Understanding San Bernardino Chapter 7 Bankruptcy

New bankruptcy laws have made filing for a San Bernardino Chapter 7 bankruptcy more difficult for some, but not for those who are in most need of the help that filing for bankruptcy can provide. The law requires that those who wish to file for Chapter 7 bankruptcy meet certain conditions with regards to income and inability to pay creditors. The test is twofold: 

1.       Test to determine your income level. Your income will be measured against median income in the state – if you make less than the average resident of California, then you may be able to file for Chapter 7.

2.       Test to determine disposable income. Your disposable income will be calculated by a set formula of expenses to income. If you are unable to pay off 25% of debts that the court considers to be non-priority, unsecured debt, then you may be able to file for Chapter 7. 

If you meet both of the above criteria, chances are good that you will be approved for a SB Chapter 7 bankruptcy. However, if your income level is too high, or the courts determine that given your expenses, you would be able to pay back at least 25% of your non-priority, unsecured debt, you will instead have to file for Chapter 13, if you want bankruptcy relief. 

A San Bernardino Chapter 7 bankruptcy is a good choice for individuals who have a lot of unsecured debt, and very little in terms of assets. There are certain types of debts that cannot be discharged under Chapter 7, namely, child support, governmental taxes, student loans, and monies owed due to criminal charges/convictions. If your debt consists largely of these types of obligations, Chapter 7 may not be your best option.  

If you are considering filing for Chapter 7 bankruptcy but don’t know where to begin, let our team of experienced San Bernardino County Bankruptcy Attorneys help you to fully understand how the law applies in your particular situation so that you can decide if Chapter 7 is right for you. Our team of reliable, professional San Bernardino County Bankruptcy Attorneys is here to help you take advantage of the financial relief you are entitled to under the law. Don’t wait until you’re so overwhelmed that it all seems hopeless – talk to us today and let us work towards your peace of mind and financial freedom.