Chapter 7 Liquidation

A Chapter 7 bankruptcy filing will result in the discharge of most types of debt including credit card balances, medical bills and finance company loans. Certain debts such as student loans, recent cash advances, domestic support obligations, and monies procured by fraud will not be discharged. There are some companies out there offering "easy payment" plans to pay off student loans and credit cards, however the risk of using them is even greater then filing for bankruptcy.

An individual with primarily consumer debts is eligible to receive a Chapter 7 discharge if his or her average monthly income for the past six months is less than the California Median or if his or her income is above the California Median and his or her qualified deductions place his or her income beneath the disposable income threshold. Additionally, an individual may not receive a Chapter 7 discharge if he or she has received a previous discharge under Chapter 7 in the previous eight years.

Once a debtor files a Chapter 7 petition, all collection activity must cease and any creditor attempting to collect a debt can be sanctioned by the court. Approximately 30 days after the petition is filed, a meeting of creditors (“341(a) meeting) is held with the trustee. This meeting is used by the trustee to ask the debtor questions about the debtor’s financial affairs and accuracy of the petition. Creditors have the right to be present and ask questions, however it is extremely rare for a creditor to appear. The meeting usually lasts less than five minutes. After the conclusion of the meeting, if there are no objections, the debtor will receive his or her discharge about two months after the 341(a) meeting.

The court costs to file a Chapter 7 case are $299 which must be paid by you when the case is filed. The attorneys fees we will charge for a Chapter 7 petition vary on the complexity of the case, however our fees are very competitive and we offer installment plans which make payment easy and affordable.