HomeBankruptcy – Chapter 7 and 13

Bankruptcy is truly a fresh start

Our office has been assisting clients and businesses by filing for Bankruptcy since 2011. We represent both individuals, couples, and businesses with Bankruptcy protection. Chapter 7 offers a truly fresh start for those who qualify. The Federal Bankruptcy law have created a “Mean’s Test” in order to set a bar to qualify for bankruptcy. As you can guess, Bankruptcy laws are complicated and were drafted to protect creditors and not debtors. That is the reason you need experienced, educated, and passionate legal counsel on your side. If you court grants your discharge, you are no longer legally required to repay your debts. At that point, you can move on with your life debt free. Starting in 2005, bankruptcy relief has become much harder to obtain, so it’s important that you seek sound advice and do what’s best for you.

Chapter 7

A Chapter 7 Bankruptcy can eliminate your debt and offer you a truly fresh start. Many good people are struggling through bad times right now, usually due to unforeseen events such as unemployment, illness, stay-at-home orders, or some other hardship.

A Chapter 7 Bankruptcy, also known as Liquidation is the most common type of bankruptcy filed. If you are considering and ultimately need to file, you’re clearly not alone. Plenty of good people need help, and if you qualify, you can keep all of your exempt property, and eliminate most, if not all, of your debt.

Keep Your Exempt Property

In California, a debtor can elect from one of two categories of exemptions (CCP 703 or 704), depending on the type of property owned and the amount of equity that exists. It is our job to help you determine which set of exemptions are right for your and your situation. If you qualify, you may be able to keep certain exempt property such as:

Home (primary residence)
Vehicle(s)
Home Furnishings
Social Security and Disability Benefits
401ks & IRAs
Pensions and other Qualified Retirement Plans
Tools of the Trade (Business)
Alimony and Child Support
Adoption Assistance
and more

Before withdrawing money from your 401k or IRA’s to pay your debt, please contact us. You may be able to keep your money you have worked so hard for, and eliminate your debt through a bankruptcy petition.

Eliminate/Discharge Your Unsecured Debt

Through a Chapter 7 bankruptcy, you (individual or business) can discharge most, if not all, unsecured debts like:

Credit Cards & Charge Cards
Personal loans
Business debt
Medical Bills
Utility bills
Pay day loans
Unpaid Taxes (min. 3 years old – this is a complicated issue and would need to be discussed in more detail, but very possible)
Lawsuits, Judgments.

Chapter 13 Bankruptcy – Payment Plan

Chapter 13, is known as a “wage earner” bankruptcy. In essence it’s a legal debt repayment plan. It is designed to help people with regular income keep their home, cars, and other non-exempt property, all while giving time to repay a portion of their debt, interest free and without late fees and penalties. A Chapter 13 plan can be as short as months or as long as five years.

The major difference between a Chapter 7 and a Chapter 13 is that in a 13 you submit a proposed plan to the Court with terms based on your disposable income. Upon approval, you make one monthly payment that is applied toward all of your debts. At the end of the program, any remaining unsecured debt typically gets wiped out and other secured debts can be discharged as well.

While debtors typically repay only a part of their debt, the greatest benefit to a chapter 13 is two fold. 1. You get time to repay debt and 2. You can retain more assets than in a Chapter 7.

Keep All of Your Property, Whether Exempt or Not

Unlike the restrictions in a Chapter 7 Bankruptcy, with a Chapter 13 bankruptcy, you may keep all of your property including, but not limited to:

Home, Vacation Homes, Investment Properties
Vehicles, RV’s & Motorcycles
Business Property, Assets & Inventory
Any property that was otherwise not exempt

Repay A Portion of Your Unsecured Debt

A Chapter 13 may be used to reduce unsecured debt obligations significantly for example you may only have to repay a portion of the debt. Developing a Chapter 13 plan is a process that takes time and expertise.

What to bring to the Bankruptcy appointment?

In order to have a fruitful conversation please bring or know the following information:

Amount of Debt you owe (in general);
Whom you owe debt to – such as Discover, MasterCard, etc;
What assets you own or are paying on;
Have you co-signed any loans?;
How many people live in your house;
The value of your home;

There is a lot to talk about but its the first step in solving debt issue. Don’t worry, you are in a judgment free zone and the meeting will be with a educated, relaxed and most importantly compassionate professional.