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Chapter
Seven
Chapter Seven gets rid of
debt EXCEPT for the following
- Most taxes
- Fradulent Debt
- Child and Spousal Support
- Intentional Harm
- Fines
- Most student loans
- Drunk driving injury
- Criminal restitution
Disadvantages of Chapter
7
- A secured creditor retains its lien. Example - Car creditor
will repossess car after bankruptcy if debtor stops paying loan.
- Chapter 7 case can only be filed every eight years. A
Chapter 13 can be filed every two years or four years after
a chapter 7.
California Exempt Property
There are two sets of property exempt from Bankruptcy
Trustee in a Chapter Seven case.
Set One
- A "wild card" of $20,725.00 in
any type of property including excess beyond following
exemptions and equity in residence.
- Motor vehicle - $3,300.00
- Household goods and wearing apparel.
- Jewelry - $1,350.00
- Tools of trade - $2,075.00
- Unmatured life insurance.
- Cash value life insurance - $11,075.00
- Social Security, unemployment and public
assistance benefits, Veterans' benefits and disability
benefits.
- Alimony and child support.
- Retirement plans.
- Personal injury and wrongful death cases.
Set Two
- Motor vehicles - $2,550.00
- Household goods and wearing apparel.
- Tools of trade - $6,750.00 for one and
$13,475.00 if both husband and wife in business.
- $10,775.00 in cash value life insurance
and $21,550.00 if married.
- Retirement plans
- Unemployment and disability benefits.
- Personal injury and wrongful death cases.
- Workers compensation claims.
- Equity in residence $50,000.00 - $150,000.00
- Jewelry - $6,750.00
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