Do you have credit card, medical, or other unpaid debts? Have you lost a lawsuit and have an Abstract of Judgment recorded against you? Is there a lien on your home?
Depending on your income and the value of your assets a Chapter 7 bankruptcy filing could be a quick and painless method of clearing up your debt and getting a fresh start on your financial life.
Liquidation
Chapter 7 is considered a “total liquidation” of your non-exempt assets. In Chapter 7 the bankruptcy trustee will conduct a detailed review of all of your assets and liabilities. If you have “non-exempt” assets the Trustee can sell those assets and distribute the money to your creditors.
Lien Stripping
Although you cannot do much with a regular mortgage in Chapter 7, you can use Chapter 7 to remove involuntary liens – liens resulting from a court judgment or recorded abstract of judgment. There are frequent complications as well as a number of factors involved in stripping off an involuntary lien and it is important to seek experienced counsel to make sure the process is done properly.
Frequently our office sees clients whose former attorney did not think to remove a lien during the bankruptcy. Sometimes these liens do not come to light or no one knows about the recorded lien until years after the bankruptcy case has been closed. Most frequently these liens are discovered when the former debtor wants to refinance or sell their property. Our office is skilled in filing the necessary paperwork with the court to try and remove these “forgotten” liens.
Exemptions
Just because you are filing for bankruptcy doesn’t mean you are going to lose everything you own. The bankruptcy laws provide for “exemptions” – property that is protected and not subject to being sold to pay your debts.
There are a number of types of property that have specific exemptions: real estate, cars, jewelry, retirement accounts, and household goods to name a few.
In California we also have a ‘wildcard’ exemption that allows the debtor to exempt over $28,000 worth of any property owned by the debtor. Of course, there are specific limits to this exemption, but – generally – a debtor could exempt $28,000 in gold bars if necessary.
When I file Chapter 7 for my clients I work as hard to ensure that the client isn’t forced to surrender property to the Trustee without a good reason and prior warning.
Qualification
Prior to filing a Chapter 7 bankruptcy it is important to make sure that you are eligible. There are a number of critical factors to qualifying including your gross monthly income (for the six months before filing) and the total value of non-exempt assets owned by the filer.
Making this determination is a job for professionals – frequently an individual with a higher income may believe they do not qualify for Chapter 7. Sometimes an experienced bankruptcy professional can find loopholes and ‘tricks’ to help the debtor qualify.
Call us! Let us fully evaluate your case to make sure you are filing the proper type of bankruptcy case.
