California Chapter 7 Bankruptcy Lawyer
Chapter 7 does not mean you hand over your house, your car, and everything you own. For most California filers, the opposite is true: the process wipes out qualifying debt while state exemption law keeps the property that matters. Wadhwani & Shanfeld is a consumer bankruptcy and debt relief law firm that handles Chapter 7 cases for individuals and families across Los Angeles, Orange, Riverside, and San Bernardino Counties, and a California Chapter 7 bankruptcy lawyer from our firm will tell you plainly whether this chapter fits your situation.
The real work in a Chapter 7 case happens before anything is filed. California is one of the states that rejects the federal exemption list and makes you pick between two state systems. That choice, made once and locked in for the whole case, decides what you keep. Add the means test, the 730-day residency rule, and the timing of lawsuits, garnishments, and foreclosure notices, and a Chapter 7 filing becomes a series of decisions that are hard to undo.
We review your income, debts, and property first, then tell you whether Chapter 7, Chapter 13, or a settlement outside of court is the better path.
Why Choose Wadhwani & Shanfeld for Your Chapter 7 Filing
Raj Wadhwani, a Southwestern Law School graduate and founding shareholder, helped pilot the Best Case Bankruptcy software in 1998 and was the first attorney to file a bankruptcy case electronically in the Central District of California. Greg Shanfeld, a founding shareholder and University of Southern California law graduate, has handled more than 10,000 bankruptcy cases over three decades. Together the firm carries more than 90 years of combined legal experience.
Those credentials matter in Chapter 7 because the cases turn on details: which exemption system protects your equity, how to document income for the means test, and what to do when a creditor or trustee questions your filing. The firm files in every division of the U.S. Bankruptcy Court for the Central District of California, so the court that hears your case is one our attorneys already work in.
You speak with an attorney from your first call, and the consultation is free. When a garnishment, foreclosure sale, or repossession is days away, the firm moves fast. Cases can be handled entirely by phone, email, video, and online chat, and 100% virtual consultations are available for clients anywhere in our Southern California service area.
Debts and Situations That Lead to a Chapter 7 Filing
- Credit Card Debt: Unsecured card balances are among the most commonly discharged debts, including accounts already sent to collection firms or reduced to judgment suits.
- Medical Bills: Unpaid hospital and provider balances are unsecured and generally dischargeable, which makes Chapter 7 a common answer after a serious illness or injury.
- Personal and Payday Loans: Installment loans, online lenders, and payday loans can be wiped out, often ending the cycle of rolling one loan into the next.
- Repossession and Foreclosure Deficiencies: When a car or home is sold for less than the loan balance, the leftover balance is unsecured and can be discharged.
- Older Income Tax Debt: Some income taxes qualify for discharge if they meet specific timing rules, which we check against your return history before filing.
- Wage Garnishment: A judgment creditor can take a portion of each paycheck, and filing Chapter 7 stops most garnishments the moment the case is filed.
- Creditor Lawsuits and Judgments: A suit from a collection firm or a judgment already entered can be halted and, in many cases, eliminated through the bankruptcy.
- Small Business Debt: Owners of failed businesses often carry personal guarantees and credit lines that Chapter 7 can erase, and the firm handles small business bankruptcy and business debt solutions.
What to Do Right Now if Collections, a Lawsuit, or a Sale Date Is Pressing
Start by sorting your paperwork by urgency. A summons and complaint comes first, because the response deadline runs from the date you were served. Next come any notice of default, notice of sale, repossession notice, or garnishment order. Then gather the rest: recent pay stubs, tax returns, bank statements, a list of your debts, and records of what you own.
Do not ignore a lawsuit. An expired statute of limitations is a defense that you must raise in a written answer; if you say nothing, the court can still enter judgment against you. For written contract and book account debt the limit is four years, and for oral contracts it is two. A payment on a debt that is already time-barred does not bring it back to life, but a signed written acknowledgment can restart the clock, so be careful what you sign.
If a foreclosure is underway, timing is the whole game. California law requires a sale date at least three months and 20 days after the notice of default is recorded, and the notice of sale must be mailed and posted at least 20 days before the sale. Reinstatement of a monetary default is allowed until five business days before the sale. Filing bankruptcy halts the sale immediately, so call before that window closes.
Repossession has its own clock. A lender must give at least 15 days’ written notice before disposing of a repossessed vehicle, or 20 days if mailed from or to an address outside California. A borrower can ask in writing for a 10-day extension of the redemption period. A deficiency is owed only if the notice went out within 60 days of repossession and contained the required items, which gives us something to check in every car loan case.
Watch your bank account too. California automatically shields a set amount in a deposit account from a levy by a judgment creditor, without a claim of exemption, but that protection does not cover levies for wages owed to others, child or spousal support, or debts owed to the state. Money kept in an account that a creditor is targeting is at risk, so talk to us before making large moves with your cash.
Where you file depends on your home zip code, not the court nearest your office or your creditor. The Central District of California bankruptcy court covers Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, Ventura, and San Luis Obispo Counties. Most of Los Angeles County files in the Los Angeles Division in downtown Los Angeles. San Fernando Valley communities such as Sherman Oaks, Van Nuys, Encino, Woodland Hills, Northridge, and Reseda file in the San Fernando Valley Division in Woodland Hills. Riverside and San Bernardino County residents file in the Riverside Division, and Orange County residents file in the Santa Ana Division. Lancaster, Palmdale, and Santa Clarita are on the Valley division’s list with footnotes, so we confirm the zip code with the court’s locator tool before assigning a division. One practical wrinkle: Simi Valley, Thousand Oaks, Westlake Village, Newbury Park, and Malibu fall under the Northern Division even where the zip code sits in Los Angeles County.
Keeping Your Home, Car, and Savings Through California’s Exemption Systems
California has opted out of the federal exemptions. You choose one of two state systems for the entire case: the standard exemption scheme under CCP section 704, or the alternative under section 703.140(b). You cannot mix and match, and the choice cannot be changed after filing. You must also have lived in California for at least 730 days to use the state’s exemptions at all.
The 704 system is generally built around homeowners. Its homestead exemption is the greater of the prior-year countywide median single-family home price, up to a ceiling, or a statutory floor, and both numbers adjust each year for inflation. In high-priced counties that can protect substantial equity. The 703.140(b) system is more modest on the home but offers a wildcard amount that can be applied to any property, plus unused residence exemption, which often suits renters or people with little equity. The dollar amounts in both systems are adjusted on a schedule, so we apply the current figures when we run your numbers.
Most of our clients keep everything they own. The attorney’s job is to work through each asset, match it to an exemption, and pick the system that covers the most. A car with a loan balance near its value, a home with modest equity, tools of the trade, and retirement accounts usually fall within protection. Where equity exceeds what the exemptions cover, we will tell you before you file and discuss whether Chapter 13 keeps the asset safer.
Qualifying for Chapter 7: The Means Test and What It Wipes Out
Chapter 7 is designed for people who cannot repay their debts from income. The means test compares your household income to the California median for a household of your size, then, if you are above it, accounts for your actual allowed expenses. Pass, and you qualify. If your income is too high, Chapter 13 is usually the alternative, since it reorganizes debt into a payment plan over three to five years.
Most Chapter 7 cases are completed in roughly four months. Once you file, the automatic stay halts lawsuits, judgments, bank levies, wage garnishments, repossessions, and foreclosure proceedings. A trustee reviews your paperwork, you attend a meeting of creditors, and the court enters a discharge that eliminates qualifying debt.
Not everything goes away. Child support, alimony, most student loans, most government fines, and debts from injuries caused by drunk driving generally survive. Prior filings also matter: you must wait 8 years between Chapter 7 cases, 4 years to file Chapter 13 after a Chapter 7, 2 years between Chapter 13 filings, and generally 6 years to file Chapter 7 after a Chapter 13, though that last period can shorten if the earlier plan paid enough to unsecured creditors.
California Chapter 7 Bankruptcy Questions We Hear Most
How fast does Chapter 7 stop a wage garnishment?
The automatic stay takes effect when the petition is filed, and creditors must stop collection activity, including most garnishments. Your employer then needs to stop withholding, and we help make sure that happens.
Will I lose my house in Chapter 7?
Most clients keep their homes. The question is whether your equity falls within California’s homestead exemption and whether you are current on the mortgage. If you have more equity than the exemption covers, or you are behind on payments, Chapter 13 may be the better route.
What debts can Chapter 7 eliminate?
Credit cards, medical bills, personal loans, payday loans, and deficiency balances after a repossession or foreclosure are the usual ones. Some older income taxes also qualify. Most student loans, child support, and alimony do not.
What is the means test and who has to pass it?
It is the income screen for Chapter 7. Your household income is compared to the California median for your household size, and if you are above it, your allowed expenses are factored in. Passing it makes you eligible for Chapter 7.
How long does a Chapter 7 case take?
Most are finished in about four months from filing to discharge, though a contested issue or a trustee inquiry can lengthen the process.
How long does Chapter 7 stay on my credit report?
Up to 10 years from the filing date. Its effect on your score fades well before that, and many clients see recovery begin within the first year with a secured card and on-time payments.
Does a debt collector’s lawsuit still matter if the debt is old?
Yes. The expired limitations period is a defense, but you have to raise it in a written answer. If you ignore the suit, a judgment can be entered anyway, and a California money judgment can be enforced for 10 years and renewed.
Can a judgment be renewed after 10 years?
Generally yes, by filing a renewal application. But for medical expense judgments with unpaid principal under $200,000 and personal debt judgments under $50,000, California now limits renewal to one time, for five years only.
Can my employer fire me for a garnishment or a bankruptcy?
An employer cannot fire you because your wages are garnished for a single judgment, and state and federal law bar termination solely because you filed for bankruptcy.
What if a collector broke the law while pursuing me?
California’s Rosenthal Act covers original creditors as well as third-party collectors. A consumer can recover actual damages and, for willful and knowing violations, an additional $100 to $1,000, plus attorney fees. The suit must be filed within one year, so raise any violation with us early.
Is it worth hiring a lawyer if I just want the forms filed?
A petition preparer can type information into forms but cannot give legal advice, choose exemptions, or represent you if a trustee or creditor objects. Errors can cost you property or your discharge, which is why we handle the filing ourselves.
Do I have to come into an office?
No. We handle cases entirely by phone, email, video, and online chat, and virtual consultations are available throughout our service area.
Chapter 7 Representation Across Los Angeles, Orange, Riverside, and San Bernardino Counties
We start with Los Angeles County, where clients come to us from Los Angeles, Hollywood, Santa Monica, Inglewood, Compton, Torrance, Long Beach, Lakewood, Gardena, Bellflower, Paramount, Norwalk, Cerritos, Signal Hill, and Huntington Park. In the San Fernando Valley, we represent filers in Sherman Oaks, Van Nuys, Encino, Woodland Hills, Reseda, Northridge, Granada Hills, North Hollywood, North Hills, Mission Hills, San Fernando, and Sylmar, along with Santa Clarita. Further north, we serve the Antelope Valley communities of Lancaster, Palmdale, and Acton.
In the eastern San Gabriel Valley and Inland Empire, our clients live in Pomona, Claremont, Glendora, West Covina, Montclair, Chino, Chino Hills, Ontario, Upland, Rancho Cucamonga, Fontana, and San Bernardino, as well as Riverside and the Coachella Valley.
Across Orange County, we help people in Anaheim, Santa Ana, Garden Grove, Buena Park, Fullerton, Huntington Beach, Westminster, Costa Mesa, Newport Beach, Tustin, La Habra, Placentia, Cypress, Mission Viejo, and Laguna Niguel. Wherever you live, your zip code determines which division of the bankruptcy court takes your case, and we handle the filing in all of them.
Speak With a California Chapter 7 Bankruptcy Attorney
If calls, letters, a lawsuit, or a sale date are closing in, talk to a California Chapter 7 bankruptcy attorney before the next deadline passes. Wadhwani & Shanfeld offers a free consultation, direct access to an attorney from your first call, and honest advice about whether Chapter 7, Chapter 13, or a settlement fits your finances. Call today, or schedule a virtual consultation that fits your day.
