Filing Bankruptcy

Our bankruptcy lawyers help clients with petitions for Chapter 7, also called “Straight Liquidation Bankruptcy.”  There are income requirements for filing Chapter 7, but it eliminates completely unsecured debt.  Secured debt, i.e., for a car or home that you still want to keep, must still be paid.  However, other credit card debt, personal loans, etc. can be eliminated.  This means that people can completely start over.  Read below for more information.

Chapter 7 Bankruptcy

In a chapter 7 personal bankruptcy, an individual and their spouse can eliminate completely unsecured debt which includes credit card debt, personal loans, and deficiency judgments on repossessed vehicles etc. The benefit in filing the Chapter 7 bankruptcy is that the debt is eliminated forever, and there is no future liability. The Chapter 7 bankruptcy gives people the opportunity to completely start over.  Let our bankruptcy lawyer help protect you from creditors.

In a Chapter 7 however, you must keep paying on any secured loan when the individual wishes to keep the property. For example, if you want to keep your car, you must also keep making the payment and stay current on your payment, or if you want to keep your home you must make the full payment and stay current on your payment. Also, there are certain debts that are not dischargeable such as fines and penalties, support obligations, student loans, and taxes.

There are income requirements for qualifying for a Chapter 7 bankruptcy. You must make at or under the amounts listed below:

1 Earner $45,000 per year

2 People $60,000

3 People $65,000

4 People $75,000

(These amounts are for 2008 and will be adjusted in the future.)

If your income is higher than the amounts listed, we have to perform a complete “Means Test.” The Means Test is a formula used to determine if you may still qualify for the Chapter 7. Basically, it is a debt to income calculation.  Our bankruptcy lawyer will make all calculations for you and keep you informed.

Effect on Credit

The Chapter 7 Bankruptcy stays on your credit for 10 years. You can file for a Chapter 7 Bankruptcy every 8 years and is measured from the date of filing. While there is no exact measurement for the number of points off your FICA score, you can expect at least a 100 point drop. You can rebuild your credit within a couple of years if you don’t have new negative marks. Things that help rebuild your credit are: making your car payment on time, your house payment and on credit cards, etc. Living at the same address for a long period of time and working at the same job can help as well.

Many people feel guilty for filing for bankruptcy. It should be understood that our bankruptcy lawyer and office does not pass judgment on our clients. We handle hundreds of cases on a yearly basis, and we are aware of the state of the economy, and in particular, the real estate market and the effect it has had on so many industries and families.

Law Offices of Aaron O. Anguiano

627 13th Street, Suite C

Modesto, CA  95354

Phone:  (209) 567-1040

Fax:  (209) 567-1051


Spanish Speaking / Bilingual Lawyer

Free Consultation / Case Review


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