What Is Chapter 7 Bankruptcy? Who Is Best Suited For A Chapter 7?
Chapter 7 is for someone who is over-extended. If they do not own a home or it does not have substantial equity, then this is a good option for them.
What Debts Are Discharged In A Chapter 7 Bankruptcy?
Most debts are dischargeable. However, family support and some types of taxes are non-dischargeable.
Additionally, you may consider filing for Chapter 7 protections if you have income tax debts that are more than three years old and are not a result of tax fraud.
You should note, payroll taxes and trust fund taxes are not discharged.
What Assets Can I Keep In A Chapter 7 Bankruptcy?
In California, Chapter 7 bankruptcy exemptions include:
- $600,000 in equity in the home in which you reside or intend to reside within;
- Some equity in one car;
- Personal belongings;
- And more…
Are There Downsides To Chapter 7 Bankruptcy?
A poorly-planned Chapter 7 bankruptcy can result in the loss of your home and/or substantial assets. Trustees who are appointed in these Chapter 7 cases do not represent the debtor.
What Could I Potentially Lose In A Chapter 7 Bankruptcy?
Things you could potentially lose in a Chapter 7 Bankruptcy include:
- A house with too much equity;
- A second home;
- Some of your money;
- And more…
Many times people say, “I can do this myself.” They read the instructions on a website and they file their case. Then, when they go to court, they are in for a rude awakening and realize too late that they needed a lawyer all along.
You have to understand, the trustee is not going to cut you a break.
Some can still salvage their bankruptcy at this point, but you need to go see a lawyer. Only an experienced bankruptcy attorney will know the steps you could take and the exemptions that you could claim – so you must go to somebody with knowledge.
What Is The Means Test In A Chapter 7 Bankruptcy?
Since 2005, the Bankruptcy Court has used the means test. The means test is the median income of the state in which you reside combined with your household size.
If you make too much money to file a Chapter 7, you have to file a Chapter 13 and pay your net disposable income to your creditors over five years.
What Is The 341A Meeting Of Creditors? Does It Take Place For All Types Of Bankruptcy?
It’s the first meeting of creditors under Section 341A of the Bankruptcy Code. There is a 341A meeting, no matter what chapter you file, 7, 11, 13. In this meeting, the trustee meets the debtor about 30 days after the case is filed and asks questions about assets and liabilities.
How Long Does A Chapter 7 Bankruptcy Take?
Generally, Chapter 7 bankruptcies take 90 days from the filing date to the discharge of debt. However, this can sometimes take longer.
For more information on Chapter 7 Bankruptcy In California State, an initial consultation is your next best step.
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