Personal Bankruptcy Attorneys in San Mateo, California

The idea of declaring personal bankruptcy often comes with a wave of anxiety and a sense of failure. However, the reality is far different from these fears. Personal bankruptcy is a lifeline designed to offer individuals and families a chance for a financial reset. It enables those drowning in debt to restart their financial journey without the insurmountable burden of previous financial missteps. 

Personal bankruptcy under federal and state laws provides a structured path to regain financial stability. There are different types of personal bankruptcy filings available, the most common being Chapter 7 and Chapter 13. Each type offers specific protections and has unique eligibility requirements, ensuring that varied financial situations can be aptly addressed. 

At EH Law Group, our California personal bankruptcy attorneys understand the emotional and financial turmoil that leads to considering this option. With over three decades of combined experience, our attorneys have helped countless individuals in San Mateo, California, and surrounding areas reclaim their financial lives.

We will help you through the bankruptcy process, protecting your rights and helping you feel confident that once the process is complete, you're ready to rebuild your life the way you want. 

Our offices also extend services to San Francisco, South San Francisco, Oakland, Daly City, and Santa Clara County, offering accessible and comprehensive legal support in personal bankruptcy cases. 

What Is Personal Bankruptcy?

Personal bankruptcy allows individuals and families to either discharge or reorganize their debts under the protection of the U.S. bankruptcy court. The two most common forms are Chapter 7 and Chapter 13, and additional ways we can support you surrounding personal bankruptcy include foreclosure, repossession, or wage garnishment. 

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is often referred to as "liquidation" because it involves selling your non-exempt assets to pay off your debts. In most cases, individuals filing for Chapter 7 will have their unsecured debts (credit cards, medical bills, personal loans) discharged entirely. 

Who Qualifies for Chapter 7 Bankruptcy? 

Qualifying for Chapter 7 bankruptcy requires meeting specific eligibility criteria set forth by the U.S. Bankruptcy Code. One of the primary requirements is passing the means test, which evaluates your income, expenses, and family size to determine whether you have the financial capacity to repay a portion of your debts. The means test compares your monthly income against the median income for a family of your size in your state. If your income is below the median, you generally qualify for Chapter 7. If your income exceeds the median, you may still qualify, but the means test becomes more complex as it assesses your disposable income. 

Additionally, individuals seeking relief under Chapter 7 must provide a detailed account of their financial situation, including all income, expenses, assets, and debts. This transparency ensures the bankruptcy court can make an informed decision about your case. It's important to note that certain debts, like student loans, child support, and tax debts, are typically not dischargeable under Chapter 7. 

A prior bankruptcy discharge within the last 8 years may also affect your eligibility. Lastly, to file for Chapter 7 bankruptcy, individuals must complete a credit counseling course from an approved provider within 180 days before filing. This course aims to educate debtors on financial management and the alternatives to filing for bankruptcy. 

By meeting these qualifications, Chapter 7 bankruptcy can provide a fresh start for those overwhelmed by unsecured debts, allowing them to rebuild their financial lives free from the pressures of previous obligations. 

Chapter 13 Bankruptcy 

Chapter 13 bankruptcy, also known as a "wage earner's plan," offers individuals with a regular income an opportunity to reorganize their debts into a manageable repayment plan, typically lasting three to five years. Unlike Chapter 7, Chapter 13 allows you to keep your property, including non-exempt assets, while catching up on overdue payments. 

Who Qualifies for Chapter 13 Bankruptcy? 

To qualify for Chapter 13 bankruptcy, you must have a stable income sufficient to meet your repayment obligations. Additionally, there are limits to the amount of debt you can have to be eligible. As of the current federal law, the total of your secured debts (like mortgages and car loans) and your unsecured debts (like credit cards and medical bills) must be less than $2,750,000 as of the date of filing for bankruptcy relief. 

Foreclosure 

Foreclosure is the legal process through which a lender attempts to recover the balance owed on a defaulted loan by selling the mortgaged property. If you are behind on mortgage payments, filing for bankruptcy can temporarily halt the foreclosure process due to the automatic stay provision, which prevents creditors from taking collection actions during bankruptcy proceedings. 

Wage Garnishment 

Wage garnishment occurs when a court orders a portion of your earnings to be withheld by your employer and directly sent to your creditor to repay a debt. Bankruptcy can stop wage garnishment through the automatic stay, providing immediate relief from this form of debt collection. 

Repossession 

Repossession refers to a creditor reclaiming property, typically a vehicle, when you default on a loan. If you are at risk of repossession, filing for bankruptcy can offer protection through the automatic stay, temporarily halting repossession efforts and providing an opportunity to negotiate repayment terms through a Chapter 13 bankruptcy plan. 

Protections and Exemptions

California provides several exemptions to protect your assets in a personal bankruptcy filing. These include: 

• Homestead exemption: Protects equity in your home. 

• Vehicle exemption: Protects equity in your car. 

• Personal property: Protects personal belongings such as household items and clothing. 

• Retirement and pension funds: Exempts retirement accounts from liquidation. 

• Public benefits: Income from Social Security, disability, and other public benefits are protected. 

When to Consider Personal Bankruptcy

Personal bankruptcy is a viable option if you're overwhelmed by debts and unable to meet financial obligations despite your best efforts. It may be the right step if you face mounting unsecured debts such as credit card bills, medical expenses, or personal loans while trying to maintain payments on secured debts like your mortgage or car loan.