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Chapter 7

Bankruptcy Chapter 7

A Chapter 7 bankruptcy provides qualified candidates with the most efficient way to resolve debt burdens, eliminate wage garnishments, stop harassing phone calls, and get a fresh start.  If you're living paycheck to paycheck then Chapter 7 may be the way for you to get a fresh start.
A majority of Chapter 7 bankruptcy cases are considered "No-Asset" cases. “No-Asset” means that  there is nothing of value for the trustee to sell and distribute to creditors.  
To qualify chapter 7 candidates typically have little or no disposable cash available after paying their regular, routine household expenses, such as:
  • Rent, or Mortgage 
  • Car Loan(s)
  • Utilities
  • Groceries
  • Daycare
  • Gasoline and Car Maintenance
  • Auto, Health and Rental Insurance
  • And other household necessities

Who Can File

Chapter 7 Bankruptcy can be filed by individuals, married couples, and business. Qualification for Chapter 7 bankruptcy is based on your income, expenses, and debt burden. If you have filed a Chapter 7 bankruptcy and received a bankruptcy discharge during the last eight years you will need to speak with an attorney to confirm your eligibility. 

Will I Lose My Personal Belongings

As a result of California's generous exemptions most people who file a Chapter 7 bankruptcy can protect up to $100,000 in real estate equity, vehicles, cash, and retirement/pension accounts, to name just a few enumerated categories.  Most property owned by Chapter 7 debtors is either exempt or subject to trustee's abandonment and as a result most Chapter 7 cases are "No Asset" cases.

A consultation with an experience bankruptcy attorney will quickly help you understand how California's generous exemptions can help you keep the things you have worked hard to accumulate, preserve money in the bank, and protect your retirement/pension.  

The Automatic Stay

Immediately upon filing for Chapter 7 bankruptcy debtors receive the protection of the "automatic stay." The automatic stay stops creditors from collection activity against you. The Automatic Stay obligates credit collectors to immediately discontinue any collection activities or risk being liable to the debtor for violating the the automatic stay.  Pending the final resolution of your bankruptcy case, creditors cannot garnish wages, levy bank accounts, attempt to recover cars, stop foreclosure of real estate, repossession of personal property, or cut off your utility service. Violating the automatic stay is a serious offense and subjects the violator to damages. 

The Bankruptcy Trustee for Chapter 7 Bankruptcy

The bankruptcy trustee is the court appointed administrator responsible for examining your bankruptcy petition, identifying the accuracy of exempted assets which are protected from being sold off to pay creditors sone or all of what your owed.

The Creditors Meeting

When a case is filed a "341 Meeting of Creditors" is scheduled together with appointing a bankruptcy trustee.  The the 341 hearing is scheduled to provide the appointed bankruptcy trustee an opportunity to conduct a review the bankruptcy petition and conduct a brief inquiry of the bankruptcy filers, investigate the accuracy of your bankruptcy petition, and to determine if there are any unexempt assets and/or opportunities to recover money for the benefit of creditors. In a majority of Chapter 7 bankruptcies the debtor's generally only attend the 341 hearing. Barring any unforeseen objections to a petition, debtors receive their discharge 60 days after the conclusion of the 341 Meeting of Creditors.   

The Chapter 7 Bankruptcy Discharge

With the exception of a few cases, a majority of “No-Asset” cases result in a discharge approximately 60 days after the 341 Meeting of Creditors.

The Court issues a Bankruptcy Chapter 7 discharge after the 341 hearing is concluded and there are no outstanding objections by creditors and/or the bankruptcy trustee. It is not common for Creditors to file objections.  

WIll the Chapter 7 Discharge Cancel all my Debt

Notwithstanding the discharges, some debts may survive the bankruptcy and the debtor continues to be obligated to those respective creditors. 

  • debts that automatically survive bankruptcy, such as child support, most tax debts, and student loans, unless the court rules otherwise, and
  • debts that the court has declared nondischargeable because the creditor objected (for example, debts incurred by your fraud or malicious acts).

Call today to speak with an experience bankruptcy attorney who will provide you the necessary information and professional assessment of your unique financial situation, and will identify what your best course of action.    

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