While bankruptcy may not eliminate all a person’s debt, it can absolve them of much. For debt that can’t be discharged because they are tied to assets – like cars or homes – sometimes you can create payment plans for what isn’t covered.
Unfortunately, some debt can be part of a bankruptcy filing at all. Generally, loans that involve the government can’t be discharged, nor can backpay from domestic situations like divorce.
Some of the debts that aren’t covered by bankruptcy include:
- Student loans
- Spousal and child support
- Some income tax
Types of debt that can be discharged include:
- Medical bills
- Some personal loans
- Credit card debt/unsecured loans
Just like no one’s financial situation is the same, no bankruptcy case in Corona, CA is the same as another.
Because everyone’s situation is unique, it’s important to be clear about all your debts and even bills you expect not to be able to pay. The stigma around bankruptcy can make some people apprehensive and cause others not to be as forthright as necessary.
Any income not listed in the bankruptcy can’t be eliminated or restructured, so being clear about your assets and debts as you begin the process can ensure you get the most optimal outcome from bankruptcy.
Bankruptcy laws in California have changed drastically over the past few decades, and unfortunately, this means qualifying for bankruptcy is more challenging. For instance, if you file your paperwork improperly or fail to attend credit counseling, you could be denied bankruptcy entirely. In this case, you could lose many of your assets and still be required to pay your debt on your own.
If you believe filing for bankruptcy could help you eliminate or reduce your debt, contact our firm to see how we can help.
One qualification for bankruptcy is your income. If your monthly income exceeds the state median, which is roughly $103,000 for four-person households, you must go through a means test. A means test requires you to input your financial information and calculate if your Chapter 7 filing is considered “presumptively abusive.”
To avoid being considered presumptively abusive, you must show special circumstances that require additional expenses or changes to your monthly income. If you can’t accomplish this, your case may convert to a Chapter 13 filing.
Bankruptcy laws in California change frequently, and many debtors do not know if they can qualify for bankruptcy in the first place.
No attorney charges the same, and the type of bankruptcy you file matters to the cost as well. Chapter 7 bankruptcy generally costs less than Chapter 13. For instance, a Chapter 7 attorney could charge around $1,500 to $2,000, whereas a Chapter 13 attorney may charge $3,000 to $5,000.