Chapter 7 bankruptcy is also known as total bankruptcy or liquidation bankruptcy. Since Congress added the 2005 amendments, there are a few hurdles a debtor must qualify to file a Chapter 7 bankruptcy. A debtor must pass the “means test” based on their average monthly income six months prior to filing. A debtor must also take two approved credit counseling classes in order to receive a pre-filing bankruptcy certificate and a post-filing bankruptcy certificate. Although filing a Chapter 7 bankruptcy will generally wipe out all of your unsecured debt, Debtors may use exemptions to protect their assets from being liquidated by the Bankruptcy Trustee. It is important to find a competent, experienced attorney who is familiar with the allowed state and federal exemptions so he/she can best protect your assets.
Corporations and Limited liability companies may also choose to file a Chapter 7 bankruptcy when they are ready to shut the doors and liquidate the business. Although, corporations cannot get a discharge, filing a bankruptcy will put an end to expensive litigation.
We understand that deciding to file for bankruptcy can be a very difficult decision. You should not have to face it alone. At the Lensky Law Firm, we will provide you with a free initial consultation with one of our caring and knowledgeable attorneys. During your consultation we will discuss your options and help you work out a solid course of action. Call the Lensky Law Firm in Los Angeles, California at 310-277-1717 for help today.