Filing for Chapter 7 bankruptcy in California offers a ray of hope for those drowning in debt. We specialize in demystifying the bankruptcy process, providing the clarity and support you need to make informed decisions about your financial future. This article delves into the critical aspects of Chapter 7 income limits, the means test, and other essential topics to determine your eligibility for debt relief. Understanding Chapter 7 income limits in California is essential for anyone considering this path for debt relief. These limits are pivotal in determining your eligibility for Chapter 7 bankruptcy.
Those in the military have the same right as any to file for bankruptcy relief and actually enjoy certain benefits over civilian debtors. On the other hand, filing for bankruptcy can also affect your security clearance in some situations.
Service members are offered federal protection in civil actions thanks to the Service-member’s Civil Relief Act, or SCRA. This act allows courts the right to put a stay or postpone bankruptcy and non-bankruptcy proceedings being taken against military personnel while they are on active duty. These protections are separate from the automatic stay normally provided by bankruptcies.
Exemptions from Means Testing
Normally, those looking to qualify for Chapter 7 bankruptcy need to pass a means test in order to disqualify those debtors who have enough disposable income to repay part of their debts from filing for bankruptcy. Disabled veterans, however, who have debts which were incurred mainly while on active duty, are not required to complete such a means test to qualify for Chapter 7.
Furthermore, National Guard members and reserve units of the armed forces who were called up for at least 90 days after September 11, 2001 are also excluded form a Chapter 7 means test while on active duty and for 540 days afterwards. Those who qualify must still complete the means test form no more than 14 days after the beginning of the 540-day exclusion period.
While your security clearance will not be affected automatically by filing for bankruptcy, it can factor into a decision regarding your clearance along with your job performance and relationships with superiors and coworkers.
Clearance decisions are made on a case by case basis but having a considerable amount of debt can be seen as a negative to your superiors. You should inquire into how your clearance may be affected before you even file for bankruptcy.
Kostopoulos Bankruptcy Law, our Oakland bankruptcy lawyers help clients in financial distress make important and positive decision to help manage their debt. If you are in the military currently or a veteran, speak with our firm for legal counsel!
Filing for bankruptcy is a serious step. Before you make the decision, you should know what option is best for you. By understanding the differences between Chapter 7 and Chapter 13, you can make an informed choice before filing for bankruptcy.
Not only does the chapter you select influence your immediate financial situation, but it can also effect you in the future. For this reason, it is helpful to know how the two main consumer chapters differ.
What are the main differences?
Chapter 7 is frequently referred to as liquidation bankruptcy, as property will be sold to cover debts. To qualify for Chapter 7 bankruptcy, an individual must be below a certain level of income. Choosing Chapter 7 is basically like scrapping everything and starting over. While you may be able to qualify for certain exemptions for your property, a good portion of it will be liquidated in order to pay off any undischarged debt. In order to have your debts paid off, you must essentially give your bankruptcy trustee permission to sell any non-exempt property and distribute the proceeds to creditors.
In contrast, Chapter 13 is much more focused on readjusting or reorganizing debts and payment plans, rather than paying them off with personal property. You will file a repayment plan in order to pay off either all or a portion of your debts over a designated time period.
How much debt you must pay off will depend on a few factors, such as:
- Your income or salary
- The amount of secured and unsecured debts involved
- How much property or assets you own
You won’t have to liquidate any property in this type of bankruptcy plan, which means individuals can often avoid foreclosure and keep their homes when filing Chapter 13.
Take Steps Towards Financial Freedom
If you have questions about which chapter of bankruptcy is right for your financial situation or would like to learn more, be sure to contact Kostopoulos Bankruptcy Law today for counsel. We are Certified Bankruptcy Specialists and have assisted thousands of clients in the past!
Financial freedom is just a phone call away. Get in touch with our legal team today to discuss your case.