Tag: chapter 7 bankruptcy California

What is No-Asset Chapter 7 Bankruptcy?
While the Chapter 7 is known as the bankruptcy code which sets off debt from the liquidation of assets, it can be surprising to learn about No-Asset Chapter 7 bankruptcy. It could be even more surprising to note that most of the Chapter 7 bankruptcy California cases are No-Asset cases. The no-asset case is a scenario where, the filer does not give in any asset or cash to the bankruptcy trustee for liquidation. The filer instead keeps possession of all the assets, he/she owns. The lenders or creditors will not expect any proceeds or debt settlement, as there would not be any since, the filer has no assets to give in to the bankruptcy trustee.

What is the core of Chapter 7 bankruptcy?

Chapter 7 classifies all assets held into two types. One is exempt and the other one is nonexempt. The nonexempt assets are given up for liquidation and their proceeds are used to settle the debts of the lender. Exempt assets are assets which are of basic necessity and have various codes and sections wherein they shall be exempt against the Chapter 7 bankruptcy procedures. These assets need not be given up during the Chapter 7 bankruptcy course. To know if your asset is exempt or non-exempt as per your state exemptions, log on to https://bankruptcy.staging.recoverylawgroup.com/.

How can a case turn into No-Asset case?

If you have used all the exemptions and have all your assets in the blanket of exempt assets and none in the nonexempt category, your case becomes a no-asset case. Close to 70% Chapter 7 bankruptcy witnessed in states like California, Texas, New York, etc., see no-asset case. Once you have protected all your assets under some or the other state/federal exemption, the bankruptcy trustee cannot liquidate the same to settle the debts of the lenders. In this scenario, the court sends notice information to all the lenders associated with the filer confirming no proceeds or debt settlement from the Chapter 7 bankruptcy filing.

The lenders or creditors would not need to file a proof of claim or record the amount owed by the filer. All the debts shall be released once the bankruptcy case has been settled by the court. However, if during the investigation, bankruptcy trustee comes across some nonexempt asset, the trustee will notify the lenders and collect documentation to allocate the hence generated proceeds towards the debt. For better understanding or help, reach out to +1 888-297-6203 now for the most professional and experienced attorneys California in town.
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August 7, 2019
Relief from Credit Card debt through Chapter 7 Bankruptcy
Chapter 7 Bankruptcy law in the USA offers people to declare bankruptcy to elicit relief from the debts. The debtor seeks this law when he/she is unable to clear the debts. People may file for bankruptcy when they have little or no assets to clear the debt. The creditor must be content with little or no payment. To know more about bankruptcy and its implication on the debtor and creditor, log on to https://bankruptcy.staging.recoverylawgroup.com/.

How can Chapter 7 help to clear credit card debt?

A client can file a case under chapter 7 when he is unable to clear his credit card debt. The court will only accept the case when it finds no evidence of fraud and any misuse of the law. The court appoints a trustee that examines the debtor’s assets and property which could be sold to pay the creditors. The property if at all is sold at market price to pay the creditors. The debtor, if has no assets to repay the creditor is often given relief from the debt. The debt then falls under discharge and the debtor is free from all debts.

However, the case can backfire if the debtor is found to be engaging his credit card on luxury items after filing the case.
- Buying luxury goods
The court is vigilant and examines closely the conduct of the debtor. If the debtor is buying anything above $675, within 90 days of applying for bankruptcy, the case can be dismissed by the court. Any goods above $675 fall under luxury consumption and the court does not allow such extravagance by the client. However, any expenditure availed against basic daily consumption of goods like food, clothing, etc. does not fall under luxury usage. The client may buy but must be careful of overindulging after filing the case under chapter 7.
- Withdrawing money
There could also be a limit to how much money you can withdraw after filing the case. The debt could turn into non-dischargeable if the client withdraws more than $950 within 70 days of applying for bankruptcy. The amount, however, is refreshed with every few years.

The court brings in such rules to prevent fraud and false filling of bankruptcy. To get the best advice and tips for filing under chapter 7, you can visit- Recovery Law Group.

The benefit of the doubt for the creditors

The court ensures that the creditors must also get due justice. While the debtor takes relief under chapter 7 bankruptcy California the creditor gains nothing but a hole in his pocket. The court allows the creditor to file a petition against the debtor. The creditor must file the petition within 60 days of the first meeting if he wants to challenge the debtor.

The debtor, on the other hand, can hold or halt the creditor if he files a timely reply to the creditor’s notice of non-dischargeable. The court then holds a hearing in benefit of both creditor and debtor, each being given an equal chance to prove their case. You can call 888-297-6203, for advice to make your case strong.

Alliances of debtor

When the debtor avails a credit card, he/she needs a guarantor. A guarantor or a consigner is a person who takes the responsibility of the debtor. They are bounded by the contract to repay the debt. When the debtor files the chapter 7 bankruptcy Californiabankruptcy case under chapter 7 the discharge to the debt is limited to the debtor and cannot be extended to the guarantor or consigners. Anyone other than the debtor, if is obligated for charges that the debtor has made, will still be liable after he/she files chapter 7, even if the case is in the debtor’s benefit. For finding the best attorney who could interpret and suggest solutions for your case, dial in 888-297-6203 now!
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August 5, 2019
Chapter 7 bankruptcy: An Assessment of Cost and Debt Discharge
If there is too much debt piled up, the only option available might be to file for bankruptcy. Before filing for bankruptcy, it will be worthy to find out what could be an estimated cost and what would be some of the debts that you could get rid off by filing for bankruptcy versus by not filing. Most of the stats indicated below are availed from reader’s surveys. To know more statistical information and technical aspects of bankruptcy, log on to Recovery Law Group.

Attorney fees

Keeping everything aside, the most difficult and common question to answer is how much would an attorney charge for a Chapter 7 bankruptcy? The question is difficult to address because there are so many factors leading to the attorney fees. Most readers also ask if the attorney is really essential. Well, as per 95% of the bankruptcy filers think attorney just eased the process of bankruptcy for them. A good number of people as per survey offered a flat fee of under $1,500 to their attorneys, while some found attorneys who charged $700 and $2,500 based on the complexity of their situation. It would not be a bad start to set aside $1,500 as an estimate for attorney fees.

Other Administrative costs

A filing fee of approximately $335 is levied for bankruptcy filers. This fee can be waived off under rare circumstances when the filer’s income is low or negligible. Apart from this, the filer is required to attend two financial counseling courses. An estimated cost for this would be about $60 per course. This inches the total cost for filing bankruptcy to about $450 and thereabouts.

What is the average release percentage for each debt?

It can be very enlightening to note the average debt release percentage based on the category of debt. This gives a clear hint if you should opt for Chapter 7 or not. If you possess debt which has the highest percentage, you should opt for Chapter 7 if not you need to reconsider your options.

Credit Card debt – As per stats in 98% of cases, such debt was fully discharged. While in 1% cases, the debt was partially released. There is a 1% chance that your credit card debt shall not be discharged. So, if your financial position is worst because of credit card debt, Chapter 7 is the best alternative to you.

Medical bills – Stats confirm a full discharge in 95% of the cases, a partial discharge in 4% cases and no discharge in 1% cases. Just like credit card debts, medical debts are debts which can be discharged almost fully in most cases. A similar trend could be associated with business debts, utility payment arrears, and phone bills.

Taxes – This is one of the debts which is usually not discharged or released. However, stats say in 35% cases, filers received a full discharge of tax debts. Also, 26% of filers got a partial waiver for the taxes. Overall, a total of 61% received some rebate in taxes due because of Chapter 7 bankruptcy filing.

Student loans – Student loans and taxes are some non-dischargeable debts. These debts are released only when ‘undue hardship’ is proven. This is a scenario when an individual will not be able to pay the debt in the present and in the near future due to very poor financial condition. Good 9% of cases received a complete discharge of student loans, while 6% of the filers received a partial discharge.

For releasing taxes debt and student loans, you will definitely need a very good attorney. It is not impossible, but it is very tough to get those loans released. A dial to 888-297-6203 might just help you find the right one.

Home mortgage – A Home mortgage is a common worry, unlike credit card and medical bills, only about 68% were able to retain their homes after Chapter 7 bankruptcy California. Most people cite losing their home after Chapter 7, this stat just emphasizes the same issue. However, under most circumstances, if you have paid most of your home equity or are current with your home mortgage, saving your home can be easy.

Automobile loan – The percentage for the automobile is slightly higher to 87% which is more than a relief. If you own a basic car which is not ultra-expensive or luxurious, it is possible to box it in the exempt asset category.

Time factor – Chapter 7 is probably the fastest when it comes to wrapping up debt and leading you into a fresh financial zone. Good 90% of people got the process completed in less than 6 months, with 53% filers able to wrap it in under 3 months. Only 10% of cases took over 6 months. This makes Chapter 7 a great option if you want to wrap up this ugly chapter of your life to the earliest.
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August 1, 2019
What Happens to Your Home in Chapter 13 Bankruptcy?
Individual debtors can opt for either Chapter 7 or Chapter 13 of bankruptcy. According to Dallas based bankruptcy law firm Recovery Law Group, Chapter 13 bankruptcy offers people to prevent foreclosure and also catch up on the arrearage through the repayment plan. If you wish to keep your home during and after bankruptcy, consult with expert bankruptcy lawyers at 888-297-6023 to discuss your case.

Chapter 13 allows you to pay your debt entirely or some portion of it over a period of 3 to 5-years through a repayment plan. You can pay mortgage arrearage including interest while staying current on your mortgage payments to prevent foreclosure on the property. If your sole purpose of filing for bankruptcy is saving your home, there are other methods available. You can avoid foreclosure by negotiation with the lender and opting for “mortgage modification” programs of government.

You can get rid of 2nd and 3rd mortgages through Chapter 13 bankruptcy California. In case the 1st mortgage is secured by the entire value of the home (due to reduced property rate), there no longer exists any equity for any subsequent mortgages. In such a case, these mortgages can be “stripped off” and recategorized as unsecured debts by the court. Under Chapter 13, debts are paid in this order: secured debts, priority debts and unsecured debts, with unsecured debts, sometimes not paid at all.

Automatic stay

Filing for bankruptcy puts a temporary halt on all collection actions including foreclosure and repossession. This takes place through the automatic stay provision. Once the repayment plan (with provision for paying off mortgage arrearage) is approved and confirmed by the court, the lender is bound by the agreement and cannot foreclose on the property. as long as you continue making regular payments towards the loans as per your bankruptcy plan, the automatic stay prevents any foreclosure action.

In case, there is no provision to address mortgage arrears in your repayment plan, the lender can continue with foreclosure proceedings even after the court approval of your repayment plan. If you do not wish to keep your home as part of your bankruptcy, filing bankruptcy papers gives you some respite from foreclosure proceedings for several months. Moreover, bankruptcy judges provide debtors numerous chances to come up with a viable repayment plan. Since confirmation takes time, debtors get a long respite from foreclosure proceedings.

An exception to automatic stay exists if you had previously filed for bankruptcy petition within the past 2 years during which the automatic stay was lifted on request of the creditor seeking foreclosure. In such a scenario, filing for Chapter 13 bankruptcy will not be able to stop foreclosure proceedings.

Modifying mortgages

Some secured debts can be modified in case the value of the property has reduced over time and is less than the amount owed by the debtor. In this case, cramdown option is available, which reduces the debt of the secured property to the market value and converts the remaining amount due to a nonpriority unsecured debt. However, there are certain limitations:

• You cannot cramdown on your residence;
• Cramdown is available for –
– a mortgage in a multiunit building;
– personal property loan other than your residence;
– mobile home considered personal property;
– the loan is secured by multiple collaterals (residence & business asset)

Once the loan is crammed down, you need to pay off the entire amount through your Chapter 13 repayment plan. It can dramatically reduce your debts and make your repayment affordable, however, you should have the funds to pay the entire amount at the end of your plan.
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July 30, 2019
Impact of Chapter 13 on your credit score
The credit score takes a solid beating when bankruptcy is filed in general. But the common question is to know which Chapter impacts the credit scores the most. The impact may also last for several years when bankruptcy is filed. Filing for bankruptcy under Chapter 13 is slightly more beneficial and lighter on your credit score, especially when compared to Chapter 7. If it is possible not to file for bankruptcy, that shall be the best option. To know if you need to file for bankruptcy or not, log on to Recovery Law Group to get a host of information and make the right decision

What is the choice of a lender?

The credit score impact is determined by the lender’s inclination towards the debtor choice. Most lenders have a slight inclination towards Chapter 13 filers. Unsecured debtors are likely to receive more portion of their debts when Chapter 13 is filed, hence, they always like Chapter 13 filers. This is quite reverse during the Chapter 7 bankruptcy. Unsecured creditors might end up receiving nothing out of the Chapter 7 bankruptcy and all their debt has to be written off. Also, the exemptions available under Chapter 7 are beneficial. A Chapter 7 bankruptcy can very less nonexempt assets for liquidation and recovery. Overall, the debt released or discharged is larger in Chapter 7. This is the primary reason why lenders do not seem to prefer Chapter 7 history debtors.

On the other hand, with Chapter 13 3-5 years, there is an attempt by the debtor to pay off the maximum chunk of secured as well as unsecured debts. Until unless the claims are valid and well supported with a proof, the debtor ends up paying off a good chunk of debts. This makes it favorable for a lender and hence, Chapter 13 is the lender’s choice.

Credit score impact

Filing of bankruptcy is usually the last choice. If you are considering filing bankruptcy, you must have been struggling with delayed or missed payments from some time now. This has already impacted your credit score significantly negatively. Filing of bankruptcy will only prevent further damage to this already impacted credit score. But, if your credit score is high and you choose to file bankruptcy, the impact will be huge too. There can be a drop of about 100 points depending on circumstances on an average once you file for bankruptcy.

The formula used to calculate or estimate credit score is very different. Different agencies use different formulae and are reluctant in disclosing the same. Filing bankruptcy via Chapter 13 or Chapter 7 has an almost equal negative impact on the credit score. But, as realized earlier, Chapter 13 filers might have some edge for future, if they are to avail any sort of credit in future after filing bankruptcy previously.

Availing credit after filing bankruptcy

The Chapter 13 payment plan lasts for about 3-5 years. During this period, the filer is prohibited from taking any additional credit. This is one of the biggest flaws of Chapter 13 as during an illness, or major breakdown or any other such circumstances, you just cannot avail any sort of credit during that period. The bankruptcy court understands certain situations wherein additional credit can be necessary, for this to be allowed, your attorney might have to pass a motion in the court, which shall allow you to workout with some creditors that facilitate credit to even people in Chapter 13 bankruptcy payment plan.

Availing credit after bankruptcy will cost big. High-interest rates and a lot of paperwork is common if you try to avail credit after bankruptcy. It is key to enter a stabilized financial situation and then take credit only if necessary. Once, you start availing credit and paying it off in right times, the credit score as well as interest seems to improve with time. There is not much difference in this improvement between a Chapter 7 or Chapter 13 bankruptcy filer California. However, in crunch time, Chapter 13 filers are bound to get a slight advantage over Chapter 7 filers.

Credit score reporting corrections

It is a good practice to verify the credit reports. After filing bankruptcy some of the debts might still be listed as ‘unpaid’, which can negatively influence the credit eligibility in the future. Also, the debt released should be appropriately reported as ‘included in bankruptcy’ and not ‘dismissal’. For understanding your credit report or to know more about bankruptcy or the Chapters, call 888-297-6203 now and address all your questions from in-house experts.
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By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.
July 28, 2019
How to Determine Chapter 13 Bankruptcy Eligibility?
Chapter 13 can be a very good option for many people, especially those who are struggling to keep up their assets intact even after filing bankruptcy. However, not all filers are eligible to apply for Chapter 13 bankruptcy code. There some basic requirements to be eligible for filing under Chapter 13. These can be listed as follows-
- No lag with respect to income tax filing whether federal or state
- The debt is within the predefined threshold
- Should be employed or should have some income source to fund the payment plan to be determined under Chapter 13
- Should be an individual and not a business. The sole proprietor is an exception as all business accounts are merged into the individual’s account for bankruptcy purposes
What has the income tax filing got to do with my eligibility?

The income tax filing is a very basic requirement as people evading state and federal tax liability are not regarded with great respect in the eyes of law. The income tax filing for state and federal has to be current. Also, there should be a clean history with respect tax filing for the last 4 years from the date of filing for bankruptcy. If you are not current with respect to the last 4 years, you can get current as soon as possible and present the same to the court in order to prevent your case from being dismissed. To know more about getting current and getting eligible for Chapter 13, log on to Recovery Law Group .

What does “Source to fund the Chapter 13 payment plan” mean and include?

Chapter 13 is a fixed payment every month for a specific time period up to 5 years to repay as much of debt possible. This fixed monthly payment needs to be sourced appropriately and has to be some income, which over and above, basic expenses. The additional income or disposable income can be sourced from multiple avenues as listed below-
- Salary or wages may be regular and/or seasonal
- Self-employment income
- Commissions / Incentives that are related to job/employment a more permanent or consistent in nature
- Social security and pension
- Disability/worker’s compensation benefits
- Welfare / Unemployment benefits
- Any child support or alimony received
- Rents and Royalties
- Proceeds from the sale of assets like real estate, particularly if your nature of business involves sale and purchase of assets
- The income of spouse, if married
The basic requirement for the income source to qualify is that it should be consistent and over and beyond the basic necessities. There should be some disposable income that could be diverted to Chapter 13 payment’s plan.

Benefits, flaws, and restrictions for Chapter 13

Benefits are very clear, if you are not eligible for Chapter 7 bankruptcy or if you wish to safeguard all or most of your assets, this is the best alternative available. Also, the credit score improvement can be slightly easier with respect to Chapter 13. The major flaw is with respect to the debt threshold. If your debt is beyond that threshold you won’t be eligible for Chapter 13. Also, with businesses not able to consider this Chapter, it holds no good even for stockbrokers and commodity traders. Stock and commodity traders are restricted from using Chapter 13 even if they want to release their personal debts.

Procedure for filing Chapter 13

The basic requisite as a procedure for Chapter 13 is to disclose all information, with respect to your current financial condition, in the most accurate form possible. Expenses, income, lenders, assets, recent transactions, etc., all have to make a detailed appearance in the bankruptcy documents. You need to take a counseling course that will teach you to manage finances better and pay a filing fee along with the documents package to begin the bankruptcy filing under Chapter 13. Under most circumstances, you get 2 weeks or 14 days to submit for a repayment plan unless and until the timeline is revised by the court. Documentation and procedure always require consultation and expert advice. When you have all that with just a phone call, why wait and waste time then. Dial in +1 888-297-6203 now.
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By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.
July 27, 2019
Motor vehicle exemption act and bankruptcy
Cars, trucks, automobiles, etc., attract a lot of tension during bankruptcy. Travelling can be an expensive and painful affair without a car in most cities in the United States. No individual wants to let go of his/her car for whatever reason there might be. Bankruptcy can be one of the situations that would require a compromise as an automobile loan is considered as a secured loan and is released in very rare circumstances. It is much easier to protect your automobile assets if you are filing for bankruptcy via Chapter 13 versus Chapter 7. The key distinction between Chapter 7 and Chapter 13 is the provision they allow for in order to settle the debts. Chapter 7 liquidates all your non-exempt assets in order to payoff secured and other priority debts with its proceeds. Your automobile might well fall under non-exempt asset. To know more about exempt and non-exempt assets, log on to Recovery Law Group.

On the other hand, Chapter 13 emphasizes on creating a future repayment plan which means your current assets are not under any kind of danger. This plan, however, lasts for 36-60 months and a debtor ends up clearing most of his/her debt with the disposable income realized/calculated by the bankruptcy court.

How do you protect your vehicle when applying for bankruptcy under Chapter 7?

Under normal circumstances, the vehicle is part of a secured loan and has to be prioritized across other loans during liquidation. Also, cars, vans, trucks, and motorcycles do not form a part of exempt assets hence, the bankruptcy trustee has full authority to liquidate the asset and pay off the debts. The motor vehicle exemptions act can help protect your vehicle in these circumstances. If the entire equity of your vehicle has been covered under the car exemption, the bankruptcy trustee might not be able to liquidate your car. If the car equity is partially covered under car exemption, the bankruptcy trustee can still be able to consider it as a non-exempt asset for liquidation.

Apart from being a game changer in the Chapter 7 bankruptcy California code, the motor vehicle exemptions have a significant role to play in Chapter 13 code also. If your vehicle is not protected under the exemption, it will add up to the tally of nonexempt assets, which ultimately decides the amount due to unsecured creditors. This means you will end up paying out more unsecured debt if your tally of nonexempt assets is higher. Getting your vehicle covered with motor vehicle exemption act can be a good move considering these aspects.

Federal and State laws to be used for safeguarding your vehicle

There are different circumstances, situations when Federal law is beneficial and can prevail over state laws. Historically, people filing for bankruptcy without an attorney or qualified professional help have failed to retain their cars, trucks, vans and other vehicles. The bankruptcy trustee isn’t the most lenient person when it comes to the nonexempt assets. Sometimes, it can just be beneficial to let go of your car and sometimes, there are ways to protect your car by making different arrangements before filing bankruptcy and after. Every situation case is different and needs a thorough/professional analysis to determine a beneficial situation for the bankruptcy filer. Seek the best professional help right on your phone at +1 888-297-6203.
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By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.
July 20, 2019

Difference Between Chapter 7 and Chapter 13 Bankruptcy

Individuals can file for bankruptcy under chapter 7 or chapter 13. There are differences in the way these two chapters function. Bankruptcy attorneys of Dallas based law firm Recovery Law Group, highlight some of the common differences between the two chapters. This is essential for people to know which chapter would work best in their situation.

Chapter 7 Bankruptcy

This is also known as liquidation bankruptcy and is used to wipe out unsecured debts like credit card and medical bills. People whose income is less than the state median can file under this chapter. Filing for bankruptcy ensures that any collection actions like wage garnishment etc. are put on hold due to the automatic stay. The bankruptcy filer’s property is assessed and divided into the exempted and non-exempt property. The non-exempt property is used to pay back your creditors. In case there are no non-exempt assets, the creditors get nothing. This type of bankruptcy can also help people whose discharged debts are more than the value of the non-exempt property sold. Also, the trustee can use the proceeds of non-exempt property sale to clear non-dischargeable debts like income tax or alimony support.

Chapter 13 Bankruptcy

People who fail to qualify for chapter 7 bankruptcy have the option of filing for chapter 13 bankruptcy California . This bankruptcy chapter is also known as the wage earners plan and is for those debtors who have a regular income. The bankruptcy filer’s disposable income, assets, and debts are considered to come up with a repayment plan through which a portion of the debts is paid off every month for a period of 3 to 5 years. This chapter helps you catch up on any mortgage payments you missed, or completely get rid of unsecured junior liens from your home.

You also get to keep all your property including non-exempt ones after paying unsecured creditors, an amount equal to the value of non-exempt property. You can payback all or some portion of your debts through the repayment plan. This chapter can help people get debt relief, prevent wage garnishment, foreclosure, litigation against them, or lower credit card payments. People can pay off their non-dischargeable debts like child support arrears over a period of 3 to 5 years and catch up on missed car or house payments to keep their property.

In case you are considering filing for bankruptcy and are confused which chapter will work best for you, you can call 888-297-6023 to get free bankruptcy consultation. Here are some key differences between the 2 chapters:

	Chapter 7	Chapter 13
Type of Bankruptcy	Liquidation	Reorganization
Who can file?	Individuals and business entities	Only for individuals and sole proprietors
Eligibility criteria	Disposable income low should pass the means test	Unsecured debt should not exceed $419,275 and secured debt should not be more than $1,257,850
Timing of discharge	Usually 3-4 months	On completion of the repayment plan (3-5 years)
Fate of property	Non-exempt property is sold off by the trustee to pay creditors	Can keep all property but pay an amount equal to the non-exempt property to unsecured creditors
Is lien stripping allowed?	No	Yes, if the requirements are met
Is principal loan balance on secured debts reduced?	Yes, in case of tangible personal property only	Yes, if all requirements are met
Benefits	Quick discharge of qualifying debts	Can keep all property, catch up on missed payments (car, mortgage, and other non-dischargeable priority debts
Drawbacks	Non-exempt property is sold off by trustee; cannot catch up on missed payments to prevent repossession or foreclosure	Continue making payments to the trustee as per repayment plan for 3-5 years duration; might have to pay back some general unsecured debts

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July 19, 2019

Know More about California Bankruptcy Exemptions
Bankruptcy filers can make use of federal and state exemptions to protect their assets. However, choosing between them is confusing. Some states like California do not allow citizens to choose federal exemption but offer two different sets of exemptions to protect your property during bankruptcy, say Lawyers of Los Angeles based bankruptcy law firm Recovery Law Group. To know more about California’s bankruptcy exemptions, call 888-297-6023.

Bankruptcy exemptions in California

Amongst the two sets of exemptions provided by the state of California, System 1 is preferred by debtors with substantial home equity, while System 2 is preferred by debtors who have valuable property other than home equity. It is important to know that double exemptions are not available to married couples filing for a joint bankruptcy in California.

Objections can be raised by the bankruptcy trustee to your exemptions and you might end up losing the property if you aren’t careful. You need to list your protected assets on form Schedule C along with other official bankruptcy papers to keep your exempt property. Schedule C is reviewed by both court-appointed official and the bankruptcy trustee to ensure that the claims in the papers agree with the exemption set. In case it is not the case, an objection is filed in court with the judge deciding whether you can keep the property or not.

Trustees generally object in case a debtor is trying to fraudulently get some of their assets exempted. If a minor exemption problem is encountered, then an informal arrangement can be made to rectify it. supplying factually incorrect financial statements in a bankruptcy case can have serious implications. Bankruptcy fraud is a punishable offense with a fine of $250,000, 20 years prison term or both.

Exemption system 1 of California

The exemptions are updated every three years to factor in rising inflation. The various exemptions in this system include:
1. Homestead
Some amount of equity in your primary residence can be protected. This covers a community apartment, mobile home, stock cooperative, planned condominium or boat. The amount of equity you can cover is up to $75,000 for single and not disabled individuals; $100,000 in case of a family; $175,000 if you are 65 years or older or are physically or mentally disabled; $175,000 if creditors are forcing the sale of your home and you are either 55 or older, single and earning $25,000 per year; or are 55 or older, married and earning $35,000 per year.
1. Motor vehicle
You can protect $3,325 worth of equity in motor vehicle exemption which includes motorcycle, car, truck or any other vehicle.
1. Personal property
- Household items and personal belongings;
- The residential building material for repairing home up to $3,500;
- Jewelry and heirlooms including art up to $8,725;
- Health aids;
- Bank deposits due to Social Security payments up to $3,500 for a single payee and $5,250 for husband and wife payees;
- Bank deposits from other public benefit source up to $1,750 for an individual and $2,600 for husband and wife payees;
- Cemetery and burial plots;
- Personal injury and other claims which are essential for support.
1. Wages
- Public employee vacation credits (minimum 75% in case payments are made in installments)
- 75% of wages paid within 30 days prior to a bankruptcy
1. Pensions and retirement accounts
- IRAs and Roth IRAs limits;
- Public retirement benefits;
- Tax-exempt retirement accounts including 401(k)s, 403(b)s, SEP and SIMPLE IRAs, profit sharing and money purchase plans, etc.;
- Public employees
- County employees
- County fire fighters;
- County peace officers;
- Private retirement plans and benefits like Keogh and IRA.
1. Public benefits
- Public assistance benefits;
- Student financial aid;
- Workers’ compensation benefits;
- Relocation benefits;
- Unemployment and disability benefits;
- Union benefits as a result of labor
1. Tools of trade
Any tools which are essential for you to continue your job/livelihood are exempted up to $8,725 or up to $17,450 if both spouses, in the same profession use them. These include books, instruments, equipment, tools, materials, implements, uniforms, a commercial vehicle, and furnishings.
1. Insurance
- Unmatured life insurance policy up to $13,975 or a matured life insurance benefits of unlimited value;
- Fidelity bonds;
- Life insurance policy in case policy specifically prohibits its use to pay off creditors;
- Disability or health benefits;
- Homeowners’ insurance for 6 months after received, up to the amount of homestead exemption.
1. Miscellaneous
- Trust funds up to $1,600;
- Business or professional licenses;
- Property of business partnership.
Exemption system 2 of California

This system can be used only in bankruptcy and does not work to compensate creditors outside of bankruptcy and includes:
1. Homestead
You can have an equity of $29,275 in a personal property which can be used as a residence.
1. Motor vehicle
Up to $5,850 equity in motor vehicles is exempted.
1. Personal property
- Health aids;
- Jewelry up to $1,750;
- Burial plot up to $29,275 in place of homestead exemption;
- Wrongful death recoveries essential for support;
- Household goods, clothing, appliances, animals, books, furnishings, musical instruments, and crops up to $725 per item;
- Personal injury recoveries up to $29,275.
1. Pensions and retirement
- ERISA-qualified pension, annuities, and benefits essential for support;
- Tax-exempt retirement accounts including 401(k)s, 403(b)s, money purchase and profit-sharing plans, SEP and SIMPLE IRAs, and defined benefit plans;
- IRAs and Roth IRAs with limits.
1. Public benefits
Crime victims’ compensation, unemployment compensation, Social Security, Veterans’ benefits and public assistance.
1. Tools of trade
Any books, tools, and implements essential for a job up to $8,725.
1. Alimony and child support
The amount essential for the support of spouse and child.
1. Insurance
- Unmatured life insurance policy;
- Unmatured life insurance accumulated interests, dividends, loan, cash or surrender value up to $15,650;
- Disability benefits;
- Loss of future earnings payments essential for support.
1. Wildcard
$1,550 apart from any unused burial or homestead exemption in any property. In case no homestead exemption is used, up to $30,825.
*Are you more than 60 days past due on your mortgage?
YesNo

*Do you own a home?
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Are you currently working?
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By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.
July 18, 2019
How to protect important assets during bankruptcy?
Bankruptcy is an unfortunate financial condition and safeguarding or holding on to some near and dear assets can be a very difficult task. Chapter 7 bankruptcy code especially is not very suitable for people who want to hold on to their assets. However, with the help of exemptions, certain ordinary and modest assets can be protected and prevented from the liquidation process. These may include clothing, home, car, household stuff, tools used in the business/profession, etc. To learn more about bankruptcy codes, log on to Recovery Law Group now. The exemptions can help in protecting the assets which you might not be able to safeguard otherwise during bankruptcy. One such exemption is the wildcard exemption.

What is the Wildcard Exemption?

Wildcard exemption tries to value sentimental and emotional feelings in addition to basic necessities. The best examples could be some of your sports collections, fan collections, grandmom or ancestral property attachment like a piano or some other asset with a financial value that can be tagged with sentiments or emotions. While every state differs slightly in the type of exemptions they offer, other states might provide a choice between the federal and the local state exemptions. There is no possibility of mixing and matching what you like or do not like though.

Different type of exemptions and their thresholds

Most exemptions under Federal or state rule are targeted to specific assets. Here is a look at some federal exemptions with their threshold to better understand what assets could potentially be safeguarded-

·         A $25,150 equity in the personal residence

·         A $4,000 of equity in a motor vehicle or an automobile

·         $13,400 worth fair market value of household goods that include clothing, furnishing, appliances, etc. There is a cap of $625 per item. Which means any one item cannot exceed $625 in the cumulative of $13,400.

·         $2,525 worth tools and equipment used in business or profession.

These amounts are valid until 2022. They are bound to change every 3 years based on inflation and other factors. The state exemptions might be slightly higher or lower to the federal exemptions depending on the cost of living and inflation in the particular state. For instance, it can be high for a state like New York while it can be lower for a city like Dallas in Texas. However, by the federal standard, the bankruptcy filer can get a rough idea of which assets, he/she will be able to protect under these exemptions.

Benefits of Wildcard Exemption

The biggest benefit of wildcard exemption is that it is not been limited to any specific type of asset. The choice of property is left to the discretion of the user. The user can decide on whether to use it in his car, expensive painting, jewelry, etc. The other benefit is you can split the threshold amount to multiple assets as per your convenience. The below items can be safeguarded under wildcard exemption rule-

·         Jewelry

·         Spouse and child support

·         Automobile

·         Residential home equity

·         An ERISA verified retirement account

·         Any other justifiable non-luxury asset

What is the threshold?

Most states use the federal exemption threshold which offers an individual an exemption of $1,325. The additional unused amount of $12,575 in the federal homestead exemption can also be clubbed with the $1,325. This threshold doubles up for a married filing joint scenario. The state exemption might vary slightly from the federal exemption. You might still want to confirm the same. Look into some additional terms in the state rule book of select states for using certain exemptions like the wild card exemption. Get in touch with the best attorney in California for your bankruptcy help at 888-297-6203.
*Are you more than 60 days past due on your mortgage?
YesNo

*Do you own a home?
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Are you currently working?
YesNo

By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.
July 18, 2019