CHAPTER 7 BANKRUPTCY

Chapter 7 bankruptcy (sometimes called a liquidation plan) is often the quickest and easiest form of bankruptcy.  Under Chapter 7, you can usually keep all your possessions and usually eliminate all your unsecured debt.  Chapter 7 bankruptcy will provide you with the fresh start you need to rebuild your life and your future.

The Chapter 7 process

Filing personal bankruptcy begins by determining whether Chapter 7 or Chapter 13 is the best choice for your financial circumstances.  The Law Office of Alec Harshey is experienced in handling both types of bankruptcy.  We will help you determine which bankruptcy process is the right choice for you.

California Chapter 7 bankruptcy gives you a fresh start in these ways:

• It completely eliminates most unsecured debts, such as credit cards, medical bills, money loans, old miscellaneous debt, and some taxes.
• It offers a choice between two systems that permit you to keep a wide range of exempt property, including (but certainly not limited to) your home, specific personal property, and personal tax qualified retirement accounts.

A Chapter 7 bankruptcy is different from a Chapter 13 bankruptcy, under which most debts are repaid within a three to five year period.  

There are certain types of debts that cannot be eliminated under Chapter 7 bankruptcy.  For example some taxes, student loans, and child or family support debts are not dischargeable.  The Law Office of Alec Harshey can determine which of your debts are dischargeable through bankruptcy.

The means test for Chapter 7

To qualify for a Chapter 7 bankruptcy, you must satisfy a means test.  This is a two-part test.

• Under the first part of the test, your monthly income is compared to the median monthly income for a similar-sized family in your state.  You qualify to file Chapter 7 bankruptcy if your income is at or below this median income.  If your income is higher than this median income, you must meet the second part of the test to qualify for a Chapter 7 bankruptcy.
• Under the second part of the test, your unsecured debts and disposable income are calculated.  In essence, if this test determines that you are not able to pay $100 per month over the next five years ($6,000 total) to your unsecured creditors after expenses, you still qualify for Chapter 7 bankruptcy.  

There are exceptions under the means test for business debtors and past and present military personnel.  The Law Office of Alec Harshey can determine if your situation would apply to these exceptions.

Preparing and filing

Once you have decided to file bankruptcy under Chapter 7, you need to itemize your current financial situation, including the following:

• All current income sources
• Monthly living expenses
• Total amount owed on secured and unsecured debt
• All assets and possessions you own, including real estate
• Major financial transactions for the last two years

You also need to gather all important paperwork, such as tax returns, deeds, titles and loan documents.

Once all paperwork and information is ready, the California district bankruptcy court requires filing of a petition and several other forms (called schedules).

Any error or omission can jeopardize the outcome of your petition.  That is why you need a law firm with a reputation for thoroughness and professionalism.  The Law Office of Alec Harshey is well-known for paying close attention to the critical details when preparing petitions.  They make sure that your creditors and the bankruptcy trustees know that they have all information they need to complete the bankruptcy proceedings, before the case is filed and before you appear in court to answer questions, thereby eliminating any unnecessary complications in your case.

Call us

The Law Office of Alec Harshey is the experienced law firm you need to determine what bankruptcy option is best for you and to effectively see your bankruptcy proceeding through to completion.  The Law Office of Alec Harshey can help you figure out whether you should file for a Chapter 7 or Chapter 13 bankruptcy.  The Law Office of Alec Harshey has successfully helped thousands of people just like yourself.

For more information about bankruptcy, refer to our Frequently Asked Questions.

Call the Law Office of Alec Harshey at 866-497-0982 from 9:00 am – 5:00 pm Mondays through Fridays for more information.