Chapter 7 Bankruptcy in California
One does not plan on entering a period of financial crisis. Loss of a job, illness or an injury can impact an individual’s ability to pay bills. Referred to as “the fresh start bankruptcy,” a Chapter 7 bankruptcy filing in California requires no down payment and will eliminate all debt not affiliated with child support, alimony, student loan and tax payments.
Under Chapter 7, property can be subject to loss if not included in the bankruptcy filing from the beginning. With a Chapter 7 bankruptcy filing, an individual can keep an owned home if he/she is current on mortgage payments and wants to remain in the home. If one is behind in mortgage payments, the creditor can request the bankruptcy court to lift the stay and proceed with a foreclosure.
Since a Chapter 7 bankruptcy filing can remain on one’s credit report for seven years, there is fear that one’s need for an automobile loan will be compromised by the filing in the future. An individual can obtain an automobile loan within the seven years after filing, with each year that passes post filing being easier than the former. An annual income increase in that time can also help increase one’s ability to acquire an automobile loan.
Chapter 7 Bankruptcy Filing Process
The Chapter 7 bankruptcy filing process is typically the easiest and quickest way to file for bankruptcy in California. The average process will take four to six months, and will cost $299 in filing and administrative fees. It is highly recommended that an attorney is retained for any bankruptcy filing to ensure that it is handled correctly without issue. Before an attorney files the bankruptcy paperwork on your behalf, it is recommended that there is a thorough discussion regarding one’s current financial situation and outstanding debts. At the court hearings, creditors may or may not be in attendance. If there is no pertinent issue at hand, the bankruptcy is typically approved by the court on that day.
Things to Know About Filing Chapter 7 Bankruptcy
Before filing for Chapter 7 bankruptcy, it is important to be aware of the following:
- An individual will not be allowed to file if a prior Chapter 7 bankruptcy filing occurred within eight years, or one did not complete a Chapter 13 Bankruptcy repayment plan;
- If an individual’s income is higher than the median family income for a family of his/her size in California and disposable income, less some expenses, will allow one to repay outstanding debts in five years;
- A Chapter 7 bankruptcy filing will remain on one’s credit report for seven years; and
- Child support, tax debts and student loans are not eligible for Chapter 7 protection.
The Luftman, Heck and Associates Advantage
We at Luftman, Heck and Associates understand the emotional and financial strains of financial debt and the impact it can have on other areas of your life. We will be with you at every step of your bankruptcy, and help ensure that you receive the fairness you deserve throughout your bankruptcy filing. The attorneys at our San Diego law firm have great experience guiding clients through bankruptcy filings and will always strive for the best possible outcome on your behalf.
Let Us Help You Get Started
If you or a loved one are in need of legal representation for a bankruptcy filing and interested in learning more about Luftman, Heck and Associates LLP, please fill out a Contact Form. A member of the firm will contact you directly to discuss your case in more detail and provide additional information about our bankruptcy filing services.