Chapter 7 Bankruptcy

Do You Need to File Bankruptcy?

You are NOT Alone!
California Bankruptcy Exemption...You Can Keep At Least $27,000

Everyone is struggling today with this economy.  Financial concerns are stressful and emotionally challenging.   My name is Michael Noble and I am your Sacramento Bankruptcy Attorney.  You've taken the hardest step of the process...reaching out for help.

Chapter 7 bankruptcy is a liquidation that generally discharges or forgives your debt in as little as 90 days.

The top 3 most worry-some questions people have before they call me: Will I lose everything I have? What type of bankruptcy should I file? Can I afford bankruptcy? I can help you answer these questions and more if you call (916) 473-7855

California also gives you an exemption that lets you keep at least $27,000 of equity in your car or other assets.  If your car is only worth $20,000 with a $10,000 secured loan, then the $10,000 of equity is fully protected.  You could also keep other assets such as cash or another car up to $17,000.

If you have equity in a home, instead of protecting the above assets, you could protect at least $75,000 of the home equity.  The $75,000 amount applies if you have no dependents and are under age 55.  If you have a dependent or are married, you can protect $100,000 of equity.  If you are over age 65, you can keep at least $125,000 of equity in your home.

Since most Chapter 7 Bankruptcy cases have no assets to liquidate, the trustee does not usually sell anything.   The trustee conducts a meeting to verify there are no assets.  Usually the meeting is conducted about 30 days after you file for bankruptcy protection.  60 days after the meeting, you are eligible for a discharge of your debts in most cases.

You also must qualify for chapter 7 unless most of your debt is business debt.  A debtor qualifies for chapter 7 if the GROSS annual income in California is less than approximately $48,000 for one person, $65,000 for two, $70,000 for three, and $80,000 for four, then you automatically pass the means test and qualify for Chapter 7. 

The GROSS income is the average of your earnings for the 6 months prior to when you file your bankruptcy.   Social Security is excluded from your income for qualification purposes.  If your GROSS income is more than the median income (amounts shown above), then there is a complicated formula that is used to determine if your expenses exceed your income. 

The qualification process can be very complex, involving various predetermined expenses.   I will make sure your expenses exceed your income if at all possible for an initial $300 payment. This can be one of the most complex components of the Chapter 7 process and usually requires professional help.  If you qualify, the $300 initial payment applies to the total costs.

Bankruptcy provides you with a fresh start.   Part of your fresh start may be to get as much time as possible to save your house.  Bankruptcy can also restore your credit, and often does so much faster than any other option. Even paying all of your debts late may result in a lower credit score than filing bankruptcy. 

Of course we all want to pay our debts.  When life deals you an unexpected blow and you struggle to pay your debts, bankruptcy may be the solution to your problem.