CHAPTER 7
Who is eligible for Chapter 7 bankruptcy?
Chapter 7 bankruptcy--also known as liquidation bankruptcy--is the most common type of bankruptcy. It's called liquidation bankruptcy because after you file, ALL YOUR DEBT is discharged for good. The main reason to file for liquidation bankruptcy is to discharge debts from credit cards, medical bills, auto loans, and mortgages.
It's important to remember that some debts are non-dischargeable, which means you will still owe the debt after your Chapter 7 bankruptcy is closed. These debts generally include most recent taxes, court ordered child support, alimony, as well as most student loans, court fines, criminal restitution, and debts from fraud or misrepresentation.
What is Eligible?
Since Chapter 7 bankruptcy is designed for average and low income individuals, the high number of liquidation bankruptcies has led to more restrictions, so qualifying for Chapter 7 is not as easy as it used to be. BLG strongly recommends to never file for bankruptcy without an exhaustive consultation with an experienced bankruptcy lawyer first.
Eligibility for Chapter 7 bankruptcy is determined by a “means test.” An experienced California Chapter 7 bankruptcy lawyer at Bandari Law Group can examine your financial position and then offer you practical advice regarding the “means test,” bankruptcy, and your other legal options if bankruptcy isn’t the best route for you.
What are the major benefits of Chapter 7 Bankruptcy?
Avoid Judgement Liens
It can be used to avoid judgment liens on both real estate and personal property.
Eliminate Debt
It can be used to wipe away unsecured debt such as credit cards and medical bills and eliminate any and all collection activity associated with those debts.
Keep Driving
It can be used to reinstate a driver’s license.
Protect Your Assets
It can be used to stop wage garnishment or the levying of a bank account.
End Lawsuits
It can often be used to put an end to a pending lawsuit and any possible debt associated with that lawsuit.
Who is a good candidate for Chapter 7 bankruptcy?
You may be a good candidate for Chapter 7 bankruptcy if any of the following apply to you:
Income
You have had a drop in income over the past six months.
Unsecured Debt
You have a lot of unsecured debts that continue to accumulate high amounts of interest.
Wage Garnishment
You are facing wage garnishment or any other form of collection activity from your creditors.
Litigation
It can be used to stop wage garnishment or the levying of a bank account.
Low on Funds
You have a substantial amount of unsecured debt that you simply cannot afford to pay back.
How do I know if Chapter 7 bankruptcy is right for me?
Although Chapter 7 bankruptcy is a very powerful tool, it is not always the best choice for everyone.
Speak with a Los Angeles Bankruptcy attorney today to determine if filing for Chapter 7 bankruptcy is the right option for you.