Category: Bankruptcy

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Bankruptcy

Alternatives to Bankruptcy

Bankruptcy can be an effective way to eliminate significant debt. At the same time, the process is time-consuming and often results in a debtor losing ownership of some amount of property. It will also hurt your credit and you will not be able to file again for at least 2-8 years (depending on the type of bankruptcy you filed).

For these reasons, you might want to consider other options first. These include: debt settlement, restructuring and consolidating your debt, selling property, and evaluating your income and expenses.

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Bankruptcy

What Happens to Secured Debts After Filing for Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy is a great option if you are looking to get out from under the weight of significant debt. Through this process, many of your debts will be effectively discharged and you will have a “fresh start”.

However, it’s important to note that different rules apply to debts that are “secured”. Here, while the underlying debt may be canceled, the creditor is often entitled to take back the property that was involved in the transaction (referred to as collateral). 

If you are in this situation, you do have a few options. You may relinquish the property to the creditor, redeem the property, reaffirm the underlying debt, or retain the collateral and pay the money you owe.

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Bankruptcy

Chapter 7 Bankruptcy & The Automatic Stay

If you feel overwhelmed by debt, know that there are always options. One course of action to consider is a Chapter 7 bankruptcy. There are many benefits to this legal process, including what is known as the automatic stay. The stay effectively stops most collection actions and lawsuits against you.

However, keep in mind that there are certain actions that will not be paused by the stay. Further, creditors do have the option of asking the court to “lift” the stay, which allows a collection activity or lawsuit to move forward during the bankruptcy.

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Bankruptcy

What Debts are Dischargeable in a Chapter 7 Bankruptcy?

Most people that file for bankruptcy do so to cancel their debts and have a fresh start. This is referred to in the law as debt “discharge” and is perhaps the most important feature of a Chapter 7 bankruptcy. However, bear in mind that not every type of debt is dischargeable. A non-dischargeable debt means that you would still be on the hook to pay back the money owed once the bankruptcy process is complete.

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Bankruptcy

Am I Eligible for Chapter 7 Bankruptcy in California: The Means Test

Filing for bankruptcy can help you relieve the pressure of mounting debt. Many individuals faced with these liabilities choose to pursue what is known as a Chapter 7 bankruptcy. However, not everyone is eligible for this type of filing.

If you happen to earn enough income and are able to pay your financial obligations, you will not be eligible for Chapter 7. Instead, you would file under Chapter 13. To determine whether you qualify for Chapter 7, the court will use what is known as the “Means Test.” 

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