Will I Lose Everything if I File for Bankruptcy in California?
Bankruptcy is a smart financial move for a great number of people facing debts that they cannot pay. There is a perception that bankruptcy is a failure of sorts, but bankruptcy is often the solution to move beyond a financial failure so that you can become productive again. Both Abraham Lincoln and Donald Trump filed for bankruptcy prior to becoming president, among many other successful Americans who used bankruptcy to move on to a better tomorrow.
But one of the biggest fears people have in bankruptcy is that they will “lose everything” if they file for bankruptcy. For those with few assets, that may not be that big of a deal when compared with the enormous benefit of having their entire debt wiped clean. But it is a valid concern, if a somewhat unfounded one.
What You Can Keep in a California Chapter 7 Bankruptcy
California is relatively generous in what you are able to keep during a Chapter 7 bankruptcy proceeding. Under the law, these are called exemptions. You actually have two separate options to choose from in determining what exemptions you will be entitled to, but there are basic commonalities among the options.
Speak to a bankruptcy attorney about the specifics that you can keep, and which option is best for you, but understand that you will have options to keep the following types of assets post-bankruptcy:
- Your value in a home (generally up to $75,000 for a single person and $150,000 for a family under one option)
- Your value in a motor vehicle (up to $1900 or $2775)
- Necessary appliances, tools, and clothes
- Health aids
- Certain portions of insurance benefits
- Portions of pensions, welfare benefits, social security benefits, and other forms of benefits
- A burial plot
This is a brief overview, and does not include all types of assets that you will be able to hold onto post-bankruptcy.
Keeping Your Assets With Chapter 13 Bankruptcy or Loan Modification
While a Chapter 7 bankruptcy will require you to liquidate other assets (besides the types listed above), you can also pursue bankruptcy relief through a Chapter 13 bankruptcy in California which will not require you to liquidate your assets. In a Chapter 13 proceeding, your attorney will negotiate with your creditors to reach a payment plan, which can include reduced balances, longer repayment periods, wiping out penalties, and more favorable interest rates.
An attorney can also negotiate for these same benefits through loan modification outside of the bankruptcy system altogether, helping you to preserve all your assets while reaching more favorable repayment terms.
Get on the Road to Relief With the Loan Modification and Bankruptcy Attorneys at Gastelum Law
If you are unable to pay the bills due on loans (medical, student loans, credit cards, mortgages, etc.), we may be able to help reduce your debt burden and get you and your family on the road to financial relief. At the Law Offices of Omar Gastelum and Associates, PLC, our experienced attorneys will work with you to obtain both immediate and long-term relief through loan modification and, if necessary, bankruptcy protection. Contact the Law Offices of Omar Gastelum and Associates, PLC today for a free consultation on how our attorneys can help you start building a better financial tomorrow today.