Los Angeles County - Understanding Chapter 7 Bankruptcy

The decision to file for Chapter 7 vs. Chapter 13 bankruptcy has only recently been taken out of the hands of the filer, and placed into the discretion of the courts. In order to qualify for Chapter 7 bankruptcy, your income cannot be too far above the poverty line. Additionally, the courts must determine that you would not have enough income left over to repay at least 25% of your "non-priority, unsecured debt" after taking care of essentials. The types of debt that are considered to be non-priority and unsecured include personal loans and credit cards. Priority debts are debts such as taxes, child support, and spousal support. Once it is established that you meet the income guidelines, then you may be allowed to file for Chapter 7 bankruptcy. However, you must also complete a court approved debt management class prior to filing for bankruptcy, in order to have your bankruptcy case accepted by the court.

There may be circumstances in which your income, as defined by the courts, is not equal to your actual income in your current situation. For example, if you recently lost your job, your actual income would be zero, even if the courts consider your income to be the money you've made for the past six months. In this instance, you may be able to file for Chapter 7 bankruptcy, even if you don't meet the criteria as stated. However, you should also consider what types of debt you have when considering whether or not to file for Chapter 7.

Chapter 7 bankruptcy does not cover all forms of debt. You cannot discharge student loans, tax obligations, child support, and several other forms of debt under a Chapter 7. The types of debt that are generally discharged under a Chapter 7 include personal loans, credit card debt, and other unsecured consumer debt - this is important to keep in mind when planning the type of bankruptcy you need to file. If your obligations consist largely of debt that cannot be discharged, then Chapter 7 bankruptcy may not be for you, even if you qualify. Instead, you may want to consider filing for Chapter 13 bankruptcy, which will allow you to make up those types of missed payments under a court-supervised repayment plan.

Understanding the nuances of bankruptcy law in Los Angeles County can be difficult even in the best circumstances. The financially stressful time during a bankruptcy is not the ideal time in which to learn about bankruptcy law; instead, you can minimize your stress and regain peace of mind when your case is handled by a competent attorney who specializes in Los Angeles County Bankruptcy Law. By hiring legal counsel with experience, expertise and practical knowledge, you will give yourself a distinct advantage when it comes to filing for Chapter 7 bankruptcy in Los Angeles County. You will be able to rest assured that your case is being handled by someone who understands what bankruptcy law means to your unique situation, and that every avenue has been explored when it comes to your financial well-being.

If you are considering filing for Chapter 7 bankruptcy, get in touch with our Los Angeles County Bankruptcy Law Firm today - we have legal professionals available to give you a free initial case evaluation that can help you to understand Chapter 7 bankruptcy and whether or not it's right for your situation. Don't delay - the sooner you have quality legal advice, the sooner you will be able to make the right choices to attain your own financial freedom.