A Chapter 7 bankruptcy filing allows you to eliminate unsecured debts such as credit cards, medical bills, personal loans, and generally tax debt older than 3 years.  Filing Chapter 7 bankruptcy gives you a fresh start financially. When a Chapter 7 bankruptcy is discharged, your credit rating improves as the negative debts are removed and you have an opportunity to rebuild your credit scores.

Advantages of Chapter 7 Bankruptcy

• California has statutory exemptions to protect your assets, such as household furnishings and goods, clothing, jewelry, electronics, kitchen appliances, money in your bank accounts, tools of your trade, vehicles, and even homes.
• Any lawsuit, garnishment, of levy is automatically stopped by filing a Chapter 7 bankruptcy.
• Creditors are no longer able to collect the debt from you and can no longer report delinquencies to the credit bureaus.

Eligibility to File Chapter 7 Bankruptcy

• A Chapter 7 bankruptcy is appropriate when you have insufficient income to pay all or most of your debts.  The IRS sets a standard for median family income based on States and Family Size and an attorney can help you calculate based on your income, family size, and debts whether you are eligible to file Chapter 7 bankruptcy.
• Your assets, especially home equity, vehicle equity, funds in your bank accounts, and all other assets should fall within the exemptions allowed.  If you have assets above and beyond the exemptions allowed in California, you may need to consider Chapter 13 bankruptcy.