Chapter 7 Bankruptcy Lawyers in Ventura
The bankruptcy lawyers at Rounds & Sutter have years of experience helping California individuals and families struggling with debt. We are ready and able to advise and represent individual debtors on their options to reduce or eliminate their debt, and if bankruptcy is the best option, help clients successfully navigate the California bankruptcy procedures. If you are facing mountains of credit card debt, medical bills, or other consumer debt, a Chapter 7 bankruptcy might be the best option to eliminate your debt. Reach out to the compassionate and dedicated Southern California bankruptcy attorneys at Rounds & Sutter for advice, representation, and assistance with your individual debt.
Wiping the Slate Clean with Chapter 7
Chapter 7 is a liquidation bankruptcy. Your non-exempt assets (if you have any) may be sold off by an appointed trustee, and the resulting proceeds will be used to pay off your creditors. Regardless of whether your creditors are fully or partially paid off in the process, all of your remaining covered unsecured debt will be discharged at the conclusion of the proceeding. The process generally takes 3-4 months.
As soon as the process is begun and your bankruptcy case filed, an automatic stay will go into effect, which will prevent any creditors from trying to collect on your debts, such as by filing or continuing any lawsuits, garnishing your wages, or harassing you with collection efforts.
What Assets Are Sold?
There is a common misconception about Chapter 7 bankruptcy that all of your worldly possessions will be collected and sold. This is a myth. Many, if not most, of your assets will be exempt from the bankruptcy proceeding. In fact, many debtors are able to claim exemptions for all of their property and do not lose any property as a result of the proceedings.
The California bankruptcy code has a long list of exemptions in place to protect property from being included in the asset collection and sale. Your bankruptcy attorney will help you decide whether to choose “704” exemptions (better for individuals with significant equity, for example, in real estate) or “703” exemptions (better for individuals who have large bank accounts or other valuable assets). Exemptions include things like personal property, bank account balances, personal use vehicles, and a series of “wildcard” exemptions that allow you to exempt personal property up to a certain value.
A savvy California bankruptcy lawyer can help you maximize the use of exemptions in your bankruptcy, minimizing the amount of property you will have to surrender to obtain a Chapter 7 discharge. The rules can be complex and archaic, and failing to utilize them to their maximum potential means losing more of your property in bankruptcy. A seasoned bankruptcy attorney is worth having in your corner.
Eligibility for Chapter 7
To qualify for Chapter 7, you must pass what is known as the “means test.” The means test generally assesses your income level and determines whether you should be able to pay off your debt without obtaining a bankruptcy. If your income level is below the California state median income, then you automatically qualify for Chapter 7. If your income is above the median, there is a more involved test that will be used to determine if you are eligible. The higher your disposable income, the less likely you are to qualify for Chapter 7.
The means test looks to the debtor’s average gross income for the last six months, while deducting necessary living expenses, based on standards issued by the IRS. The living expenses are set at the national level but are modified based on the city in which the debtor lives. Your actual expenses may exceed those set by the means test; a dedicated California bankruptcy attorney can help you strengthen your chances of qualifying for Chapter 7 by incorporating, as widely as possible, all of your potential qualifying expenses.
Is Chapter 7 Right for Me?
Chapter 7 bankruptcy is an attractive procedure for anyone facing large amounts of unsecured debts, assuming they are eligible under the means test. Unsecured debts are those that are not already attached to assets such as your home or car. Typical unsecured debts that are dischargeable in Chapter 7 include things like credit card debt or medical bills.
The most obvious advantage of a Chapter 7 bankruptcy is that the result is a complete discharge of all covered types of debt. Your slate will be wiped clean, and you can start fresh with a new financial outlook if you can get away with exemptions covering most or all of your personal property, even better.
Chapter 7 does not eliminate all types of debt. Certain types of tax debts, child support obligations, and loans secured by collateral such as car loans or mortgages are not dischargeable in Chapter 7 (unless you choose to surrender the collateral, which means losing your car or home). Student loans are also generally not dischargeable. These debts will remain after a Chapter 7 discharge, meaning that secured creditors will still be able to, for example, repossess your car or foreclose on your home if you are unable to pay. Student loan providers and the government will still be able to collect. That being said, these secured creditors will no longer be able to go after you personally following a Chapter 7 discharge, even though they can still foreclose. If the lion’s share of your financial troubles includes these other forms of debt, then you may be better off pursuing a Chapter 13 bankruptcy.
Speak with a Dedicated Ventura Bankruptcy Attorney
If you are facing significant consumer debt and are considering bankruptcy, speak with the compassionate and dedicated Chapter 7 bankruptcy lawyers at Rounds & Sutter for a free consultation. Reach out to our offices in Ventura, Santa Barbara and Westlake Village, and start your journey towards a debt-free life.