Bankruptcy is a legal process that helps individuals who have more debt than they can repay get a fresh start. If you have the means to repay your debts, you may be required to file Chapter 13. For debtors who do not have the means to repay their debts, Chapter 7 bankruptcy will discharge many of their debts.
There are pros and cons of filing Chapter 7 bankruptcy including the potential loss of your home or vehicle because your payments must be brought current to protect the asset and affirm the debts.
A Chapter 7 bankruptcy discharges your debts. A trustee will look at all your income, assets, and debts. You will have the option to protect some of your assets using legal exemptions that your California bankruptcy attorney will explain to you. Additional assets may be protected by affirming your intention to pay the debt. If there are assets that are not protected, the trustee will liquidate them and pay your creditors a part of the debt, but you will not have to pay the balance.
Chapter 7 bankruptcy is usually chosen by someone who has more unsecured debt than they can repay including credit card debt.
After the bankruptcy is discharged, your debts are considered satisfied. Your former creditors cannot attempt to collect discharged debts.
Some debts are not dischargeable including child support, student loans, criminal fines, and restitution.