Chapter 7 Bankruptcy Attorney in Pasadena, California
Considering Chapter 7 to get debt relief? A Chapter 7 bankruptcy is a type of bankruptcy that allows you to keep some of your assets while eliminating most of your debt. If you decide to file for bankruptcy, it is important to hire an experienced Pasadena Chapter 7 bankruptcy attorney.
At Law Office of Daniela Romero, APLC, we understand the complex and demanding process of bankruptcy. We have years of experience helping clients get the financial relief they need, and we are committed to making the process as easy as possible for you! If you’re looking for an attorney to help you file for and manage a Chapter 7 bankruptcy, call us today!
Is Chapter 7 bankruptcy right for me?
When Congress changed the bankruptcy laws in 2005, many people who wanted to file for Chapter 7 bankruptcy needed to qualify by passing a test which we call the Means Test. The Means Test does not apply if most of your debts are:
- Acquired as business debts
- If you are a corporation
- Through a partnership
- Through other types of business entity
People who have filed another bankruptcy case in the recent past are not allowed to file again without special Bankruptcy Court permission. In conclusion, individuals cannot remove debts in a Chapter 7 case if they have previously eliminated their debts in an earlier Chapter 7 case within the last 8 years, or in an earlier Chapter 13 case within the last 6 years. A credible Pasadena bankruptcy attorney can help you understand how Chapter 7 bankruptcy works.
The Law Office of Daniela Romero, APLC has extensive experience in handling bankruptcy cases. Our bankruptcy law firm can guide you throughout the bankruptcy process as you aim for a debt-free life. Call us today at 626-296-6971 and schedule a consultation.
There are good reasons not to file a Chapter 7 bankruptcy, even if you are eligible to do so.
- Not all debts are wiped out in Chapter 7
- You may lose property or a business that you want to keep.
There are two basic rules for a personal Chapter 7 Bankruptcy.
Rule 1: bankruptcy eliminates any legal obligation to pay all debts that existed when the bankruptcy case was filed.
Rule 2: property will be taken and sold to pay the creditors. For most people, Rule 1 is generally true and Rule 2 is generally false.
Rule No. 1: Elimination of the Debt
Most debts are removed in a Chapter 7 bankruptcy. There are three major exceptions to this rule. First, some types of debt cannot be affected by bankruptcy, these debts are described as “non-dischargeable”. Second, you may want to keep some debts (ie. family members or car loans.) Third are debts that are secured by your home, your car, or other property. These debts need to remain if you want to keep the property.
Non-dischargeable debts are those which have not been “discharged” or eliminated. Your legal responsibility to pay off the debt and the creditor’s right to force you to pay both remain even after the bankruptcy case is over. If you want to keep or reaffirm certain debts, your request must be reviewed and approved by the Bankruptcy Court. Here is a partial list of those which are most common:
- Most, but not all taxes
- Child, spousal, and family support debts
- Non-support debts which are related to a divorce or separation
- Most, but not all student loans
- Damages caused by driving under the influence
- Debts related to false statements (such as loan applications) or fraud
- Damages caused by intentional injuries
- Stolen money held in trust
In most cases, an automatic stay (section 362 of the U.S. Bankruptcy Code) takes effect immediately after you file for bankruptcy and stays in effect until the judge closes the case. You do not have to prove lender negligence or misconduct to stop utility shutoff, foreclosure, wage garnishment, repossession, creditor lawsuits, and eviction.
At the end of the case, the judge discharges the most unsecured debts. Certain obligations, such as back taxes and alimony, are only dischargeable in some situations. Although the bankruptcy discharge has relieved you from paying your debts, you cannot get rid of a creditor’s lien on your property. A creditor can use a lien to repossess, sell, and liquidate your collateral in exchange for money to recover some of your unpaid debts (even after the court has discharged your debt). Some liens can be removed even after the bankruptcy case closure.
Rule No. 2: Loss of Property
Many people believe they lose most of their property when they file bankruptcy. Declaring bankruptcy does not mean that you will lose everything that you own; however, not all your assets can be fully protected from liquidation. People who file bankruptcy generally get to keep three kinds of property:
- Exempt property – usually determined by State law
- Fully mortgaged or over-mortgaged property; and
- Property that has no value or cannot be sold
Even though you may get to keep certain property in Chapter 7 bankruptcy, this property cannot be liquidated and sold during the Chapter 7 case without special permission. Our experienced Pasadena bankruptcy attorney can help you get this permission.
At The Law Office of Daniela Romero, APLC, we have been providing legal services to people who have or are going through bankruptcy for decades. Our bankruptcy law firm will help you access the services that you need and do anything we can to ease your burden so that you can focus on getting your financial freedom back.
Call us today at 626-296-6971 and schedule a consultation.
The Means Test
One of the most significant qualifications of bankruptcy filing is passing the means test. You can file under this section of the Bankruptcy Code if your family’s income is below the median income of the state. This amount may fluctuate over time. A reliable Pasadena bankruptcy lawyer can help you determine whether you are qualified to pass the means test.
The means test helps determine the amount of your disposable income by deducting certain monthly expenses from your current monthly income (average income for the past six months before filing for bankruptcy). If your disposable income turns out to be higher than the median income of your state, then you won’t qualify to file for Chapter 7 bankruptcy. In this case, you’ll have to use Chapter 13 if you want to file for bankruptcy.
The Chapter 7 means test is a formula applied to determine whether or not you should have enough money available to make some minimal payment to creditors in a Chapter 13 Bankruptcy plan. It’s called the bankruptcy means test because it is a test that verifies if someone has the “means” to repay their debts.
The “means test” is designed to keep high-income filers from filing bankruptcy Chapter 7. The main goal is to reserve Chapter 7 bankruptcy for those who have no means to pay and to push those who have available income into Chapter 13 bankruptcy plans so that their creditors will receive at least partial payment.
Finally, you can still pass the Means Test if you have exceptional circumstances that a Judge decides as appropriate. Debtors who cannot pass the Means Test may still be eligible to file Chapter 11 or Chapter 13.
Here Are Some Reasons Not to File Chapter 7 Bankruptcy
Filing a Chapter 7 bankruptcy may not be the best for everyone. Even if it feels like the best debt relief option for you, it may not be a viable option once you consider some of the disadvantages of filing Chapter 7 bankruptcy.
You want to keep property with equity which is not exempt.
In some cases, the Chapter 7 United States trustee will allow you to buy this property back. There are state-specific rules on bankruptcy exemptions that you need to follow. If you choose to file Chapter 7, your designated bankruptcy trustee oversees the process of selling your non-exempt property. If you own an expensive property you don’t want to lose, it’s best to seek legal help from a qualified bankruptcy lawyer in Pasadena to help you know which type of bankruptcy chapter is the best debt relief option for you.
You are behind in making loan payments on a property you want to keep.
If you cannot earn or borrow enough money fast enough to pay back the cash value of the property to your creditors, then Chapter 13 is much better for dealing with these situations. However, in some cases involving car loans that are more than 910 days old and where the amount of the loan is more than the value of the car, you may be able to make special arrangements to keep the car and pay only the car’s fair market value.
You have significant debts which are not dischargeable.
Chapter 11 or 13 are better able to handle these situations. When you file for Chapter 7 bankruptcy, the objective is to get as many debts as possible “discharged. Some unsecured debts, like alimony or child support, can never be discharged in bankruptcy. Furthermore, tax debt and student loan debt can be quite hard to wipe out by filing bankruptcy.
You previously received a bankruptcy discharge.
If you have recently filed bankruptcy, then you’re not eligible to receive another Chapter 7 discharge. You can’t get another Chapter 7 bankruptcy discharge if you obtained a discharge of your debts in a Chapter 7 bankruptcy case within the last eight years, or a Chapter 13 case within the previous six years.
Hire a Bankruptcy Attorney Today!
Every person who has filed for bankruptcy has a story to tell. But no one’s story is the same. They have a different reason for filing bankruptcy, a different financial situation, and a different life. But one thing is sure: it’s been an extremely difficult experience. There were lots of stages to go through, the process was long, and the emotions were overwhelming.
Dealing with debt and being bankrupt should not stop you from trying again. Bankruptcy will give you ways to restructure your finances and help you stay out of debt. If you’re going through this hardship, our experienced Pasadena bankruptcy attorneys at The Law Office of Daniela Romero, APLC can help. Contact our bankruptcy law firm so we can guide you on how to file a bankruptcy systematically. We will help you become successful as you recover from your financial losses and aim for a fresh start.