SoCal Area Bankruptcy Attorney Helping You Move Forward From Debt

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Many people have a stack of bills they can’t pay. That pile of unpaid bills haunts you everywhere you go. It keeps you awake, tossing and turning, at night. It distracts you at work and when you should be enjoying time with your family. And it grows, forcing you to make difficult choices: pay this bill, or pay the rent? Pay that bill, or buy groceries?

Don’t wait until you’ve stopped opening the envelopes because you know you can’t afford to pay what’s inside. Consider Chapter 7 bankruptcy before you get to that point. Bankruptcy can break the stranglehold your debt has on you, giving you a fresh start and allowing you to move forward. In fact, Chapter 7 bankruptcy is often called “fresh start” bankruptcy because it wipes out most of your debt.

You may not have had much choice about how you got into debt, especially if you suffered a job loss, serious medical bills, or were devastated financially by COVID-19. But you do have control over how you get out of debt. Bankruptcy does NOT mean that you have failed financially. It means that you are smart enough to use the tools provided to you under the law to get back on a firm financial footing.

Understanding How Chapter 7 Bankruptcy Can Help You

Here’s how it works: you contact Bankruptcy Forward for an easy telephone consultation. An experienced bankruptcy attorney gives you a free consultation to determine if bankruptcy would help you. If you want to move forward, we process everything else online and review the paperwork with you virtually.

The Automatic Stay

As soon as the petition is filed, your relief begins. Something called the “automatic stay” kicks in. The automatic stay prevents creditors from contacting you regarding your debt until your bankruptcy case is resolved. That means:

• Bill collectors cannot call your house or harass you
• If your home was in foreclosure, the foreclosure process is put on hold
• Your car cannot be repossessed because you are behind on payments
• Any lawsuits against you by creditors must be not be continued
• Creditors cannot garnish your wages
• The IRS must stop any efforts to garnish back taxes

The automatic stay ends when your bankruptcy case does, but by that time, most, if not all, of your debt will have been discharged—wiped out.

Exemptions and “No Asset” Bankruptcy

Under the Bankruptcy Code, you are allowed to keep certain “exempt” property. The bankruptcy trustee is authorized to sell any of your non-exempt property and give the proceeds to your creditors, but that rarely happens. Most Chapter 7 cases are “no-asset” cases, meaning that all of the debtor’s property is exempt, and none gets seized or sold.

Exempt property may include:

• All money in Retirement Accounts (IRA’s; 401(k); 403(b); 457, SEPP, etc.)
• All money in College Savings Accounts
• Cash on hand, up to a certain amount
• Equity in your home or vehicle
• Clothes and personal effects
• Furniture, appliances, and other household items
• Jewelry
• Insurance policies
• Books
• Tools used in your employment
• Income from workers’ compensation claims and personal injury claims
• Certain other assets

There may be more than one set of exemptions from which to choose. Your attorney will help you find the exemptions that maximize the property you keep.

Discharge of Debts

The point of a Chapter 7 bankruptcy is to wipe out, erase, or discharge your debts. Some of the debts that Chapter 7 can eliminate include credit card bills, medical bills, and unsecured personal loans. But there are also some kinds of debt that cannot be wiped out by Chapter 7 bankruptcy. These include:

• Alimony and child support
• Most student loans (unless undue hardship standard met)
• Some tax debt
• Restitution you owe in a criminal case
• Money you owe to someone as a result of a personal injury case against you for drunk driving
• Homeowners’ association fees (unless surrendering property)

In addition, any debt you left off of your bankruptcy petition, whether intentionally or not, cannot be discharged. That’s one reason it is important to be honest with your attorney, and work with an experienced California Bankruptcy attorney to make sure your filings are complete and accurate.

With offices in Seal Beach and Rancho Cucamonga, Bankruptcy Forward represents clients in Los Angeles, Orange, Riverside, San Bernardino, Ventura, and Santa Barbara Counties in California. The firm handles Chapter 7 and Chapter 13 bankruptcy cases in the Central District of California at the three bankruptcy courts in Los Angeles, Riverside and Santa Ana.