If a personal bankruptcy is the choice for solving an unbearable level of personal debt, one option is to file for bankruptcy under Chapter 7. If you want assistance, contact us here at Guardian Legal Group. We are proven and trusted California bankruptcy attorneys who can help. Remember, debtors have the right to file bankruptcy when debt becomes too much to handle. Here are some answers to frequently asked questions about California Chapter 7 bankruptcies.
Q: What is a Chapter 7 bankruptcy?
Chapter 7 bankruptcies are for debtors who seek to fully discharge their debts. This means eliminating the debt entirely so that there is no amount due on the debt. "Chapter 7" refers to the codification of the various types of bankruptcy under the Bankruptcy Code.
Q: Can all debts be eliminated?
Most types of debts can be discharged under Chapter 7, but there are a few exceptions. For example, under the Bankruptcy Code, unpaid taxes and child support arrearages cannot be discharged.
Q: Will I have to pay back the debt after my bankruptcy is finished?
No. No payment is required for any qualified debts that are discharged in a Chapter 7 bankruptcy. That being said, some debts are secured by collateral. An example is an automobile loan where the vehicle serves as collateral for the loan. In general terms, for a collateralized debt, the debtor can choose to continue paying that debt or surrender the collateral to the creditor.
Q: Will I lose all my belongings if I file for Chapter 7 bankruptcy?
Typically, no. Most Chapter 7 debtors are able to keep most of their possessions even when their various debts are discharged. This is because, under California law and under the Bankruptcy Code, Chapter 7 debtors can use statutory exemptions to prevent a certain value of assets from being seized and sold to pay off the creditors. With many Chapter 7 debtors, the total value of the exemptions exceeds the total value of a debtor's assets. Further, the administrative costs of taking possession and selling assets can be high. Thus, the only assets that are typically seized and sold are particularly valuable assets that can be easily converted into cash, like jewelry or valuable antiques.
Q: Who can file a California Chapter 7 bankruptcy?
Only debtors with incomes below certain thresholds can use Chapter 7. As a rule of thumb, any unmarried California debtor earning less than $50,000 a year will be eligible. Many debtors making more than that are often eligible, but the court uses a complicated formula to determine eligibility. However, even debtors who are not eligible to use Chapter 7 can still obtain bankruptcy relief by filing under Chapter 13.
Q: What is the process and how long until I obtain debt relief?
A California Chapter 7 bankruptcy begins with the filing of a bankruptcy Petition. From that point forward, debt relief is immediate. Creditors must cease any and all efforts to collect on debt. So, no more harassing collection calls or letters. Most Chapter 7 cases are completed within about six months.
Contact an Experienced Debt Relief and Debtors’ Rights Attorney
For more information, contact the Debtors’ Rights attorneys at Guardian Litigation Group. We can help if you think bankruptcy is the right option. We have the tools and experience you need. Our mission is to provide unparalleled legal services and support for those being crushed by their debts and harassed by their creditors. We can also help with debt settlement negotiations for an individual creditor or a group of creditors. We can be reached via our contact page or by phone at (800) 316-3133.