Chapter 7

bankruptcy-law

Overview of the Process:

Bankruptcy under Chapter 7 of the Bankruptcy Code is often referred to as “liquidation bankruptcy” or a “straight bankruptcy.” Under Chapter 7, a bankruptcy court can relieve a debtor of the responsibility to pay most of his or her debts but still allow the debtor to keep much of his or her property.

Chapter 7 is the quickest and simplest type of bankruptcy.

More than 63% of the 819,159 bankruptcy cases filed nationally in 2016 were Chapter 7 cases. An even more encouraging bankruptcy statistic is that 95.5% of Chapter 7 filings had their debts discharged.

South Orange County Bankruptcy fights hard for you so that in most cases you retain all your assets.

Can I get protection from my creditors when I file a Chapter 7 bankruptcy?

A debtor begins the bankruptcy process by filing a Petition with his/her local bankruptcy court. Once the Petition is filed, an “automatic stay” goes into effect, and the creditors are prohibited from making any attempt to collect their debt, including attempting foreclosure and repossession.

Will I be able to keep any of my property when I file for bankruptcy?

Exemptions are what allow a debtor to keep property in a bankruptcy proceeding. Under the new bankruptcy laws, we must use the exemptions in the State in which you resided the past 2 years. If you resided in more than one state over the past 2 years, then we must use the exemptions in the state in which you resided for the majority of the time from 2.5 to 2 years ago.

Recent new bankruptcy laws have for the most part backfired. Almost every Orange County bankruptcy attorney, trustee, and judge will tell you they despise the new laws. The new laws have made bankruptcy filing more difficult and have created more work, with no other effect. Bankruptcy cases in Southern California can still be filed as before, and as previously discussed, qualifying gets easier in most cases. In fact, many of the unsecured creditors and credit card issuers are now seeking to overturn the new laws, as they are now getting paid less money in Chapter 13 bankruptcy cases than than they were under the old laws.

South Orange County Bankruptcy is adept at dealing with the nuances of the bankruptcy laws.

Can I qualify for a Chapter 7 bankruptcy?

In order to qualify for a Chapter 7 bankruptcy, you must pass a “means test“. The means test examines your financial records, including income, expenses, secured and unsecured debt.

How long will the Chapter 7 bankruptcy process take?

Click here to view a timeline for an average Chapter 7 bankruptcy in California, available on the U.S. Courts website.
As noted in the timeline, a Chapter 7 bankruptcy is generally completed in about 4 months.

We can help guide you through all mandatory bankruptcy courses.

Mandatory Credit Counseling Course

Prior to filing any bankruptcy case in Southern California, one must now complete a credit counseling course online or over the phone. They generally cost around $50.00 and must be given free of charge if you don’t have the ability to pay for one. The mandatory credit counseling course usually lasts 45 to 60 minutes, and can be taken usually 24/7. A certificate will be issued upon completion and must be provided to our office as a condition of filing your case. Failure to timely file the certificate of completion results in an automatic case dismissal. Most of our clients have indicated so far that they found the course very enlightening and educational. South Orange County Bankruptcy will help arrange for you to comply with this requirement.

Mandatory Debt Management Course

Just as with credit counseling, a debtor is now required to undergo a debt management course after their bankruptcy case is filed. The same fees and time frames apply as with credit counseling. Moreover, it has been our experience that this is one of the most beneficial aspects of bankruptcy, according to our clients.

 

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