Bankruptcy

Chapter 7 & 13 Bankruptcy Attorney in Crescent City, California

Bankruptcy Law is a consumer protection law, which is a federal process that allows you to have your qualifying debts forgiven. The law recognizes that bad things can happen to good people, and sometimes you simply do not have the ability to fulfil your creditor’s repayment demands. Bankruptcy law does not seek to deter or regulate certain behavior, as other laws do. It simply recognizes that there are sometimes circumstances that are beyond your control, which can only be addressed through the cancellation of debts.

Gavel and Bankruptcy Form — Crescent City, CA — Law Office of Gino deSolenni

What is a Chapter 7 Bankruptcy?

A Chapter 7 Bankruptcy is a proceeding under federal law that provides the debtor a process to seek financial relief from creditors. In such a case, the debtor must turn his or her nonexempt property, if any exists, over to a trustee, who then converts the property to cash and pays the debtor’s creditors. Most chapter 7 cases are “no asset” cases which means that all of the property owned by the debtor is exempt under the exemptions available to the debtor. The debtor receives a discharge shortly after the case is filed.

Filing for a Chapter 7 Bankruptcy often allows individuals to eliminate their debt without sacrificing any of their assets. The debts that can be eliminated often include repossessions, personal loans, medical bills, and credit card bills. Wage garnishments can end, judgment liens can be removed, and bank levies can be recovered! By retaining the Law Office of Gino deSolenni, to file a Chapter 7 Bankruptcy, you are putting yourself in a position to stop creditors from sending any further correspondence. This means no more harassing phone calls, no more worries about having your wages garnished, and no other negative consequences of overwhelming debt.

Who can file a Chapter 7 case?

To be eligible to file a Chapter 7 Bankruptcy, you must pass the “means test.” If you cannot pass the “means test” this generally means that you will have to file a Chapter 13 Bankruptcy. The “means test” consists of two steps. The first step compares the debtor’s current monthly income, which is the average income for the six months prior to the anticipated filing of the Chapter 7 and compares it to the median income for similarly sized households in their state. A person qualifies for a Chapter 7 if their current monthly income is equal to or below the median income for households of similar size in their state.

If your current monthly income is over the median income, you must complete the second part of the “means test” in order to qualify for a Chapter 7. This is where the experience of the Law Office of Gino deSolenni, can be put to use to determine whether you will be eligible to file a Chapter 7 Bankruptcy
This is what a Chapter 7 Bankruptcy can provide for you:
- Provide a new financial start. A “fresh start.”
- Permanently eliminate the debts you can’t pay.
- Put you on a track to improving your credit score.
- Allow you to keep assets including your home and car.
A Chapter 7 Bankruptcy Does Not Discharge All Debts:
While most debts are dischargeable in bankruptcy, there are several exceptions which include:
- Debts incurred by means of fiduciary misconduct, malicious and willful injury, or embezzlement.
- Most federal and state income taxes. However, if the taxes are more than three years old, and other criteria are met, some taxes can be discharged in bankruptcy. Some taxes that cannot be discharged in Chapter 7 can be dealt with in a Chapter 13 bankruptcy.
- Student loans unless a court finds that not discharging the debt would impose an under hardship
- Debts for some fines or penalties.
- Debts for intentional injury to the person or property of another.
- Debts for personal injury or death caused by the debtor’s operation of a motor vehicle while intoxicated.
- Debts that were listed in a previous bankruptcy case in which the debtor did not receive a discharge.

What is a Chapter 13 Bankruptcy?

In Chapter 13 bankruptcy, you keep your property, but pay back all or a portion of your debts over a three to five-year period. This is unlike chapter 7 bankruptcy where most of your debts are cancelled but you may have to surrender some property to the bankruptcy trustee to pay your creditors, because you end up paying most of your debts over time in chapter 13 bankruptcy, it is also called reorganization. In a Chapter 13, you are no longer responsible for paying off the sort of ridiculous penalties and interest charges that you would otherwise have to pay during the same time span if you were not in a chapter 13 payment plan.

Common Reasons for a client to file Chapter 13 are:
1. To protect assets that might be lost in a Chapter 7 case because you have to much equity.
2. To pay non-dischargeable debts (most often taxes and child support) through a Chapter 13 plan as opposed to what the creditor might demand.
3. To prevent foreclosure on a home, or a repossession of a car or other secured property.
4. To obtain a discharge of certain debts that are not dischargeable in Chapter 7
5. To consolidate debts and pay as much as possible over the term of the Chapter 13 Plan without interference from creditors.
6. To “rewrite” auto loans in certain circumstances
7. To obtain debt relief when a Chapter 7 case was filed within the past 8 years.
8. If your income is in excess of certain limits.