Chapter 7 Bankruptcy
A Chapter 7 Bankruptcy can eliminate most or all of your unsecured debts and give you a fresh start. We will evaluate your case and determine whether Chapter 7 bankruptcy is appropriate in your case
When considering a Chapter 7 bankruptcy, there are detailed eligibility requirements that must be examined. Generally, if your income is below the California median income for your household size, you will qualify to file a Chapter 7 bankruptcy. However, in many cases, you may qualify for Chapter 7 bankruptcy even if your income is greater than the California median income for your household size.
In addition to the eligibility requirements, it is important to speak with a qualified attorney before filing Chapter 7 bankruptcy so that you can be sure that any assets you intend to keep will be protected or “exempt” from creditor claims and ensure that Chapter 7 is appropriate in your individual situation.
Who is a Good Candidate for Chapter 7 Bankruptcy?
Generally speaking, Chapter 7 works best for people who:
- People who have a lot of credit card debt and/or medical debt – Bankruptcy is designed to completely eliminate unsecured debts like credit card debt and medical bills. Chapter 7 works quickly. You don’t have to wait years for a clean slate and a fresh start.
- People who are being harassed – folks receiving collection calls and notices. Let’s face it, bill collectors usually don’t just go away. As your debt becomes older, collectors ramp up their efforts typically at 3 months, 6 months and 9 months when the lawyers are often assigned your case for legal collection. The power of Chapter 7 – Once you file Chapter 7, collectors are legally prohibited from contacting you in any way. Period. Collectors must deal directly with the bankruptcy court instead. Some don’t have the infrastructure and will often write off the debt right then and there. Seems impossible, we know, but those calls, letters and visits will stop!
- People who do not own much property – Chapter 7 property protections vary according to state laws, but, generally speaking, Chapter 7 offers less protection for your property than Chapter 13 bankruptcy. However, Chapter 7 exemptions may allow you to keep your home, car and other valuable items like work tools, furniture, clothes, appliances, photos and books.
- People who do not have enough income to pay off bills – In order to qualify for Chapter 7 bankruptcy, you must pass the means test. A Los Angeles bankruptcy lawyer can help you with this test, which looks at your income and debts to determine true need.
- People who have less that platinum credit – While it’s true that bankruptcy often negatively affects your credit score, chances are you already have a low credit score, and that may not be a huge concern. Once you discharge your debt, not only can you work to improve your score, many creditors will be open to extending people credit once again for a variety of reasons. One reason is you cannot do another bankruptcy for some years and you are a better risk than many others. Yes! It is possible to get auto or home loans after a bankruptcy.
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