Chula Vista Chapter 7 Bankruptcy Attorneys
Helping You Defeat Debt
Drowning in bills you know that you cannot pay can be terrifying, especially as you start to receive calls from impatient creditors. A divorce, devastating accident, unexpected illness, or loss of income can all contribute to a situation where you cannot keep up on payments. Before long, late fees, penalties, and interest together can compound your debt and make the problem seem insurmountable. While it is understandable to feel stressed, you may be able to retake control of your finances through filing for Chapter 7 bankruptcy.
Our Chula Vista Chapter 7 bankruptcy lawyers at The Sexton Law Firm are ready to help you defeat debt through filing for bankruptcy. We have a complete familiar with Chapter 7 bankruptcy and can guide you through each step of the process. Our team can determine your eligibility, safeguard exempt assets from liquidation, and help you understand what debts you may be able to discharge. Our goal is to help you escape overwhelming debt and work toward a more financially sustainable future.
Qualifying for Chapter 7 Bankruptcy
You will likely only qualify for either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Chapter 13 bankruptcy is reorganizational in nature but will involve you partially repaying your creditors. If you do not currently have any disposable income, you will likely be eligible for Chapter 7 bankruptcy.
To determine your eligibility, you will need to undergo the California Means Test. First, determine your average monthly income over the last 6 months. Then, compare that number with the median average income for your household size in California. If your income is less than the median average, you automatically qualify for Chapter 7 bankruptcy.
If your income meets or exceeds the median average, you still may qualify for Chapter 7 bankruptcy. You will need to assess your current level of disposable income by subtracting necessary living expenses from your average monthly income. Necessary expenses include food, transportation, some education costs, taxes, and medical care. You can also safely count any secured payments, including payments on your rent, mortgage, or car loan.
Any funds you have left over after subtracting necessary expenses constitutes your disposable income. If you have too much disposable income, you will likely be asked to file for Chapter 13 bankruptcy instead of Chapter 7 bankruptcy. Our team can help assess your eligibility and ensure all qualifying expenses are deducted when determining your level of disposable income.
How Chapter 7 Bankruptcy Works
Once you file for Chapter 7 bankruptcy, you are protected under a court order called the “automatic stay.” This injunction immediately prevents creditors from communicating directly with you and freezes any collections actions. The automatic stay is a powerful feature of bankruptcy and can be used to stop foreclosures, end creditor harassment, and prevent vehicle repossessions. The order remains in effect until your bankruptcy filing has been completed.
With the automatic stay in place, a bankruptcy court will appoint a trustee to oversee your case. They will meet with you and your legal representation to initiate the liquidation process.
You may have heard about liquidation, which involves the trustee selling – or liquidating – nonexempt property to help partially repay your debts. While this can sound scary, the reality is that a Chapter 7 bankruptcy is not meant to leave you without any property. You are able to use a federal or state exemption schedule to protect certain types of assets from liquidation. Our Chula Vista chapter 7 bankruptcy attorneys can help you leverage these exemptions and minimize any liquidation impacts.
Using California exemptions, Chapter 7 bankruptcy filers can generally protect:
- Your primary residence
- A motor vehicle
- 75% of your wages
- Retirement benefits, including pensions
- Public benefits, including unemployment payments
- Insurance proceeds
- Personal property, including jewelry, art, clothing, furniture, and other sentimental items
Every bankruptcy is different. Do not assume that exemptions will automatically save assets that are important to you: Always consult with an experienced bankruptcy lawyer before filing. Our team can evaluate your situation and walk you through what types of property you will be able to safeguard from liquidation.
When liquidation has concluded, the bankruptcy court will generally allow you to discharge any remaining unsecured debts. Unsecured debts include most types of debt that do not have collateral attached, including credit card bills, medical debt, utility bills, and personal loans.
Understand that you will not be able to discharge secured debts like your mortgage or vehicle loans. However, the ability to discharge other types of debt can give you the financial flexibility to redirect funds toward these payments, allowing you to keep your home and car. We can help you explore these options.
We Can Help You Navigate Chapter 7 Bankruptcy
Filing for Chapter 7 bankruptcy can be intimidating, especially if you are concerned about losing your home or other important assets to liquidation. Our Chula Vista Chapter 7 bankruptcy lawyers at The Sexton Law Firm have helped countless individuals and their families leverage Chapter 7 bankruptcy’s many benefits. We can determine whether filing might make sense for you and work to minimize your estate’s exposure to liquidation.
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