Filing for bankruptcy is not something anyone wants to go through, but if you are struggling with debilitating debt and paying off the debt would take more than five years, filing Chapter 7 bankruptcy could be the right move for your financial future. Many individuals in Los Angeles struggling with overwhelming debt choose to file Chapter 7 bankruptcy, a debt relief option that effectively discharges all unsecured debts, including medical bills, credit card debt, personal loans, and debts from foreclosure and vehicle repossession. By declaring Chapter 7 bankruptcy, also known as liquidation bankruptcy, you can eliminate your dischargeable debt for good in as little as four months, without any repayment, which is what many debtors need to get their finances back on track. If you owe more than you can pay, you don’t have to settle for struggling with debt for the rest of your life. Consult our Los Angeles bankruptcy lawyers at Resnik Hayes Moradi LLP as soon as possible to determine whether you qualify for Chapter 7 bankruptcy relief.
Experienced Chapter 7 Bankruptcy Lawyers
Being in debt means different things to different people, and any amount of debt can feel overwhelming, depending on your financial situation and the amount of debt you are comfortable carrying. Our Los Angeles bankruptcy lawyers at Resnik Hayes Moradi LLP understand how devastating debt can be and the adverse effect it can have on the lives of those who find themselves owing more than they can afford to pay, and we are committed to helping debtors find their way to financial freedom. If you are considering filing Chapter 7 bankruptcy in Los Angeles, our seasoned bankruptcy attorneys will represent your best interests in bankruptcy court and throughout the duration of your case, until your debts are repaid or discharged, and we will also help you assess your financial situation so you can avoid facing a similar problem in the future. At Resnik Hayes Moradi LLP, we specialize in bankruptcy and debt relief solutions in Southern California, and each of our firm’s partners is a board-certified bankruptcy specialist, which means they have met rigorous certification standards and demonstrated substantial knowledge and expertise in bankruptcy law. By consulting with our experienced, reputable Los Angeles bankruptcy lawyers, you can get a better understanding of what Chapter 7 bankruptcy entails and whether you qualify for this type of debt relief.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a legal process by which an individual can seek relief from overwhelming debt by discharging some or all of the debt owed. Chapter 7 bankruptcy is the most common type of bankruptcy in Los Angeles, largely because it is the fastest and easiest option for achieving financial freedom. And while some individuals who file Chapter 7 bankruptcy must sacrifice certain assets, the majority do not, which makes this type of bankruptcy even more attractive. Filing Chapter 7 bankruptcy is a great starting point for erasing your debt and rebuilding your credit and financial well-being, but not everyone qualifies for this type of bankruptcy filing and not all debts are dischargeable, which is why hiring a skilled, trustworthy bankruptcy lawyer is always a good idea when seeking relief under a Chapter 7 bankruptcy plan in Los Angeles.
Qualifying for Chapter 7 Bankruptcy
Chapter 7 bankruptcy relief is only available to individuals who pass the qualifying means test, a test intended to weed out individuals who would be able to repay their debts under a Chapter 13 repayment plan. In other words, in order to declare Chapter 7 bankruptcy in Los Angeles, you must demonstrate to the court that you can’t afford to repay your debts. If you were able to do so, you would be better suited to Chapter 13 reorganization bankruptcy, which is a restructuring of your debt into a manageable repayment plan that allows you to repay all or a portion of the debt over the course of three to five years.
There are other restrictions that could affect your ability to file Chapter 7 bankruptcy in Los Angeles. For instance, if you previously received a bankruptcy discharge under Chapter 7 or Chapter 11, you will have to wait eight years before pursuing another discharge in a Chapter 7 case. If you were previously granted a bankruptcy discharge under Chapter 13, you are barred from receiving a discharge in any Chapter 7 bankruptcy case filed within six years of the Chapter 13 case. Even if these legal time limits mean you are not eligible to receive a discharge of debts under Chapter 7 bankruptcy, you may still be able to file a bankruptcy petition and take advantage of the automatic stay that goes along with it, but you won’t know for sure until you consult a qualified Los Angeles bankruptcy attorney.
Advantages of Chapter 7 Bankruptcy
There are many advantages to filing Chapter 7 bankruptcy in Los Angeles, the most significant being that, with Chapter 7 bankruptcy, you don’t make any payments to creditors, unlike Chapter 13 bankruptcy, which establishes a repayment plan for debtors to repay creditors during a term of three to five years. Chapter 7 bankruptcy can also put an immediate stop (automatic stay) to any collection efforts creditors may pursue against you for your debts, including wage garnishment, foreclosure actions and harassing creditor calls. After filing bankruptcy under Chapter 7, the bankruptcy will remain on your credit report for up to ten years, but even that isn’t the end of the world. You can still obtain some credit after filing bankruptcy and gradually rebuild your credit over time. When all is said and done, by declaring Chapter 7 bankruptcy, you can get a fresh start on your finances without having to pay back any or all of what you owe.
How Chapter 7 Bankruptcy Works
Filing Chapter 7 bankruptcy is a good way for debtors in Los Angeles to discharge any “unsecured debts,” which are debts not attached to any material collateral, such as medical bills, credit card debts and personal loans. When you declare Chapter 7 bankruptcy in Los Angeles, a trustee will be appointed to your case and this trustee will gather all of your assets and sell (or liquidate) any assets that aren’t exempt in order to pay off your creditors. Chapter 7 bankruptcy typically takes about four months from the time the case is filed in the bankruptcy court to the time that the debts are discharged. Once you are granted Chapter 7 bankruptcy relief in Los Angeles, you will no longer be responsible for repaying your unsecured debts and creditors will no longer be able to hold you personally liable for the debts you owed or take collection actions against you to receive payment for these debts.
What Debts are Non-Dischargeable?
The greatest advantage of Chapter 7 bankruptcy over other types of bankruptcy relief is that it can help individuals and businesses with overwhelming debt eliminate their dischargeable debts forever. However, there are certain types of debt that cannot be discharged in bankruptcy, even in a liquidation bankruptcy, including student loans, spousal support, child support, and most recent tax debts. If you file Chapter 7 bankruptcy in Los Angeles, you will still be responsible for repaying these types of debts after your other debts have been discharged. The court can also declare the following debts non-dischargeable if your discharge request is challenged by the creditor:
- Debts from embezzlement or larceny
- Debts incurred on the basis of fraud
- Certain loans or cash advances taken within 60 days of filing
- Certain credit purchases made within 60 days of filing
- Debts from willful or malicious injury to another person or property
- Debts owed under a divorce settlement (unless you still wouldn’t be able to afford them)
Protecting Your Assets in Bankruptcy
One trade-off of Chapter 7 bankruptcy is that the court sees your assets as a means of paying back your creditors, and the Chapter 7 trustee can sell these assets to repay the debts you owe. An “asset” is any property you own or may have a right to own at some point in the future. In Chapter 7 bankruptcy, some or all of your assets will be exempt, meaning you can keep them after you file bankruptcy. Such exempt assets in California bankruptcy cases typically include furniture, food and clothing necessary to and regularly used by the debtor or members of his or her family, as well as jewelry, art and heirlooms up to certain exemption limits. You can also choose to keep certain secured debts, such as your house and car, but you will be required to make any past-due payments and you will also have to continue making current payments. Any non-exempt assets, such as valuable artwork, expensive clothing, investments or property that is not your primary residence, will be liquidated, or sold, by the trustee appointed to your bankruptcy case, in order to pay your creditors the money they are owed. If you don’t have any non-exempt assets, there isn’t any property for the court to sell and your creditors won’t receive any payment from your bankruptcy case.
Reasons to Hire a Bankruptcy Attorney
Filing Chapter 7 bankruptcy in Los Angeles can be complicated and stressful, and many people considering bankruptcy as a debt relief option are unsure how to proceed and where to turn for help. At Resnik Hayes Moradi LLP, our knowledgeable bankruptcy attorneys are familiar with the various bankruptcy options available to individuals facing crippling financial problems, and with our help, you can find the debt relief solution that best suits your individual needs. Our Los Angeles bankruptcy lawyers have more than 50 years of collective legal experience and we have helped thousands of clients throughout the Los Angeles, San Fernando Valley, San Bernardino, Riverside and Orange County communities obtain relief through bankruptcy. We have a reputation for skilled and knowledgeable bankruptcy representation, and we can help you determine whether Chapter 7 bankruptcy is right for you.
For many people, the stigma of bankruptcy is what ultimately keeps them from taking advantage of what could be the best solution for addressing their looming financial problems, which should never be the case. When you hire our bankruptcy firm, we will help you seek relief from the burden of mounting debt in a discreet and considerate manner, so you can avoid the social stigma of bankruptcy. Once you retain our bankruptcy and debt relief services at Resnik Hayes Moradi LLP, we will also handle all creditor calls for you. In fact, you can refer all creditor calls directly to our firm, so you don’t have to deal with harassing collections efforts by creditors or have any contact with creditors at all. No matter how desperate your financial situation may seem, our attorneys can help. We will ensure that you understand your options under the law and personally walk you through each scenario, so you can feel confident that you are making the best decision for your financial future. Contact our Los Angeles bankruptcy firm today for a free initial consultation.
Contact Our Los Angeles Bankruptcy Lawyers for Help
Mounting debts, collection calls from creditors and imminent foreclosure can be significant burdens to bear, and many people facing crippling debt find themselves considering bankruptcy but aren’t sure if it’s right for them. If your wages are being garnished, if you are receiving harassing collections calls from creditors, or if you are having trouble paying back medical, credit card, or other bills, Chapter 7 bankruptcy could be your best option for finally getting yourself out of debt. If you meet the requirements for Chapter 7 bankruptcy, you may be able to discharge all or most of your debts and take the necessary steps to get your finances back on track and start fresh with little or no debt. It is our primary goal at Resnik Hayes Moradi LLP to help clients move towards a debt-free future, and we can help you achieve financial freedom, too. Contact our knowledgeable Los Angeles bankruptcy lawyers today to discuss the various debt relief options available to you based on your specific financial situation.
“The bankruptcy attorneys at Resnik Hayes Moradi LLP provided us the peace of mind I so desperately needed. I was not sure what to do and I felt like I was at the end of my rope. They were there the entire step of the way and gave me the necessary information I needed to make the right choice for my family.” – Dave B.