When thinking about bankruptcy, most people fear the prospect of losing their home, car, and other important property. However, bankruptcy does not mean losing everything you have, because important exemptions may apply. Understanding how state bankruptcy law works and how it applies to personal assets can reduce your anxiety and help you move forward with confidence.
State law provides a set of bankruptcy exemptions that can protect a person’s home, vehicles, retirement accounts, and more. Our experienced bankruptcy team at the Law Offices of Steven Ibarra can help you understand the process and protect what’s most important as you navigate bankruptcy exemptions in Whittier. Contact us today to schedule a consultation.
There are two main types of bankruptcy filings available in California for individual filers. Each bankruptcy type follows its own set of rules and carries certain exemptions for property in Whittier.
Chapter 7 Bankruptcy, also known as “liquidation bankruptcy”, is common among individuals seeking to get out of personal debt. Chapter 7 involves the sale of non-exempt assets by a bankruptcy trustee. The trustee then transfers the debtor’s liquidated assets to creditors, in order of priority. The idea of “liquidation” bankruptcy is frightening to those entering bankruptcy because it implies that all assets must go. However, Chapter 7 includes key exemptions to personal property that can allow the petitioner to retain many of their important assets.
Chapter 13 Bankruptcy, also known as “reorganization bankruptcy”, allows people to keep their property while they pay off debts under a payment plan. The payment plan set in a Chapter 13 bankruptcy must be court-approved and sets a 3-5 year timeline for repayment in most cases. This approach is often preferable to liquidation if individuals can afford to make monthly payments. Within Chapter 13 bankruptcy, important exemptions also apply to homes and personal property.
California requires residents filing bankruptcy to use state exemptions instead of federal exemptions. Files must choose between two exclusive exemption systems.
This series, named for California Code of Civil Procedure § 704, allows filers to protect higher amounts of home equity, but can offer less flexibility elsewhere. Key features under this system include:
During an initial consultation, your bankruptcy attorney can further explain possible exemptions under this system.
This series is preferable for renters and those without home equity. 703 includes a “wildcard” exemption that can be used for any type of property–even cash and other personal items. Features of this system include:
State law allows flexibility so bankruptcy filers can seek relief without sacrificing everything they own. A skilled Whittier bankruptcy attorney can review your finances and help you determine the options and exemptions that are best for you.
If you are considering bankruptcy, you need to understand bankruptcy exemptions in Whittier and how they can help you. Contact an experienced bankruptcy attorney at the Law Offices of Steven Ibarra to learn more about your options and how to move forward. We look forward to helping you.
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