Chapter 7 Bankruptcy Attorneys in Fresno
Liquidating Your Assets, Discharging Debts
Are you finding yourself feeling crushed under overwhelming debt and financial
obligations? If your financial situation is holding you back from a reasonable
repayment plan to your creditors, you may qualify to file for
bankruptcy under Chapter 7. With Chapter 7 bankruptcy, a trustee will help you liquidate
many of your eligible assets and in turn, have qualifying debts discharged
or reduced by your creditors. While chapter 7 is not for everyone, it
is a helpful and effective means of debt management for those that do
qualify and are equipped with capable legal guidance.
Arnold Law Group, APC can help you understand your options when it comes
to bankruptcy and determine whether Chapter 7 is the best choice for you.
Call today at (559) 900-1263!
Debtors who file for Chapter 7 bankruptcy have the opportunity to eliminate
their legal obligations to pay unsecured debt.
Types of debt that can be eliminated in a Chapter 7 bankruptcy include
but are not limited to:
- Credit cards
- Medical bills
- Utility bills
- Personal loans
What debts are not dischargeable?
Debts for property, such as houses, cars, boats, and recreational vehicles
are classified as secured debts. If you have this type of debt, you can
eliminate the debt but you may have to have that property liquidated.
You also may be able to reaffirm the debt and keep the property. Not all
debts are dischargeable, however.
Common types of debt that cannot be discharged include:
During a case evaluation, our firm can discuss the options available to
you and provide you with caring and knowledgeable legal counsel. We can
analyze your debts to determine how bankruptcy can help you and which
chapter of bankruptcy to use.
Qualifying for a Chapter 7 Bankruptcy
To file for a Chapter 7 bankruptcy, individuals must pass a "means
test." If your total monthly income over the next 60 months is $7,475
or less, then you may be eligible to file for a Chapter 7 bankruptcy.
If it is $12,475 or more, then you cannot pass the means test.
If you fail to pass the means test, you may need to file for Chapter 13
bankruptcy instead of Chapter 7 bankruptcy. In a Chapter 7 bankruptcy,
debtors typically liquidate their assets to repay creditors and wipe out
their debts. In a Chapter 13 bankruptcy, debtors may maintain control
of their property in exchange for repaying their debts using a payment
plan over three to five years.
The Bankruptcy Process
To initiate your bankruptcy case, you'll have to file a number of forms
with the bankruptcy court in your area. These forms include details about
your finances, property you own, your current outstanding debts, your
expenses, and property that you have recently sold or given away.
When you file for bankruptcy, you'll need to attend a credit counseling
course intended to help individuals improve their financial literacy and
spending habits. The court will also assign a bankruptcy trustee to your
case. Bankruptcy trustees are part of the United States Trustee Program
under the Department of Justice (DOJ) and work with bankruptcy courts,
debtors, and creditors to ensure the bankruptcy process goes smoothly.
Importantly, trustees also attempt to ensure that creditors recoup as much
of their debts as they can before the court clears any remaining dischargeable
debts. For this reason, having legal counsel by your side who can advocate
for you during your bankruptcy is crucial.
After filing for bankruptcy, the trustee will set up a meeting for you
(the debtor) and your creditors called a "creditors meeting."
During this meeting, debtors can testify to the court and their creditors
regarding their debts.
After the meeting, the court will work with the debtor, creditors, and
bankruptcy court to establish how creditors will be repaid. Generally,
debtors must liquidate their property to repay creditors in Chapter 7
bankruptcies.
Certain property you own will be exempt from the bankruptcy process. For
example, family heirlooms, motor vehicles the debtor needs to drive to
work, necessary clothing, and other types of property are usually exempt,
meaning creditors can't claim them to repay debts.
Many debtors have secured debts, such as loans that they've pledged
towards property like a house. If you want to maintain that property,
you need to continue paying for that debt - otherwise, the creditor could
foreclose on the property or repossess it. Additionally, there are certain
debts you can't clear with a Chapter 7 bankruptcy, such as outstanding
child support or alimony payments and student loans.
It's worth noting that even when creditors
can claim certain property to repay debts, many will choose not to do so since
the property available is worthless to them.
Once the debtor has repaid creditors as much as they are able, the court
will clear any remaining dischargeable debts and finalize the bankruptcy
case. Certain aforementioned types of debt, such as child support or student
loans, are almost never eliminated as part of Chapter 7 bankruptcy cases.
Contact Our Bankruptcy Lawyers in Fresno
At Arnold Law Group, APC, we can help you complete the means test and determine
whether you will qualify to file for bankruptcy under Chapter 7. If your
average monthly income during the past six months is more than the monthly
median income of an average California family, you may not be eligible
for Chapter 7 bankruptcy. If your income is below the average family,
then you can move forward with filing under this chapter.
Filing under Chapter 7 can provide many benefits. Once your bankruptcy
petition is filed with a federal bankruptcy court, creditors receive notice
that you have filed and will not be able to contact you to collect payments.
With this automatic stay in place, you receive many protections.
Contact our firm
at once to learn more about how we can help you with this process.