  • Utility bills
  • Medical bills
  • Back rent
  • Personal loans

Considering Bankruptcy?

Questions you should ask before filing Chapter 7

  • Do you use credit cards to pay for basic necessities?
  • Have you lost track of how much you owe?
  • Are you thinking of pulling from your retirement or 401(k) to stop harassing calls from debt collectors?
  • Are you making (or missing) minimum monthly payments on your personal loans and credit cards?

If you answered yes to any of these questions, filing for California bankruptcy in may be your best option.

Should I File Bankruptcy In San Bernardino, Riverside, Los Angeles and Ventura counties?

Filing bankruptcy is a stressful. Many people feel it’s a sign of failure and don’t take the step that can help them the most.

Yes, its a last resort, but you could cause more harm by not taking action when you should. Filing for bankruptcy in Southern California can be exhilarating. It removes the  enormous financial burden  that has been stopping you from moving forward. Contact the Law Office of Terrence Fantauzzi and allow us to help you decide if filing for Chapter 7 is the right option for you.

This is an important decision. If bankruptcy is not right for your unique situation, we will tell you.

What are California Exemptions in Chapter 7?

Exemptions are a critical part of bankruptcy. California allows you to choose between State and Federal exemptions. This allows you to select the option that helps you protect your property the best. law allow you to keep a certain amount of property after going through Chapter 7 proceedings. When executed properly, you can eliminate most of your debt in less than six months and still keep your primary car and home.

The goal is to help you get back on your feet while still allowing you to provide for your basic needs. Exempt property includes:

  • Necessary clothing, household goods and furnishings
  • Jewelery
  • Household appliances
  • Your homestead
  • A portion of earned, unpaid wages
  • Pensions, 401(k), retirement accounts
  • Social security income and disability benefits
  • Veterans benefits
  • Business partnership property

Yes, in California, our clients usually keep their home in Chapter 7 bankruptcy!

Filing for bankruptcy can help you get the breathing room you need to make plans for the future. If you are making the minimum monthly payments and struggling to stay afloat, filing for please contact us for a FREE Chapter 7 bankruptcy consultation. We can help you inventory your assets and start thinking strategically, putting you quickly on the road to a “fresh start” and a better life.

How Do I Qualify for Chapter 7?

To prove that you are eligible for fresh start bankruptcy, you must pass the bankruptcy means test. It compares your monthly income to that of California’s median income. If it is below that level, you may qualify for Chapter 7. The means test is a requirement in situations where more than 50% of your debt stems from consumer purchases.

You must receive credit counseling from a government approved agency.

What Can Prevent Me from Being Eligible for Bankruptcy?

If you had a bankruptcy dismissed within the last 6 months due to:

  • A court order violation
  • Abuse of the bankruptcy system
  • A fraudulent filing
  • Requested dismissal because a creditor requested a lift of the automatic stay

Bankruptcy law prohibits individuals from filing bankruptcy repeatedly due to irresponsible purchases. You cannot file Chapter 7 bankruptcy if you have had another discharge in the last eight years.

 

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