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  • Writer's pictureDaniel Rodriguez

Is Chapter 7 Bankruptcy the Right Choice for Me?

How Can I Keep Certain Property While Eliminating Debt Using Chapter 7 Bankruptcy in California? The 2005 revisions to the Bankruptcy Code were designed to reduce the amount of fraud being conducted through the bankruptcy process, the simple fact is that most individuals can still qualify for its benefits. Upon the successful completion of your bankruptcy filing, you will receive a discharge eliminating most debts including credit card debt, medical debts, and most forms of unsecured debt. Chapter 7 bankruptcy will also put a halt to harassing calls from creditors and bill collectors. However, bankruptcy cannot typically eliminate student loan debt (but the elimination of other debt may free-up funds to pay down student loans). Aside from the debt elimination abilities provided by Chapter 7, it can also create a level of protection for your property. California state law allows a bankruptcy filer to select from one of two systems of bankruptcy exemptions. Exemptions are the property you get to keep. Bankruptcy exemption System 1 is typically more appropriate for individuals with debts who have significant amounts of home equity. Individuals who may lack home equity but nevertheless have valuable property are often better served by System 2 because it offers a generous “wildcard” exemption. Most recognized retirement accounts also receive protection, meaning that bankruptcy will not mean you have to start saving so early on for retirement.

Common Situations Where a Chapter 7 Filing Offers a Pathway Out of Debt Chapter 7 is a form of bankruptcy that can apply to many scenarios and situations. Quite frankly, there is no single right or correct scenario for individuals who wish to use this bankruptcy chapter. Provided that the person can qualify under the bankruptcy code, and they are not adverse to any of the potential consequences of the filing, Chapter 7 can be a good fit. Situations where a Chapter 7 filing may be appropriate include:

  1. You have unmanageable credit card debt, and consolidation or negotiation with the credit card company has failed.

  2. You are facing foreclosure and fear that you may lose your home.

  3. You think that your car or truck may be repossessed and you wish to stop repossession attempts.

  4. You have medical debts, hospital bills, and other expenses that you simply cannot pay.

  5. Your monthly debt payments exceed your income These are merely a few of the situations where Chapter 7 may be appropriate. Even if a taxpayer cannot qualify for Chapter 7, they may still find relief under other chapters of the bankruptcy code. In any case, a bankruptcy filing will provide immediate relief in the sense that creditors and bill collectors must stop their harassing, embarrassing, and anxiety-inducing calls. If you think bankruptcy under Chapter 7 may be right for you, contact an experienced attorney today.

Contact a Sacramento Bankruptcy Attorney Today If you are considering ways to eliminate your debt and move forward with your life, Chapter 7 may provide an answer. To discuss whether you can qualify and if bankruptcy is right for you, call a Sacramento bankruptcy attorney from The Bankruptcy Group at or contact us online.

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