Kostopoulos Bankruptcy Law

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What Assets Are Protected in Bankruptcy in California?

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If you’re considering bankruptcy, you may be wondering: What assets are protected in bankruptcy in California?

In California, key bankruptcy exemptions include up to $600,000 in home equity, $3,325 in vehicle equity, protected retirement accounts, personal belongings, and public benefits such as Social Security. Exemptions help filers keep essential property while resolving debt through Chapter 7 or Chapter 13 bankruptcy.

With decades of experience guiding Californians through bankruptcy, I’ve helped countless individuals protect their homes, vehicles, and financial security. Let’s examine the assets that remain protected when filing for bankruptcy in California.

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Can Bankruptcy Stop Foreclosure in California?

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If you’re facing foreclosure, you may be wondering: Can bankruptcy stop foreclosure in California?

Yes, filing for bankruptcy can temporarily stop foreclosure in California through the automatic stay, which halts all collection actions, including foreclosure proceedings. This legal protection gives homeowners time to explore their options and potentially save their home.

With decades of experience assisting individuals in financial distress, I’ve helped countless homeowners use bankruptcy laws to stop foreclosure and regain control of their financial future. Let’s examine how Chapter 7 and Chapter 13 bankruptcy affect foreclosure and what you need to know to protect your home.

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Can Chapter 13 Stop Foreclosure in California?

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If you’re facing foreclosure, you may be wondering: Can Chapter 13 bankruptcy stop foreclosure in California?

Yes, Chapter 13 bankruptcy can stop foreclosure in California. The automatic stay immediately halts foreclosure proceedings, and the structured repayment plan allows homeowners to catch up on missed mortgage payments over three to five years.

With decades of experience helping Californians protect their homes from foreclosure, I’ve assisted countless homeowners in using Chapter 13 to regain financial stability. Let’s explore how this process works and what you need to know to safeguard your home.

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What to Expect After Filing Chapter 7 Bankruptcy in California

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If you’re considering bankruptcy, you may be wondering: What happens after filing Chapter 7 bankruptcy in California?

After filing Chapter 7 bankruptcy in California, an automatic stay immediately halts all creditor collection efforts, including wage garnishments, foreclosures, and lawsuits. The court will notify creditors of your case, and you’ll be required to attend a 341 Meeting of Creditors before your eligible debts can be discharged.

With decades of experience helping individuals navigate bankruptcy, I’ve guided countless Californians through the Chapter 7 process to achieve financial relief. Let’s break down what you can expect after filing and how to prepare for the next steps.

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How Much Does it Cost to File Bankruptcy in California?

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If you’re considering bankruptcy, one of your biggest concerns might be the cost. You may be wondering: How much does it cost to file bankruptcy in California?

As of 2025, the court filing fees for bankruptcy in California are:

  • $338 for Chapter 7
  • $313 for Chapter 13

Beyond court fees, attorney costs can range from $1,000 to $5,000, depending on the complexity of your case. Other expenses may include credit counseling courses and miscellaneous administrative fees.

With decades of experience assisting Californians through the bankruptcy process, I’ve helped countless individuals understand the financial aspects of filing. Let’s explore the full cost breakdown and what to expect when filing for bankruptcy in California.

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Can You Use Debt Consolidation For Car Loans?

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If you’re struggling with multiple payments, you may be wondering: Can you use debt consolidation for car loans?

Yes, a car loan can be included in debt consolidation through a personal loan, home equity loan, or specialized auto refinance programs. Lenders may require good credit and sufficient income to qualify. Weigh the new loan’s interest rate and terms before consolidating.

Common methods include:

  • Personal Loans: Unsecured loans that combine your car loan with other debts into one fixed monthly payment.
  • Auto Loan Refinancing: Replacing your current car loan with a new one at a lower interest rate or extended term.
  • Home Equity Loans or HELOCs: Using your home’s equity to consolidate car loans and other debts.
  • Balance Transfer Credit Cards: If available, a 0% APR balance transfer could help consolidate short-term auto-related debt.

With decades of experience helping individuals manage debt, I’ve guided countless clients through the best debt consolidation strategies. Let’s explore how each option works and which may be the right choice for your financial situation.

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Are There Any Exemptions for Specific Assets in California Bankruptcy Cases?

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If you’re considering bankruptcy in California, you might be wondering: Are there any exemptions for specific assets in California bankruptcy cases?

Yes, California offers specific asset exemptions under two exemption systems: Section 704 and Section 703. The 704 system provides stronger protections for home equity, while the 703 system offers flexibility for personal assets. Exemptions cover vehicles, jewelry, household goods, retirement accounts, and more, ensuring you can retain essential property during bankruptcy.

Having helped countless individuals protect their most valuable assets in bankruptcy, I know how important it is to choose the right exemption strategy. Let’s break down the key asset protections available under California law.

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How Can I Protect My Assets When Filing for Bankruptcy in California?

Posted on by Kostopoulos Bankruptcy Law

Filing for bankruptcy can be a difficult decision, especially when you’re concerned about losing your assets. How can you protect your assets when filing for bankruptcy in California?

In California, you can protect your assets by using the state’s bankruptcy exemptions, which shield essential property like home equity, vehicles, retirement accounts, and personal belongings. Choosing the right exemption system—either the 703 or 704 set—can help maximize protection and allow you to keep critical assets while discharging eligible debts.

With decades of experience helping clients secure their financial future, I understand the strategies that can help preserve your property during bankruptcy. Let’s explore the best ways to safeguard your assets under California law.

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Is Workers Compensation Considered Income for Bankruptcies in Michigan?

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Bankruptcy can be a smart strategy for many people in debt, but those who receive funds due to a work-related medical condition often have a critical question: Is workers’ compensation considered income for bankruptcies in Michigan?

No, workers’ compensation benefits are not usually considered income in Michigan bankruptcy cases. However, the treatment of workers’ compensation benefits may vary depending on the type of bankruptcy and other factors. 

However, there are some exceptions to the general rule that could put your worker’s compensation benefits at risk. It’s best to work with a Michigan bankruptcy lawyer who can advise you on protecting the financial support you rely on when dealing with a workplace injury or occupational illness.

In addition, you can read on for some background on how workers’ comp benefits are treated in Chapter 7 and Chapter 13 bankruptcy cases.

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FAQs About Bankruptcy and Workers Comp Income

What is considered income for bankruptcies?
In bankruptcy cases, income includes any money received by the filer regularly, such as wages, self-employment earnings, rental income, pension payments, and Social Security benefits. However, workers’ compensation benefits are generally not considered income under federal bankruptcy law.

These benefits are typically exempt from the income calculation used in the means test for Chapter 7 or disposable income assessment in Chapter 13. Accurate reporting is essential for compliance with bankruptcy requirements.
What assets are exempt from Chapter 7 in Michigan?
Michigan law provides exemptions to protect specific assets during Chapter 7 bankruptcy. Common exemptions include:





Homestead Exemption: Protects equity in a primary residence up to a specified limit.



Personal Property Exemptions: Covers clothing, household goods, and furniture up to a certain value.



Vehicle Exemption: Protects the value of one motor vehicle within a statutory limit.



Wage and Benefit Exemptions: Safeguards wages, workers’ compensation, and Social Security benefits.

These exemptions aim to help filers retain essential items and regain financial stability after bankruptcy.
Do you lose retirement accounts in bankruptcies?
Retirement accounts are typically protected in bankruptcy through exemptions under federal and Michigan laws. Accounts like 401(k)s, IRAs, and pension plans are usually exempt from creditors. Traditional and Roth IRAs have a federal exemption limit (currently over $1.5 million), while qualified ERISA accounts are fully protected. Proper filing protects these items.
Is unemployment compensation exempt under Michigan bankruptcy laws?
Unemployment compensation is generally exempt under Michigan bankruptcy laws. State and federal exemptions protect these benefits, so that they are not included in the bankruptcy estate or seized by creditors. Accurate reporting and proper documentation are essential to safeguard these funds during bankruptcy proceedings.
How much equity can I have in my home and still file Chapter 7 in Michigan?
Under Michigan’s homestead exemption, filers can protect up to $40,475 in equity for a primary residence. For married couples filing jointly, this amount increases to $60,725. Michigan residents aged 65 or older or those with disabilities may qualify for additional protections. These limits allow filers to safeguard their homes during Chapter 7 bankruptcy while liquidating other non-exempt assets to repay creditors.
Can you keep your car in Chapter 7 in Michigan?
Yes, Michigan’s vehicle exemption allows filers to protect up to $3,775 of equity in a single motor vehicle. If the filer owes money on the car loan and the equity is below this limit, they can often keep the vehicle by reaffirming the loan or continuing payments. For cars with higher equity, the filer may need to negotiate with the trustee or use other exemptions to cover the excess value and retain the vehicle.

What Are the Differences Between Chapter 7 vs. Chapter 13 in Michigan?

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If you’re considering bankruptcy, choosing between Chapter 7 and Chapter 13 is a critical decision. You might be wondering: What are the differences between Chapter 7 vs. Chapter 13 in Michigan?

The biggest difference is that Chapter 7 eliminates unsecured debts through liquidation, while Chapter 13 allows you to reorganize your debts into a structured repayment plan.

  • Chapter 7: Discharges unsecured debts (credit cards, medical bills, personal loans) but may require selling non-exempt assets.
  • Chapter 13: Lets you keep your property while making structured payments over 3–5 years to catch up on secured debts like a mortgage or car loan.

With decades of experience assisting Michigan residents through bankruptcy, I’ve helped countless individuals determine which option best suits their financial situation. Let’s break down the key differences and eligibility requirements for both Chapter 7 and Chapter 13 in Michigan.

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FAQs About Chapter 7 vs. Chapter 13 in Michigan

What is the main difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 eliminates unsecured debt by liquidating non-exempt assets, while Chapter 13 reorganizes debts into a repayment plan and allows you to keep your assets.
Which bankruptcy chapter is faster to complete?
Chapter 7 is quicker, generally taking 4–6 months to complete, whereas Chapter 13 extends over a period of 3–5 years.
Can Chapter 13 bankruptcy stop foreclosure?
Yes. Chapter 13 allows you to catch up on mortgage payments and prevent foreclosure through a repayment plan.
Do I need regular income to file for Chapter 7?
No. Chapter 7 does not require regular income but does require passing the means test.
Can I discharge taxes through Chapter 13?
Yes. Chapter 13 can help discharge certain taxes that are not eliminated in Chapter 7.
What happens to secured debts in Chapter 7 vs. Chapter 13?
In Chapter 7, you must stay current on secured debts to keep property, while Chapter 13 lets you catch up on arrears over time.
How can an attorney help me choose the right bankruptcy chapter?
An attorney evaluates your financial situation, explains the benefits of each chapter, and ensures you meet eligibility requirements.

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