Do I qualify for liquidation bankruptcy?
In the United States, there are different ways that individuals can file for bankruptcy. Most people seeking bankruptcy protection will file under Chapter 7 or Chapter 13 of the United States Bankruptcy Code. Filing under Chapter 7 can give you the opportunity to eliminate your outstanding debt, as it is the liquidation form of bankruptcy that essentially wipes out all of your debt.
This method is beneficial to those who do not have any income source, or only have a little of money left to pay back the debts. In order to qualify for Chapter 7, you will need to take the means test, which will determine if you have any disposable income to pay back to your creditors. If you do not have enough disposable income, you will be allowed to file for bankruptcy under Chapter 7.
Asset Protection in Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, non-exempt assets are sold, or liquidated, to pay your creditors–the ones that are exempt will be determined by state laws. Your non-exempt assets are sold by your assigned bankruptcy trustee, and the proceeds are used to pay off your creditors. Any remaining debts are discharged, which means you will no longer have a legal responsibility to pay them.
In many cases, not all of your assets have to be liquidated, allowing you to protect some. There are various assets in a Chapter 7 bankruptcy that will be considered exempt based on what type of property it is, and its value.
Some of assets that are eligible to be exempt include:
- Social Security Benefits
- Unemployment Benefits
- Veteran's Benefits
- Disability Benefits
At 1st California Law, we are able to assist you with cataloging your property and determining which assets you will be allowed to keep. When you work with our firm, we help you through each stage of the process at reasonable rates.
For further information on discharging your debts, contact our firm!
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"Kevin Kunde is an attorney licensed by the State Bar of California. Mr. Kunde graduated from Chapman University School of Law where he was a Senior Editor for the Nexus Law Journal, a Dean's Fellow/teaching assistant for Contracts course and served as a Judicial Extern for the Honorable John Rayburn for the U.S. District Court for the Central District of California"Read Full Bio