Bankruptcy Law | Chapter 7

A Chapter 7 bankruptcy is a personal bankruptcy that allows you to wipe out your debts and start over financially. It is typically referred to as a liquidation bankruptcy because any non-exempt assets will be collected and sold by the trustee. The proceeds of any trustee sale will go to your creditors. 

Although a Chapter 7 will allow you wipe out most debts including credit cards, medical bills, personal loans, and lawsuit judgments, there are some debts that cannot be cleared through bankruptcy. These debts include but are not limited to alimony, child support, certain taxes, fraudulent debts, and student loans. 

Filing for a Chapter 7 personal bankruptcy doesn't mean that you will lose all your property. You may keep any personal property including cars, jewelry, and furniture provided that you are within the California property exemption limits. 

Business owners may also file a Chapter 7 bankruptcy for themselves personally or on behalf of their businesses. Sole proprietors can often file one bankruptcy to wipe out both personal and business debts. Business assets can be protected under certain exemptions which allows business operations to continue despite the bankruptcy. 

For other business entities such as partnerships, LLCs, and corporations, a Chapter 7 bankruptcy provides an easy way to liquidate and shut down the business. Since business assets cannot be protected in a business bankruptcy for these entities, the bankruptcy trustee will be in charge of selling off the business's assets and using the proceeds to repay creditors. 

If you are currently buried under a mound of debt and are considering bankruptcy, contact the Law Offices of Lucy Zheng for a consultation and case evaluation. We can advise and help you file a Chapter 7 bankruptcy so that you can have a clean slate and fresh start to your financial status.