Los Angeles Attorneys - Chapter 7 Bankruptcy
Chapter 7 bankruptcy is liquidation bankruptcy. Liquidation means that assets are sold (liquidated) in order to satisfy as much creditor debt as possible. However, not all assets are sold in a Chapter 7 bankruptcy. There are certain assets which fall under California's exemption laws, and exempt property and possessions cannot be sold for the benefit of creditors. California has two separate sets of exemption laws that a creditor can use when filing for Chapter 7 bankruptcy, however, once you choose a particular set of exemptions, you must use those exemptions for all property and possessions that you own - you cannot pick and choose your exemptions using both sets of exemption laws.
In some cases, the person filing for bankruptcy has very little in terms of possessions and property. These types of cases are called "no-asset" cases, because there are no non-exempt assets for the bankruptcy trustee to distribute to creditors. If this is the case in your circumstances, you will be allowed to keep your property that you own while still seeking the protection offered by bankruptcy.
While Chapter 7 is a good option for many lower-income individuals who may need bankruptcy relief, not everyone can qualify for Chapter 7 bankruptcy under the new laws. You must meet income guidelines and be unable to pay off your debts as determined by a specific legal formula. In addition, you must attend a court-approved financial counseling/debt management class within the 180 days prior to your bankruptcy filing in order to have your bankruptcy approved. In some instances, you may be able to file for bankruptcy before attending the course, but it is generally a better idea to take the class beforehand so that there are no delays with your case.
If there are certain secured assets that you need to keep paying and you have the means to continue paying them, you can reaffirm the debt before your Chapter 7 bankruptcy case is concluded, and continue making payments as you did before. However, the automatic stay will not apply to reaffirmed debt, and any penalties that your creditor chooses to enact for missed payments will apply.
The new laws regarding Chapter 7 bankruptcy can be confusing or even intimidating for those who just want to take advantage of the financial freedom that bankruptcy provides. This is why it is so important to contact a reputable Los Angeles County Bankruptcy Attorney as soon as possible in the process. Get in touch with one of our firm's expert Los Angeles County Bankruptcy attorneys today; we'll provide you with a free initial case evaluation that can help you to understand the benefits of bankruptcy and whether or not Chapter 7 bankruptcy is an option for you.