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Chapter 7 Bankruptcy

Everyone has a breaking point. When it comes to paying your bills, managing your credit, and distributing what little income you have. As a Merced, CA Bankruptcy Attorney I know that sometimes the best intentions and efforts are not enough and occasionally, people bite off more than they can chew and then reach the conclusion that they can do no more. Enough is enough. 

For cases like this, Chapter 7 bankruptcy is often the answer. Filing for Chapter 7 is not for everyone. Unlike other forms of bankruptcy, like a Chapter 11 Bankruptcy the purpose of Chapter 7 is not to restructure your income and expenses in order to pay off your debt within a reasonable amount of time. Chapter 7 is for liquidating your assets. Unlike in a Chapter 13 Bankruptcy, this means that once you file for Chapter 7, all of your non-exempt property is sold and the money generated from those sales is redistributed among your debts. While it may seem at first glance that the debtor is left with nothing, the debtor also has the added benefit of being completely released from their debts.  

There are cases where the court may let a debtor maintain their car or home, if a reaffirmation statement is filed and payments are made. Couples can file for Chapter 7 bankruptcy either as individuals or jointly. However, if someone is filing individually they will still need to submit paperwork for about their spouse’s assets, income, and liabilities. 

If the loss of your property is not a concern for you, there are plenty of other benefits to filing for Chapter 7: