Chapter 7 Bankruptcy Attorney in Sacramento, California
Extreme debt burdens coupled with high-interest rates can lead to a sense of powerlessness and hopelessness. Perhaps a serious illness resulted in significant hospital bills and long-term health issues that restrict your ability to work. In other cases, a divorce may result in significant financial difficulties unless major lifestyle changes are implemented quickly. Likewise, the loss of a job – especially in a household with a sole provider – can quickly put finances under immense strain and cause people to use their credit cards excessively in an attempt to stay afloat.
If you find yourself struggling to get out from under seemingly crushing debt, or find that no matter how hard you work you just keep falling further behind, filing for Chapter 7 bankruptcy in Sacramento, California may be appropriate. The experienced and dedicated Sacramento Chapter 7 lawyers of The Bankruptcy Group understand the stress and turmoil debt can cause. Therefore, we meet all bankruptcy matters with a compassionate, efficient, and strategic approach. To schedule a free and confidential consultation with an experienced bankruptcy attorney in Sacramento, call The Bankruptcy Group at (800) 920-5351 today.
What is Federal Bankruptcy Code Chapter 7?
There are many different types of consumer bankruptcy and business bankruptcy available to eligible debtors in California and throughout the United States. Each type is known as a “chapter” of bankruptcy, based on the chapter of the U.S. Bankruptcy Code for which it is named. These chapters establish federal regulations for bankruptcy procedures in California and beyond. Some of the more common types of bankruptcy under the federal bankruptcy code include:
- Chapter 7 Bankruptcy
- Chapter 11 Bankruptcy
- Chapter 13 Bankruptcy
What is Chapter 7 Bankruptcy in California?
Chapter 7 is the most common form of personal bankruptcy. It is designed for people who are having financial difficulties and are not able to repay their debts.
Based on the changes to the Bankruptcy Code that took effect October 17, 2005 – collectively known as the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA – most people can now qualify for a Chapter 7 bankruptcy, which is sometimes referred to as “straight” bankruptcy or “liquidation.” However, despite the term liquidation, filing Chapter 7 bankruptcy does not mean that you will lose everything.
So how does Chapter 7 work in California? What general Chapter 7 process can filers expect?
What is California’s Chapter 7 Bankruptcy Law?
In a Chapter 7 bankruptcy, you can usually exempt, or keep, most or all of your assets. While some states permit Chapter 7 filers to select between federal or state exemptions, California does not. Under state law, California residents must use the California bankruptcy exemptions.
However, filers still have an option: the option of selecting between System 1 and System 2 of the bankruptcy exemptions in California. Typically, System 1 is more appropriate for individuals with significant home equity. System 2 and its generous wildcard exemption means that individuals with valuable property or significant liquid assets generally prefer System 2.
Most retirement accounts and pensions are also exempt in whole or in part. Secured property, normally your car and your house, may not have any net equity, in which case you can keep them as well. Once your Chapter 7 case is over, typically 10 to 12 weeks, you receive a discharge. The discharge prevents your creditors from taking any steps to try to collect their unsecured debt.
Bankruptcy Under Chapter 7 in Sacramento, CA
Despite its relative simplicity compared to other forms of bankruptcy, Chapter 7 in California can still be a complex legal process, especially if you have never filed before and are completely new to California Chapter 7 bankruptcy law. It is vital that you have assistance and guidance from a skilled and knowledgeable attorney if you are thinking about declaring Chapter 7 bankruptcy in Sacramento, because even a single misstep could set you back in the process, or, if the error is serious, potentially place you in jeopardy of having your case dismissed.
How Do You Get Bankruptcy Set Aside?
A judgment is a court order establishing that a creditor has won a lawsuit against the debtor, which means the creditor is entitled to receive payment. Therefore, judgments can be a major source of financial strain for debtors in California. However, if you failed to respond to the lawsuit, resulting in a default judgment, it may be possible to get rid of the judgment by having it set aside, which is another way of saying a judgment has been vacated.
If you wish to have a judgment set aside in Sacramento, it is necessary to file a legal document known as a “motion” requesting that the judgment be set aside or vacated. It is in your best interests to have an experienced Chapter 7 attorney help you with this process, because the content and even timing of the motion can have a major impact upon its efficacy. However, even if the judgment cannot be set aside, it may still be possible to discharge the judgment through bankruptcy.
Ultimately, the Chapter 7 case itself will be either discharged, if successful, or dismissed, if unsuccessful. Dismissals can result from factors such as fraud, noncompliance with bankruptcy regulations, failure to pay court fees, and other procedural issues. Once a Chapter 7 bankruptcy case has been discharged, it will remain on your credit report for 10 years from the date of filing. Chapter 7 cases generally take several months from the date of filing to the date of discharge.
How to File or Declare Bankruptcy in California
Contrary to what the term implies, declaring bankruptcy, or filing for bankruptcy, is merely the first step of a process that takes several months to resolve completely. Though less procedurally elaborate than Chapter 13 or Chapter 11 cases, Chapter 7 cases still involve several stages and numerous pieces of legal and financial documentation, which is one of the many reasons it is vital to be represented by a skilled Chapter 7 lawyer in Sacramento at all phases of the process.
How to Claim Bankruptcy
Before you decide to declare Chapter 7 bankruptcy in Sacramento, you should review your legal options with a knowledgeable liquidation bankruptcy attorney. Depending on your objectives and financial resources, it may make more sense to delay filing, file under a different chapter, or explore an entirely different method of getting your debts under control.
If our Sacramento bankruptcy lawyers determine that Chapter 7 is the right option for you, here is how the California Chapter 7 process will generally unfold:
- First, it’s important to compile all of your financial paperwork, such as deeds, titles, and tax returns.
- Before you will be permitted to file for Chapter 7 in California, you will need to go through three preliminary steps:
- Pre-bankruptcy credit counseling, which must be administered by an agency which has been approved by the Department of Justice. The DOJ supplies a state-by-state listing of approved agencies on its website.
- Means testing to determine if Chapter 7 is the appropriate chapter for you to file under. If you have too much disposable income, you may be required to file under Chapter 13.
- Choosing which exemptions you wish to use. The Bankruptcy Group will assess your resources to determine which set of exemptions is most advantageous for you.
- The next step is filing for bankruptcy in the appropriate court. Our attorneys will help you understand the legal paperwork and court fees necessary to complete this step.
- Once your papers have been filed, collection actions such as wage garnishment will be temporarily halted by a court order called the “automatic stay.” With some exceptions, creditors cannot call you, write you, sue you, or take any steps that could be considered an attempt to collect the debt.
- Your case will be assigned to a court-appointed trustee, who has two jobs: making sure all of your documentation is in order, and assessing the value of your assets for sale to creditors.
- Before your case can be discharged, you must complete an approved debtor education course in California. Like pre-bankruptcy credit counseling, the pre-discharge debtor education course must be obtained through a DOJ-approved agency.
- If there are no problems or issues with your case, and you consistently meet all requirements of the court, your case should be discharged after several months. You will no longer be personally liable for dischargeable debts, such as:
- Credit Card Debt
- Medical Debt
- Personal Loan Debt
This represents a simplified version of the Sacramento Chapter 7 process but should give you a clearer idea of the general steps you should expect to go through. Of course, you won’t be on your own: our knowledgeable attorneys will be by your side to guide and advise you at every step of the way.
How Much Does it Cost to Declare Bankruptcy in California?
Filing for bankruptcy is not free. However, the costs associated with bankruptcy are very small compared to the financial benefits of a Chapter 7 discharge.
How to File Chapter 7 with No Money
It is not possible to file Chapter 7 for free as the bankruptcy courts require certain fees for filing the bankruptcy petition and other processes. There are also attorney fees, as well as fees for the debtor education and credit counseling requirements.
However, the United States Bankruptcy Court for the Eastern District of California offers a Chapter 7 filing fee waiver for eligible filers. To obtain the waiver, the filer must complete and submit Official Form B3B (Application to Have the Chapter 7 Filing Fee Waived) with assistance from a Chapter 7 attorney in Sacramento. The application is three pages long and asks the filer to complete 20 questions.
Financial Assistance for Attorney Fees
At The Bankruptcy Group, we understand that financial expenses are a major concern for clients who are thinking about filing for Chapter 7 in California. We offer affordable, transparent pricing packages, so that you are never surprised by attorney fees. We can work with you to help make payment manageable.
Do it Yourself Bankruptcy with a California Attorney
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made California’s bankruptcy laws vastly more complex than they were prior to BAPCPA. It is not in your best financial interests to file for bankruptcy without an attorney. We urge debtors to seriously consider the following warning from the United States Courts:
“Filing personal bankruptcy under Chapter 7… takes careful preparation and understanding of legal issues. Misunderstandings of the law or making mistakes in the process can affect your rights. Court employees and bankruptcy judges are prohibited by law from offering legal advice.”
The Courts further add that “seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes.”
Personal Bankruptcy Attorneys
Chapter 7 and its ability to discharge debt while its automatic stay halts creditor collection attempts can provide significant relief to filers. Chapter 7 filing and subsequent discharge is made to address long-term financial problems, such as:
- Your monthly expenses exceed your net income.
- You are facing foreclosure.
- You want to protect your car from repossession.
- You are burdened with unmanageable credit card debt.
- You have medical and other personal debts you cannot pay.
- You have outstanding legal bills, liens or judgments.
However, individuals considering bankruptcy should not take any action until they have fully considered their options, including each system of exemptions under Chapter 7, and Chapter 13 reorganization.
Should You Use a Bankruptcy Lawyer Near You?
If you have fallen behind on your bills, are facing foreclosure, or can’t seem to dig out of the pit of debt you find yourself in, do not give up on the hope of a fresh start: friendly and effective legal help is not far away. To start exploring your legal options for eliminating debt and opening up new financial beginnings, contact the experienced Sacramento bankruptcy attorneys of The Bankruptcy Group at (800) 920-5351 for a free and confidential Chapter 7 consultation.