What is ‘secured’ debt?

What is ‘secured’ debt?

A “secured” debt is a debt where you have pledged property (also known as “collateral”) to ensure your payment of the debt. In other words, if you are unable to pay the debt, the lender can take the collateral and have the collateral sold to generate funds to pay the...
What are Exempt Assets?

What are Exempt Assets?

Exempt assets are assets the person filing for bankruptcy can shield from creditors and the bankruptcy estate. In other words, they are untouchable assets and yours to keep post-bankruptcy. In California, individuals are allowed to claim their home or a portion of...
What is the Chapter 7 Means Test?

What is the Chapter 7 Means Test?

The Chapter 7 Means Test is a qualifying test that a debtor must pass to be eligible to file a Chapter 7 bankruptcy. Most Chapter 7 debtors pass and are eligible for Chapter 7 relief. Note that there is a similar test for Chapter 13 bankruptcy. The bankruptcy means...
What Does the Automatic Stay Stop?

What Does the Automatic Stay Stop?

Generally speaking, the automatic stay stops foreclosures, repossessions, lawsuits, wage garnishments, and tax levies. It does not stop criminal proceedings or legal actions against you for support (such as paternity testing or child support). Automatic stay. In...
What is the Bankruptcy Automatic Stay?

What is the Bankruptcy Automatic Stay?

The bankruptcy automatic stay is one of the first protections offered to those who file for bankruptcy. In most situations, the automatic stay takes effect as soon as the initial paperwork in a bankruptcy case has been filed. Once activated, it protects debtors from...
Can a Business File for Chapter 7?

Can a Business File for Chapter 7?

Yes. Businesses can also file for Chapter 7 bankruptcy relief. A corporation does not receive a discharge but the business can shut down, turn over its records to a bankruptcy trustee and not have to deal with creditors, pending lawsuits, or collection actions. A...