Sacramento residents dealing with extreme credit card debt, medical bills, foreclosures, lawsuits, business losses, and a host of other credit and debt problems usually start by considering filing Chapter 7 with a Sacramento Bankruptcy Attorney.

Chapter 7 or Straight Bankruptcy is governed by Title 11 of the United States Code. Chapter 7 outlines the liquidation process under American bankruptcy law and is the most common bankruptcy filed in the country. Chapter 7 is available to both individuals and businesses alike and eliminates most of not all of your debt. This is what most people imagine when they hear the word bankruptcy.

In a Chapter 7 bankruptcy case the bankruptcy trustee takes control of the debtor’s property and liquidates any assets in order to pay the debtor’s creditors. The liquidation process is subject to specific exemptions that apply to a debtor, which are defined by state law. When property falls under one of the specific exemptions that property becomes off–limits to the trustee and is retained by the debtor. Many California exemptions apply to a person’s personal possessions, home, and vehicle.

The moment a debtor files his or her bankruptcy petition the court issues an Automatic Stay, which prevents all creditor’s from pursuing any balances owed from the debtor. This means all foreclosure sales are stopped, collections are halted, and the status quo is maintained.

Once the bankruptcy petition has been reviewed by the trustee and judge, and enough time has passed for any creditor to object to the discharge of debt, the court will order all of the debtor’s debts to be wiped out forever. After discharge, the debtor has no obligation to repay those debts; they simply disappear. The process is often completed within four months and the debtor is typically only required to attend court once. The discharge gives the debtor an economic fresh start and allows him or her to begin to rebuild his financial life again. This option, however, is only available to a debtor once every 8 years.

Please call one of our Sacramento bankruptcy attorneys today to discuss whether filing Chapter 7 is best for you.