Chapter 7 – A “Fresh Start Bankruptcy”
- Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Debtors whose debts are primarily consumer debts are subject to a “means test” designed to determine whether the case should be permitted to proceed under Chapter 7. If your income is greater than the median income for the state of residence and family size, in some cases, creditors have the right to file a motion requesting that the court dismiss your case under § 707(b) of the Code. It is up to the court to decide whether the case should be dismissed.
- Chapter 7 exempts most assets. Over 90% of our clients keep everything. In Chapter 13, you keep all assets you choose, because most unsecured debts are ‘as if in full’. In both chapters, all assets must be listed at the time of filing.
- The purpose of filing a Chapter 7 case is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, the court may deny your discharge and, if it does, the purpose for which you filed the bankruptcy petition will be defeated. Proper advice is key to a successful discharge.
- Most general unsecured debts are discharged in Chapter 7. There are some exceptions. You may still be responsible for most taxes; student loans; debts incurred to pay nondischargeable taxes; domestic support and property settlement obligations; most fines, penalties, forfeitures, and criminal restitution obligations; certain debts which are not properly listed in your bankruptcy papers; and debts for death or personal injury caused by operating a motor vehicle while intoxicated. Also, if a creditor can prove that a debt arose from fraud, breach of fiduciary duty, theft, or from a willful and malicious injury, the bankruptcy court may determine that the debt is not discharged.
Winterbotham Parham Teeple, a PC provides pre-petition planning to assure the highest protection available. Over 90% of our clients keep everything and lose nothing. We achieve this by careful planning and taking special exemptions allowed by law.
Winterbotham Parham Teeple, a PC is one of the most Experienced Bankruptcy Law Firms in Southern California. We provide legal assistance to those seeking relief under the United States Bankruptcy Code, in Southern California. We have been proudly serving the community for over 30 years.