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Chapter 7 Basics for Oakland, California
Chapter 7, otherwise known as "liquidation" or "straight bankruptcy" is generally the simplest and quickest. It's available to individuals, married couples, corporations and partnerships. A trustee appointed by the court gathers and sells your nonexempt property. The proceeds from the sale pay your creditors. You're able to keep any "exempt" property.
Exempt Property in California
Exempt property could consist of the following:
- Real estate such as a residence
- Trade or professional tools, books
- Unmatured life insurance contract
- Prescription health aids
- Social security, veteran's benefits, disability, illness or unemployment benefits
- Proceeds from a judgment
Beginning October 17, 2005, under the new Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), you now have more time to decide whether to use the state or federal exempt property lists. This was to prevent someone from moving to a different state with more generous exemptions.
Most chapter 7 cases are "no-asset" cases, which means that you don't have nonexempt property for the trustee to sell. When you file your petition for bankruptcy, you declare whether your case is "asset" or "no-asset." The burden is on the trustee to change the designation.
Eligibility for Chapter 7 in Oakland, California
If you file, under BAPCPA, you must undergo a "means test" to qualify for Chapter 7 bankruptcy in Oakland, California. This Your income and expenses are examined to see how they compare to the standard for your area as set by the IRS.
For example, if you earn less than the median income for a family of your size in your state, you can file for Chapter 7. However, if your income from the last six months is greater than the median income, and you can pay at least $6,000 over five years or $100 a month, toward your debt you can't file for Chapter 7. You must file for Chapter 13 instead.
The means testing requires you pay any overdue tax returns within weeks of filing bankruptcy.
Now, you must also pay for credit counseling and budget analysis at your own expense. This will address the means testing calculations for you. These calculators can also be found on the Internet.
Filing Chapter 7 in Oakland, California
Bankruptcy starts with filing an official petition, schedules and Statement of Financial Affairs in court. You must provide:
- A full list of creditors
- The amount and type of their claim, the source, amount and frequency of your income
- A list of all your property
- A detailed list of monthly living expenses
As soon as you file for bankruptcy, creditors are prevented from trying to collect on your debts through an "automatic stay." The stay preserves your property and gives you a break from being sued.
Creditors must show the judge there is cause to continue with collection action. For instance, by showing the property might deteriorate in value during the bankruptcy period.
If there is nonexempt property, the trustee will control of it. That person will sell the property and pay administration fees and then pay any remaining money to creditors with active and approved claims. These will be paid in a level of priority. Any wages earned after filing, you keep and are beyond the reach of creditors prior to the filing date.
Questions For Your Attorney in Oakland, California
- My Domestic Partner and I want to file for a Chapter 7. How do we do it?
- Does any of my property qualify as exempt under Chapter 7?
- How do I prepare for a "341" meeting?
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