Sometimes called a “fresh start” bankruptcy, a “clean slate” bankruptcy or a “liquidation,” Chapter 7 bankruptcy is the best way to take control of your financial situation and start over by eliminating your debts. In Chapter 7 you will wipe out your credit card debts, medical bills, pay day loans, lawsuits, judgments, unpaid balances on repossessions or foreclosures, personal loans, guarantees and more. Your Chapter 7 case will be finished in just 3 to 4 months. A Bankruptcy Trustee reviews your paperwork at a “meeting of creditors” that you attend with Attorney Ty Carss. Most people complete their cases quickly and the get to keep all of their property.
Most or perhaps all of your debts will be discharged in Chapter 7. You will eliminate your credit card debts, gasoline card debt, medical bills, pay day loans, lawsuits, judgments, unpaid balances on repossessions or foreclosures, personal loans, guarantees and more. Of course, there are some limited exceptions to the Chapter 7 discharge of debts. These debts which don’t get discharged are called “nondischargeable debts.” They fall into just a few categories: Child and spousal support; most student loans (but not all), recent debts run up for buying luxury items; and tax debts that first came due in the last 3 years. Older tax debts may be discharged in your Chapter 7 case, so talk to us about the specific rules that apply to taxes. Besides these categories of “nondischargeable debts,” Chapter 7 also may not discharge debts that arise from fraud (like actual fraud, lying on a credit application or writing a bad check). But in these situations, the creditor is required to ask the Bankruptcy Court to “except” their debt from your discharge. If they don’t ask for this kind of an “exception to discharge” within the allowed time limits, then their debts will also be discharged in your Chapter 7 bankruptcy.
Chapter 7 in San Marcos
Every Chapter 7 bankruptcy case has a Trustee who is appointed to represent creditors. The Trustee’s duty is to liquidate or sell assets where possible to pay a dividend to the creditors. Our job as your San Diego bankruptcy lawyers is to protect you and your assets to the fullest extent of the law and to plan your bankruptcy case so that you will get to keep all of your assets. Federal Bankruptcy law and California law combine in your bankruptcy case to allow protection for your assets in the form of “exemptions.” These exemptions represent categories (types and amounts) of property you get to keep. But the laws are complex and it is common for inexperienced lawyers to make mistakes, miss exemptions, claim the wrong exemptions or to fail to protect enough of your property with proper planning before you file your case. When you file Chapter 7 bankruptcy in San Diego, you just choose from 1 of 2 “lists” of exemptions (these lists are set out in California Code of Civil Procedure Sec. 703 and 704. You can learn more about these exemptions and how they apply here. Proper exemption planning requires a thorough knowledge of the law and ways to use the law to protect your property—and this is similar to the kind of tax planning that lawyers and accounts do to protect their clients from paying too much income tax. For example, it may be possible to legally exchange property that is not exempt for property that is exempt. In addition, it is also possible to use more than one exemption to protect a single item of property (sometimes called “cross-claiming”) or to split an exemption between 2 or more items of property. Don’t trust anyone other than a highly experienced bankruptcy expert to make these determinations and to guide your through the pre-bankruptcy planning process.
Bankruptcy is still the best option. Other debt plans make promises, but only bankruptcy delivers.