General Principles of Chapter 7

     Chapter 7 is the most common form of bankruptcy; and is what most people believe bankrutpcy to be. 

     The basic concept is that all of your property is turned over to a Bankruptcy Trustee; hired by the US Government; who will administer the banruptcy estate.  Basically this means that your non-exempt property will be sold and the money used to pay any liens on the property, administrative costs, and then unsecured creditors.

     Fortunately, your exempt assets aren't taken and sold. Often that includes your home and a car or two.

     Exemptions vary from State to State. In California, those exemptions come in two groups and you get to pick which group you want to use.  The first group includies a homestead  exemption and another for cars.  The other exemptions include a general exemption of about $28,000 for everything. Choosing the right exemptions can be critical to keeping as much property as you can.  Fortunately, you can, under almost all circumstances, amend your exemption list when necessary.

   The Process:

       First of all, meet with a competent, experienced bankruptcy attorney. Most of the time, those first appointments are free and will allow you to get a lot of quick answers about your specific case; meet the attorney and develop a rapport with him or her; and understand the next steps, timing of the process, and total costs.

      Often at the first meeting the attorney will provide you with some forms to fill out; listing your assets and debts and providing some general information about your case. You will also learn about the cost, when it is due and how you can pay it.