7 bankruptcy (also known as a “straight bankruptcy”) filing will generally
result in the discharge of most types of debts including credit card balances,
mortgage and automobile deficiencies, personal loans, most civil judgments,
collection accounts, and medical bills. There are, however, certain debts
that will not be discharged which include student loans, domestic support
obligations, fines/penalties arising from a crime or malicious conduct, and
debt procured by fraud. Furthermore, a person filing bankruptcy ("debtor")
may not receive a Chapter 7 discharge if he or she has received a previous
discharge under Chapter 7 in the previous eight years.
businesses and individuals may file Chapter 7 bankruptcy. A debtor with
primarily consumer debts is eligible to receive a Chapter 7 discharge if he or
she passes the Means Test. To pass the Means Test, the debtor’s average
monthly income for the past six months must be less than the California median
income as identified by bankruptcy laws or the qualified deductions must place the debtor's income beneath the disposable
income threshold. In addition, even when a debtor does not pass the Means
Test, there may be special circumstances that may be taken into consideration
to still qualify the debtor for a Chapter 7 bankruptcy.
the debt incurred is primarily business debt, a Chapter 7 business bankruptcy
filing, may be the best option. In a Chapter 7 business bankruptcy, if the debt is mostly business debt, then
the Means Test will not apply.
Approximately 4-5 weeks after the petition is filed, a 341 (a) Meeting of
Creditors will be held. At the meeting, the Chapter 7 Trustee will ask the debtor
questions about the debtor’s financial affairs and accuracy of the petition.
Creditors have the right to be present and ask questions regarding assets and
liabilities, however, it is rare when creditors do appear at the meetings. Once
the meeting begins, the meeting usually lasts no more than five minutes. Once
the meeting is concluded, if there are no objections, the debtor will receive
his or her discharge approximately 60 days after the 341(a) meeting.
The court filing fee for a Chapter 7 case is $335 (this amount changes periodically), which must be paid by the
debtor when the case is filed. The attorney’s fees we charge for a Chapter
7 petition vary on a case-by-case basis. Our fees, however, are
very reasonable. Additionally, we offer payment plans.