Did you know California has two different systems of exemption, and that you have to claim one of them? Did you know you can keep property sometimes valued over $100,000 after filing for bankruptcy?
Filing Chapter 7 or Chapter 13 bankruptcy should be helpful instead of stressful. Hiring bankruptcy attorneys in California is one of the first choices you need to make. You can keep the items you've spent your life with.
If you need to file Chapter 7 or Chapter 13 bankruptcy, this article highlights important notes on the laws of exemptions. But first let's go over the advantages of filing bankruptcy in the state of California.
Chapter 7 Bankruptcy Advantages
You get a fresh start with this liquidation proceeding. Your debts are in essence canceled, though your bank trustee will able to sell certain non-exempt property. It costs $335 to file for Chapter 7 bankrupty in California. You should also hire experienced bankruptcy attorneys with your best interests in mind.
Chapter 13 Bankruptcy Advantages
More bankruptcy filings are now turned from Chapter 7 to Chapter 13 bankruptcy because of new laws and regulations by the government. Bankruptcy attorneys can make sure you get the filing you want, because there are some key differences between Chapter 7 and Chapter 13. Namely, you're buying yourself time with Chapter 13 bankruptcy in California: you're getting 3-5 years to pay back debts. No debt is discharged, but technically you can keep your property and pay back debtors in monthly installments.
What's Exempt Property?
Exempt property is property which cannot be taken away after you file bankruptcy. Different states have different laws for exemptions and the value of what you can keep.
Nonexempt property, on the other hand, must be turned over to the trustee in Chapter 7 bankruptcy who then will sell the property to pay back debtors. In Chapter 13, you can avoid losing properties, but you cannot have debts eliminated completely. This means debtors still have the right to take back nonexempt property if you fail to pay.
What Property Can I Keep After Filing Bankruptcy?
First, by filing Chapter 7 or Chapter 13 you are in danger of losing certain property. The good news is, if you fail to pay back certain debts, you can make an arrangement with the trustee to buy it back. If you lost your job, are unable to pay back a car loan, and lose the car, usually you can agree to buy it back from the trustee when you get more money or a new job.
In Chapter 13 bankruptcy, you can technically keep all your property. However, failing to pay back debtors means you can lose nonexempt possessions.
For example, according to California law, property you occupy as a single person can be valued at $50,000 or lower and be exempt. If you have a family, the number is $75,000. If you are 65 or older, physically disabled, or mentally disabled, the number is $100,000.
There are many other exempt items which can truly make filing bankruptcy less stressful. It's wise to go over what you own and what you owe with bankruptcy attorneys who have experience in handling cases like yours.