California Bankruptcy Lawyers - Understanding Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also known as “liquidation” bankruptcy, as the non-exempt assets of the person filing for bankruptcy are liquidated or sold in order to pay off creditors. Not everyone who files for Chapter 7 bankruptcy has non-exempt assets, however. This is because there are laws in place that provide for exemptions that can be used to preserve certain types of property. Under California law, there are two sets of exemptions, and if you file for Chapter 7 bankruptcy, you must choose which set of exemptions you will use.

You are free to choose one set of exemptions or the other with out restriction, but you may not pick and choose your exemptions from both sets. For this reason, it is important to carefully evaluate any possessions and property that you own in order to see which set of exemptions will best protect your current holdings. By having the legal representation of an attorney who specializes in California Bankruptcy Law, you can get trusted legal advice about your present situation and how the exemption laws may affect you.

In addition to the exemptions, you will also need to consider the current regulations pertaining to Chapter 7 bankruptcy. Anyone who wants to file for Chapter 7 bankruptcy must first pass a test that is designed to ensure that only people who have no means to repay their debts are allowed to file for liquidation bankruptcy. The means test is divided into two portions – your income level, and your available disposable income.

Your income will be evaluated in comparison to others in the State of California – if you make less than the average California resident, then you may be able to qualify for a Chapter 7 bankruptcy filing in California. However, if you’ve only recently moved to California, your median income may be determined in your prior state of residence. If you have regular income, and that income exceeds your allowable expenses, you will be determined to have disposable income. If the courts determine that this income could repay 25% or more of your debts over a 3-5 year period, then you will not be able to file for Chapter 7 bankruptcy.

The new bankruptcy laws place very precise restrictions on those who wish to file for Chapter 7 bankruptcy in California. Having an attorney who specializes in California Bankruptcy Law can help you to navigate these new complexities without worry. We will handle your Chapter 7 bankruptcy case from start to finish, and we will be able to advise you in advance if you will not qualify for this type of bankruptcy filing. Even if you don’t qualify for help under Chapter 7 bankruptcy laws, you may still be able to benefit from Chapter 13 bankruptcy protection. Regardless, our firm is here to help and we are committed to ensuring that each of our clients is able to take full advantage of any applicable bankruptcy protections. Contact us today and schedule your free, no-risk initial case evaluation as soon as possible – take advantage of the benefits that bankruptcy has to offer, and the experience that a qualified, reputable California Bankruptcy Attorney can provide.