Legal Question in Bankruptcy in California

Chapter 7 or debt settlement? Our first income appears to be stable, but our second income, self-employment, has gone down by 60% this past year and even that's not certain. We just got through with a home loan modification, but we have $30,000 in credit card debt. Our current expenses are now minus $600 each month without the cc pymt. We are one month behind in cc pymts. My concern is that both our cars are paid off and we have approximately $20,000 in savings, but being self-employed, I can't see using our savings to pay off the cc debt when they will more than likely cancel the cards anyway. I don't want to loose the house we've struggled to save. We've taken the BK Means test and we qualify. If we do a BK, will they take one or both cars and also our savings?


Asked on 10/12/09, 6:12 pm

1 Answer from Attorneys
Robert Mccoy Law Office Of Robert McCoy

You should be able to file banruptcy and keep both of your cars. Depending on your situation, you may need to file a Chapter 13 instead of a Chapter 7, even if you "qualify" for a Chapter 7. Generally, a family is entitled to about $21,000 in a wild card exemption as well as a small exemption in motor vehcles. Also, if you have a business with a lease and employees and inventory, you may have to file a Chapter 13 if you want to keep your business open.

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Answered on 10/12/09, 6:44 pm


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