Chapter 7 and Chapter 13 Bankruptcy
Consumer Debt Relief Protection
If concerned about mounting credit card and other consumer debts, understand that many people still qualify for Chapter 7 bankruptcy under the new bankruptcy law. Depending upon your economic status, you may obtain consumer bankruptcy protection under either Chapter 13 or Chapter 7. The biggest change to Chapter 7 was imposing a "means test" to determine eligibility to file for Chapter 7 liquidation. Essentially, if a debtor's income, after subtracting for certain allowed expenses under a somewhat complicated formula, is below the published median income for California, then Chapter 7 is available. There is also mandatory credit counseling, from an approved provider, that a debtor must complete prior to filing for bankruptcy.
The San Diego, California, Law Office of Richard Stevenson, represents consumers living in and around the cities of Chula Vista, Escondido, Oceanside, El Cajon, Carlsbad, La Mesa, National City, Encinitas, Poway, Lemon Grove, Spring Valley, and Coronado, seeking to stop creditor harassment and get out of debt.
Types of Consumer Bankruptcy Protection
Chapter 7 Bankruptcy: A Chapter 7 is also known as a liquidation bankruptcy. In a Chapter 7, all of the debtor's non-exempt assets are liquidated (i.e. sold) to pay creditors. By law in California, certain dollar amounts of value in various assets (both personal property and real estate) are protected, or "exempt" from creditor's reach. Thus, in most Chapter 7's, a debtor has very little, if any, non-exempt assets are available to sell for the benefit of creditors. The goal and end result of a Chapter 7 is for the debtor to receive a discharge of most of the debtor's unsecured debts that existed at the time the debtor filed his or her Chapter 7 petition. The filing fees of a Chapter 7 is $299 (as of April 9, 2006).
Chapter 13 Bankruptcy: A Chapter 13 is also known as a "wage earner's plan" bankruptcy. The Chapter 13 is designed primarily for debtors who have a regular income and need help reorganizing debts. This chapter is also very helpful for debtors who have significant non-exempt assets. In a Chapter 13 bankruptcy, the debtor's assets are not liquidated to pay creditors. Rather, a Chapter 13 debtor proposes a three (3) to five (5) year plan to pay creditors. If a debtor has a mortgage payment or a car payment he or she is behind on, Chapter 13 allows the debtor to come current on the debt without losing the property. At the end of the three to five years, if the debtor has maintained the monthly payments, most remaining unsecured debt is discharged. The filing fees of a Chapter 13 is $274 (as of April 9, 2006).
To find out more about Chapter 7 and Chapter 13 bankruptcy, call the Law Office of Richard Stevenson, at (866) 587-7260 (Toll Free). Questions can be submitted to a lawyer by filling out the contact us form provided.
The San Diego, California, Law Office of Richard Stevenson represents people residing in the San Diego County cities of Chula Vista, Escondido, Oceanside, El Cajon, Carlsbad, La Mesa, National City, Encinitas, Poway, Lemon Grove, Spring Valley, and Coronado.
