Those who are looking for debt relief in California may be interested in filing for Chapter 7 bankruptcy. However, debtors who have already done so in the past eight years may not be allowed to file. Furthermore, individuals who have filed for Chapter 13 bankruptcy within the last six years may not be able to file for relief through a Chapter 7 proceeding. If a case has been rejected by a bankruptcy court, other filing restrictions could apply.
If a person has not filed for Chapter 7 bankruptcy over the past six to eight years, they could file again after passing a means test. The means test compares a person’s income to the median in the jurisdiction where the case is being heard. In some cases, an individual will be able to ask for bankruptcy protection without having to pass the test.
The means test may be necessary in cases involving debtors who convert a Chapter 13 case to a Chapter 7 case. If a case is converted, a debtor will need to pay a conversion fee in addition to any other required fees. Regardless of why a person files for Chapter 7 protection, they may have to liquidate assets to repay creditors. If any balances remain, they will most likely be discharged.
There may be many benefits to filing for Chapter 7 bankruptcy. For instance, an individual could potentially have debts discharged within a few weeks or months. A creditor may not be able to call or otherwise contact a debtor while a case is ongoing. In some cases, an individual can get medical or credit card debts discharged without paying anything to creditors. An attorney may explain the process of filing for a liquidation bankruptcy.