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Chapter 7

Chapter 7 Bankruptcy Overview


In Chapter 7, a business or individual debtor obtains a discharge of all debts. A discharge is a court order releasing the debtor from his or her debts. In other words, the debt is wiped out and the debtor no longer owes the creditor any money.  A Bankruptcy Trustee [appointed by the court] administers the case and determines if the debtor has assets to pay creditors or if the debtor has no assets to pay creditors.


In general, you may keep your home, personal items, household goods, bank accounts, jewelry, and car in Chapter 7 bankruptcy. You may also keep your employee pension plans, 401k, and IRA when filing for Chapter 7. An individual debtor may also keep between $50,000.00 and $150,000.00 in equity in that person’s home based upon certain circumstances.

An individual debtor or a business debtor operating as a sole proprietor usually does not have assets that the trustee liquidates because they are “exempt” under state law, California exemption statutes.

The trustee in charge of your bankruptcy case will sell off your assets which are not exempt. The tabulation of your exemptions obviously should be made prior to bankruptcy filing by an attorney capable of applying the California exemptions to your assets. This is an integral part of the bankruptcy planning process.

If you make a mistake in tabulating your California exemptions, you may lose your residence, car, bank accounts, etc.

A Chapter 7 debtor’s discharge will be denied if the debtor received a Chapter 7 or 11 discharge in a previous case filed within 8 years of the current case.


The new bankruptcy law imposes the additional requirement that you must now obtain a briefing from an approved nonprofit credit counseling agency within 180 days of your bankruptcy filing.  Read more about the New Requirements of Bankruptcy Law….

Under the new bankruptcy law, there are two levels of qualification. First, there is the “means test” (based upon gross income). The individual (and or his/her family) must not have gross income (computed for the most recent 6-month period) over the median income of the state of residence as specified in the census data.

If that individual earns more gross annual income than the census data from the state that he or she lives, then he or she cannot maintain sufficient current net monthly income (when taking into account federal and local guidelines for allowable expenses) to pay creditors a specified amount of money over five years. Read more about the “Means Test”…

As part of the bankruptcy planning process, the Law Offices of Keith F. Carr can compute the appropriate figures and give you a legal opinion as to your compliance with the new bankruptcy law. How are you going to determine your own compliance under bankruptcy law? Do you trust a paralegal to do this for you?


Attorney Keith F. Carr charges affordable bankruptcy fees when compared to other lawyers who charge a substantial premium fixed fee, $2,500 to $3,000 for a Chapter 7 case.

Attorney Keith F. Carr charges only a fraction of this premium fixed fee that other lawyers charge for a simple Chapter 7 case.

When you complete the Bankruptcy Evaluation Form, your Bankruptcy Evaluation will include a quote of attorneys fees in your case.  Your actual attorneys fees will depend on the complexity of your case and your financial situation.

Attorney Keith F. Carr prepares and guides you through the entire process.  Attorney Carr does not take shortcuts. The Chapter 7 fixed fee includes full representation in Chapter 7, including preparation of Chapter 7 petition, legal counseling on all matters in the Chapter 7 Bankruptcy, Attorney Carr’s appearance at the Meeting of Creditors with you.

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