For many people in California who are having a hard time with their finances, the Chapter 7 bankruptcy process is a powerful legal way to get rid of crippling debt and start over. This is one of the most common ways to get bankruptcy protection, and it’s made for people who don’t make much money and have a lot of unsecured debt. If you’re having trouble paying your bills, the first thing you need to do to get your financial freedom back is to learn about California Chapter 7 bankruptcy. This includes who can file, the steps that need to be taken, and the types of debt that can be forgiven.
It can be hard to understand California bankruptcy law. That’s why it’s important to talk to an experienced Long Beach, California, chapter 7 bankruptcy lawyer to protect your rights and help you make the best choice for your future.
It’s not possible for everyone to file for Chapter 7 bankruptcy. California, like all states, has specific requirements meant to ensure this form of debt relief is available to those who truly need it. The main problem is the “means test.”
The Means Test: looks at your gross monthly income over the last six months and compares it to the California median income for a family your size. Most of the time, you qualify if your income is less than the norm. If it’s above, you may still be able to pass because the test lets you reduce some living costs. A good California bankruptcy lawyer can do this analysis for you and help you understand the often-complicated rules in California about what expenses are allowed.
Assets to Think About: Most people who successfully file for Chapter 7 bankruptcy don’t have a lot of assets that aren’t protected. For people with a lot of unprotected debt, like credit card or medical bills, but not much valuable property, this is the best way to go. A California bankruptcy lawyer might tell you that Chapter 13 bankruptcy is a better option if you have a lot of assets, like a lot of home equity or investments.
Going through Chapter 7 bankruptcy is a planned court process that usually takes three to six months to finish.
Credit Counseling: You have to take a credit counseling course from an approved service before you can file.
Putting in the Petition: Your bankruptcy lawyer will make a thorough petition for you and send it to the bankruptcy court. This document has a list of all of your assets, bills, creditors, and income.
The Automatic Stay: The moment your petition is filed, an “automatic stay” immediately goes into effect. This powerful court order stops most collection actions dead in their tracks, including harassing phone calls, wage garnishments, lawsuits, and foreclosure proceedings.
Bankruptcy Trustee: A trustee is someone the court chooses to handle your case. The trustee’s job is to check your papers to make sure they are correct and see if you own any non-exempt items that could be sold to pay off your debts.
The 341 Meeting of Creditors: Approximately a month after filing, you will attend a meeting with the manager. Creditors can show up, but they don’t all the time. To make sure the information in your petition is correct, the trustee will question you directly while you are under oath. You will have your lawyer with you the whole time to help you through this.
Debt Discharge: If there are no complications, you will receive a discharge order from the court a few months after the 341 meeting. This order legally eliminates your obligation to pay back most discharged debts.
People in California often worry that if they file for personal bankruptcy, they will lose everything they own. There are, however, “exemptions” in California bankruptcy law that let you keep important property. In fact, most people who file for Chapter 7 don’t lose any debt.
There are a number of exceptions in California that can protect:
A skilled bankruptcy attorney in Long Beach, CA, or anywhere else in the state, will use these protections to protect your assets in a smart way.
The main goal of Chapter 7 bankruptcy is to get rid of your unsecured debts that qualify. Some common loans that can be forgiven are:
It is important to know, though, that not all debts can be forgiven. Below are some debts that California bankruptcy rules usually don’t let you get rid of:
In California, if you want to file for personal bankruptcy, you need a committed and experienced legal team to help you. Chapter 7 bankruptcy is what The Law Office of Stewart Lim does to help people all over California get out from under their heavy debt.
Help from experts on California’s bankruptcy laws: We will carefully look at your finances, let you know if Chapter 7 is the best choice for you, and make sure you understand the differences between Chapter 7 and Chapter 13 bankruptcy.
Full Support: Our team takes care of everything, from correctly filling out the complicated papers to getting you ready for the 341 meeting. We make sure that all of your assets are listed correctly and are safe by using California’s exemption rules.
A Defense Against Creditors: We will stop creditor pressure right away, so you can focus on your fresh start without worrying.
Online resources and articles about bankruptcy can give you general information, but nothing beats getting personalized legal help from a trained professional.
Call The Law Office of Stewart Lim today if you’re ready to stop the collection calls and the constant stress about money. We offer a free, no-obligation first meeting to talk about your case and figure out the best way to move forward.
Our firm has helped people in Long Beach and nearby areas for more than 20 years, and we can help you too. Let our office handle your debts when you feel like they’re too much to handle. We will help you get through the complicated legal system, stop the threats from creditors, and save your money for the future.
Chapter 7 bankruptcy might be the best way for you to deal with your debt. Get in touch with The Law Office of Stewart Lim right away to find out.
Year of industry exprience
The primary difference is how your debt is handled. Chapter 7 bankruptcy is often called “liquidation” because it involves discharging (erasing) most of your unsecured debts without a repayment plan. It’s typically faster, lasting 3-6 months. Chapter 13 bankruptcy involves creating a 3- to 5-year court-approved plan to repay a portion of your debts. A California bankruptcy lawyer can help you determine which chapter you qualify for and which is better for your specific financial situation.
This is a very common fear, but in most cases, no. California bankruptcy law provides exemptions that allow you to protect essential property. You can often protect a significant amount of equity in your primary home and your vehicle. Most people who file for Chapter 7 bankruptcy do not lose any assets. A bankruptcy lawyer in Long Beach, CA, can review your assets and use California’s exemption laws to shield your property.
The means test is a formula designed to determine if your income is low enough to qualify forChapter 7 bankruptcy. It compares your average monthly income from the last six months to the median income for a similar-sized household in California. If your income is below the median, you pass. If it’s above, the test allows for certain deductions, which may still let you qualify. Navigating the CA bankruptcy laws around the means test is complex, so it’s best to have a California bankruptcy attorney handle this calculation.
Yes. One of the primary benefits of Chapter 7 bankruptcy is the discharge of unsecured debt. This includes credit card balances, medical bills, personal loans, and past-due utility bills. Once the bankruptcy process is complete, your legal obligation to pay these discharged debts is eliminated.
Yes. It’s important to understand that not all debts are dischargeable. Under California bankruptcy law, you generally cannot eliminate obligations such as:
Recent income tax debt
Child support and alimony
Most student loans
Court-ordered fines or restitution
A qualified California bankruptcy lawyer can review your specific debts and advise you on which can and cannot be discharged.
A Chapter 7 bankruptcy can remain on your credit report for up to 10 years from the filing date. However, this does not mean you cannot get credit for a decade. Many people begin rebuilding their credit soon after their debts are discharged and can qualify for loans or credit cards within a year or two, often at higher interest rates. The impact of bankruptcy lessens over time, especially as you demonstrate new, positive financial behavior.
