Chapter 7” refers to a chapter within the United States federal bankruptcy law that allows qualifying debtors to eliminate most kinds of unsecured debt.
A Chapter 7 bankruptcy can eliminate most filers’ debts within a few months. As part of the process, filers may also be required to surrender certain assets and property to creditors as payment.
At Khan Law, we help consumers and small-business owners take advantage of the benefits of this extremely powerful and flexible debt-elimination option. We serve clients in Dublin, Livermore, Fremont, Pleasanton and throughout the Tri-Valley and East Bay area.
Among the many debts you can eliminate through a Chapter 7 business or personal bankruptcy are
There Is No Reason to Fear a Personal or Business Bankruptcy
Although the word “liquidation” may sound intimidating, the truth is very few people who file for Chapter 7 bankruptcy end up surrendering assets in this way.
Most often, the bankruptcy trustee determines that a no-asset case exists, meaning that the filer has no assets from which creditors can benefit. Another important factor is that certain assets, such as a filer’s home or vehicle, are exempt from liquidation up to certain values. What this means is that Chapter 7 bankruptcy typically allows filers to keep most, if not all, of their properties.
As long as your car and mortgage payments are current, and you own no significant equity in your property, our law office should have no problem arranging for you to reaffirm these debts while continuing to make timely payments. Put another way, you can file for Chapter 7 and still keep your house and automobile.
Although, after filing for Chapter 7, your credit rating may suffer temporarily, it can be rebuilt quickly and easily.
Other Advantages of Chapter 7 Bankruptcy
As soon as your bankruptcy filing is completed, the judge issues an “automatic stay” that our attorney can use to halt all wage garnishments, harassing creditor calls and bill collection efforts against you. It also stops all lawsuits against you. Further, your bank cannot be authorized to seize money from your accounts.
For the duration of your bankruptcy proceeding, you will receive a “timeout” on financial collections. By the time your bankruptcy is completed, the debts that caused these headaches should be discharged.
Will I Qualify For Chapter 7?
Not everyone qualifies for Chapter 7 bankruptcy, nor is every indebted person perfectly suited for it. High-wage earners and property owners may benefit from a Chapter 13 bankruptcy or another debt reduction strategy. Whatever your circumstances, we can advise you of a strategy tailored to your needs.
To meet with our conscientious and helpful Chapter 7 bankruptcy lawyer, contact Khan Law online or by calling 1-925-264-9083. We are eager to meet with you to discuss your circumstances, answer your questions and pursue your options for life-changing debt relief.
If you are overwhelmed by debt, filing for bankruptcy may allow you to eliminate or reduce your debt.
By pursuing Chapter 7 bankruptcy, you may be able to discharge most if not all of your unsecured debt — debt that is not backed by collateral, such as credit card debt and medical debt. You may still be responsible for your secured debts such as your mortgage and auto loan.
To understand bankruptcy’s effect on your specific secured and unsecured debts, it is important to discuss your case with an experienced bankruptcy attorney. At Khan Law, we help people throughout the Tri-Valley and East Bay region learn about and exercise their debt relief rights under the U.S. Bankruptcy Code.
We are passionate about bringing those who feel imprisoned by debt to celebrating the joys of financial freedom. We help our clients access debt elimination, and we give them tools to manage financial obligations that remain.
Many people who come into our offices have questions about bankruptcy’s effect on specific debts. Every case is unique, and several factors influence whether specific debts are eliminated or reduced.
The following is a list of commonly held debts and explanations of how they are typically, but not always, affected by bankruptcy:
Vehicle Loans : Auto loans are secured debts. If your payments are current, however, we can likely arrange for you to keep your vehicle.
Pending Lawsuits: Pending lawsuits must be disclosed as assets in bankruptcy. A trustee will then determine whether the potential proceeds should be paid to your creditors. However, we may be able to exempt the value of the lawsuit so the trustee cannot go after the proceeds.
Student Loans: In most cases, student loan debt cannot be discharged. However, you may be able to adjust your payment plan. We will help you understand whether filing for bankruptcy would eliminate other debts, making it possible to afford your student loan payments.
Child Support & Alimony: These cannot be discharged in bankruptcy.
Tax Debt: Generally, old federal and California income tax debts can be discharged. It is important to talk to your bankruptcy attorney about whether you qualify for the elimination of tax debts.
Can You File For Bankruptcy & Keep Your Property?
It is a commonly held myth that filing for bankruptcy means you surrender all of your property. Even those who pursue Chapter 7 bankruptcy, which is known as liquidation bankruptcy, are often able to keep most if not all of their property.
Khan Law helps individuals and small businesses in the Tri-Valley and the East Bay area use bankruptcy exemptions to protect their assets.
What is exempt property? It is property that cannot be taken away when you file for bankruptcy.
California Bankruptcy Exemptions
If you have lived in California for at least two years, you can choose to make use of one of two sets of state bankruptcy exemptions.
Our founding attorney, Alia Khan, works with clients individually to determine which set of exemptions is most preferable in their situations. The following are a few of the more popular exemptions, effective as of April 2013. They will be updated in April 2016.
Bankruptcy Exemptions Under Section 703
Homestead: Protect up to $25,575 in equity in your home.
Wild card: Protect up to $1,350 equity in any asset. If you do not use the entire homestead exemption, you can use the unused portion as a wild card, too.
Household furnishings and other goods: You may keep all household goods, clothing and furniture as long as no single item exceeds $650 in value.
Jewelry: You may keep jewelry that does not exceed $1,525 in total value.
Vehicle: You are allowed to protect up to $5,100 equity in one motor vehicle. You may use the wild card exemption to protect excess vehicle assets.
Bankruptcy Exemptions Under Section 704
Homestead: Single people with no dependents may protect $75,000 in equity; families or heads of household may protect $100,000; those 65 and older and those with disabilities may protect $175,000.
Household furnishings and other goods: You may keep all furnishings, clothing and appliances that are reasonably necessary.
Jewelry, heirlooms, art: You may keep up to $7,625 worth of these items.
Vehicle: Protect up to $2,900 equity in vehicles.
Wage garnishment can be stopped. Lawsuits over money can be stopped. Harassing phone calls can be stopped. Your credit can be repaired. A bankruptcy isn’t forever. Let Khan Law help restore your financial freedom.