What Is A Chapter 7 Bankruptcy? What Requirements Need To Be Met To File A Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy is a way for a person to liquidate their estate when they have a lot of unsecured debt (e.g. credit card debt, medical bills, etc.). People who file for Chapter 7 bankruptcy generally have greater expenses than income, which means they do not make enough money to cover their expenses each month. In essence, Chapter 7 bankruptcy is a tool that can be used to discharge unsecured debt without losing exemptible assets.
In order to qualify for Chapter 7 bankruptcy, a person’s income must be less than or very close to their expense payments. Expense payments must be reasonable (e.g. spending $1,000 per month on food for one person might not be considered reasonable). In addition, having too many non-exempt assets may harm a person in Chapter 7 bankruptcy.
What Assets Will I Be Able To Keep After Completing A Chapter 7 Bankruptcy?
A home, vehicles, 401(k) retirement plans, tax refunds, real estate, rental properties, and other assets can be protected in a Chapter 7 bankruptcy as long as the value of the assets falls within the allowed exemption amounts. For example, for both Chapter 7 and Chapter 13 bankruptcy in California, there is a homestead exemption of $75,000 for people under age 65. A couple or an individual with a dependent in the home can qualify for a $100,000 equity exemption. As long as the home is within these parameters, it can be fully exempt. Most retirement plans are also exempt. For vehicles with equity, a certain dollar amount can be exempt. In some situations, even vacation homes will be exempt.
For more information on Chapter 7 Bankruptcy In California, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (818) 697-9699 today.
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