Are there different types of Chapter 7 Bankruptcy?

Yes, there are different types of Chapter 7 Bankruptcy in California. Chapter 7 bankruptcy is designed for individuals and businesses to obtain relief from their debts and start fresh. It involves liquidating assets to pay creditors and then discharging any remaining debt. In California, the two most common types of Chapter 7 bankruptcy are a “no-asset” case, and an “asset” case. In a “no-asset” case, the debtor does not have any nonexempt assets that can be sold to pay creditors. As a result, creditors generally do not receive any payments. However, the debtor may still be eligible to have most or all of their debt discharged. An “asset” case is when the debtor has nonexempt assets that can be sold to pay creditors. The court will use the proceeds from the sales of these assets to pay the creditors a portion of what is owed to them. Any remaining balance will then be discharged. In some cases, individuals may also qualify for a “wage earner” Chapter 7 bankruptcy. This is a special type of Chapter 7 only available to individuals with low incomes that have sufficient disposable income to make monthly payments to creditors for three to five years through a court-supervised repayment plan. Overall, Chapter 7 Bankruptcy is a helpful tool for those with unmanageable debt in California. Depending on the situation, individuals may be able to choose between a “no-asset” case, an “asset” case, or even a “wage earner” option in order to get their finances back in order.

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Are there different types of Chapter 7 Bankruptcy?

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