Los Angeles Chapter 7 Bankruptcy Lawyer
Chapter 7 is called liquidation, yet the vast majority of the people who file it keep everything they own. That surprises almost everyone who walks in worried about losing a car or a house. 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 Los Angeles Chapter 7 bankruptcy lawyer at the firm starts by working out what you own, what is protected, and what you owe.
The answer to “will I keep my property” rarely depends on the bankruptcy code itself. It depends on California’s exemption statutes, which differ sharply from the federal rules, and on which of two state exemption systems you choose. A careless choice can expose equity that a careful one would have protected. Two people with identical debts can reach very different outcomes based on that one decision.
The other piece is timing. Chapter 7 usually wraps up in about four months, and the protection of the automatic stay begins the moment the petition is filed. For someone with a garnishment hitting their paycheck or a creditor lawsuit with a response deadline, that immediate effect is often the whole point.
Why Choose Wadhwani & Shanfeld for Chapter 7 Bankruptcy in Los Angeles
Wadhwani & Shanfeld has helped more than 30,000 individuals and families get out from under debt, and the firm is led by two Board-Certified Specialists in Consumer Bankruptcy through the American Board of Certification. Raj Wadhwani, founding shareholder and partner, is a Southwestern Law School graduate who 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, founding shareholder and partner, earned his law degree from the University of Southern California and has handled more than 10,000 bankruptcy cases over three decades. Together the firm’s lawyers bring more than 90 years of combined legal experience to consumer bankruptcy and debt relief.
For a Chapter 7 filer, those credentials matter in concrete ways. Board certification in consumer bankruptcy is held by a small fraction of attorneys, and it reflects deep familiarity with the exact questions that decide a Chapter 7: the means test, the exemption election, and what a trustee will scrutinize. The firm files in every division of the U.S. Bankruptcy Court for the Central District of California, so your case is handled by people who know how the court operates regardless of where you live.
Clients get direct access to an attorney from the first call, a free consultation, and fast action when a garnishment, foreclosure sale, or repossession is days away. Cases can be handled entirely by phone, email, video, and online chat, with 100% virtual consultations available. The firm serves clients throughout Los Angeles County and into Orange, Riverside, and San Bernardino Counties. Because the same attorneys also handle Chapter 13, debt settlement, and loan modification, the recommendation you get is based on what fits your finances, not on the only service the firm offers.
Debts and Situations That Lead Los Angeles Residents to File Chapter 7
- Credit Card Balances: Revolving card debt is the classic unsecured debt Chapter 7 wipes out. It is especially common when a job loss or reduced hours forced someone to live on credit for months.
- Medical Bills: Unsecured hospital and provider balances are dischargeable, which matters for households hit by an illness or injury that outran their insurance.
- Personal and Payday Loans: Unsecured personal loans and payday loans can be eliminated, including the stacked borrowing people take on trying to cover earlier payments.
- Repossession Deficiencies: When a repossessed car sells for less than the loan balance, the leftover deficiency is unsecured debt that Chapter 7 can discharge.
- Collection Lawsuits and Judgments: Suits from creditors and their collection firms, and judgments already entered, can be stopped by the automatic stay and, for dischargeable debts, wiped out.
- Wage Garnishments and Bank Levies: A garnishment or levy on an account tied to a dischargeable debt stops when the case is filed, which is often what pushes people to call.
- Older Income Tax Debt: Some older income taxes can be discharged if they meet specific timing rules, though many tax debts cannot, so this needs a close look before filing.
- Small Business Debt: Owners whose business did not work out and who are personally liable for its debts often use Chapter 7 to clear them.
What to Do and Where to File if You Are Considering Chapter 7
Start by gathering your paperwork before you do anything else: recent pay stubs, tax returns, bank statements, a list of every creditor, and anything you have received from a collector or court. Do not pay one creditor in a rush or move property to a relative. Transfers and selective payments shortly before filing can be undone by a trustee and can create trouble in the case.
If you have been served with a lawsuit, the response deadline is the date that matters most. Missing it can lead to a default judgment, and a judgment opens the door to wage garnishment and bank levies. A California money judgment stays enforceable for 10 years and can be renewed, so ignoring a suit creates a long-lasting problem. Call before the deadline passes so the attorney can tell you whether to answer, negotiate, or file.
If your debts are old, check the limitations period before you assume anything. A suit on a written contract generally must be brought within four years, and on an oral contract within two. Expiration is a defense you must raise in a written answer, or a court can still enter judgment. Also, a payment on a time-barred debt does not revive it; only a signed written acknowledgment restarts the clock. These rules can change whether bankruptcy is even the right tool for a particular debt.
Where you file depends on your home address. The Central District of California bankruptcy court assigns cases to divisions by the zip code of your street address, not a P.O. box. Most of Los Angeles County falls under the Los Angeles Division, which sits in downtown Los Angeles. San Fernando Valley communities such as Encino, Northridge, Van Nuys, Reseda, Sherman Oaks, and Woodland Hills are served by the San Fernando Valley Division in Woodland Hills. Lancaster, Palmdale, and Santa Clarita appear on the Valley division’s list with footnotes, so the zip code needs to be confirmed on the court’s locator before a division is assigned. Riverside and San Bernardino County residents file in the Riverside Division, and Orange County residents in the Santa Ana Division. The firm handles all of this, so you do not have to sort it out yourself.
One more caution: if a foreclosure sale or repossession is close, tell the attorney immediately. In California a foreclosure sale cannot happen earlier than three months and 20 days after the notice of default is recorded, and a monetary default can be reinstated until five business days before the sale. A repossessed vehicle’s seller owes you at least 15 days’ written notice before disposing of it, so there are windows, but they close quickly.
The Means Test and How California’s Exemptions Decide What You Keep
Two questions determine most Chapter 7 outcomes. The first is whether you qualify. The means test compares your household income to the California median for a household of your size, then accounts for your actual allowed expenses. Income above the median does not automatically disqualify you, because the expense deductions matter. If you do not pass, Chapter 13 is often the alternative.
The second question is what you keep. California has opted out of the federal exemptions, so you must choose one of two state systems for the entire case, and you cannot mix them. One system offers a large homestead protection tied to local home prices, which usually favors homeowners with real equity. The other offers a smaller residence amount but adds a flexible wildcard that can be applied to cash, accounts, or other property, which often works better for renters or people with little home equity. There is also a residency requirement: you generally must have lived in California for at least 730 days to use these exemptions.
Beyond the homestead, the exemption systems protect vehicles up to a set equity amount, tools of the trade, household goods, and retirement accounts. Dollar amounts are adjusted on a schedule, so the attorney confirms the current numbers when preparing your case. Bank accounts have a built-in cushion as well: California automatically protects a set amount in a deposit account from levy without you filing a claim, though that protection does not apply to certain debts such as support or amounts owed to the state.
If you are behind on a mortgage or car loan, understand that Chapter 7 discharges the personal debt but does not erase a lien. You can keep the property by staying current, but if you are already behind and want to catch up over time, Chapter 13 may be the better fit.
Chapter 7 Questions Los Angeles Filers Ask
How long does a Chapter 7 case take?
Most cases are completed in roughly four months from filing to discharge. The protection of the automatic stay begins the moment the petition is filed, so collection activity stops long before the case ends.
Will I lose my house or car in Chapter 7?
Most clients keep their property. The question is whether your equity falls within California’s exemptions. If it does and you stay current on the loan, you keep it. If you have more equity than the exemption covers, or you are behind on payments, Chapter 13 may let you keep the property instead.
What debts can Chapter 7 eliminate?
Most unsecured debts, including credit cards, medical bills, personal loans, payday loans, and deficiencies after a repossession or foreclosure. Some older income taxes qualify if they meet timing rules. Child support, alimony, most student loans, most government fines, and debts from injuries caused by drunk driving generally cannot be discharged.
Can I file Chapter 7 if I filed before?
Yes, subject to waiting periods. You must wait 8 years between Chapter 7 filings. After a Chapter 13, the wait to file Chapter 7 is generally 6 years, though it can be shortened if your plan paid enough to unsecured creditors.
Will bankruptcy stop a wage garnishment?
Yes. Filing triggers the automatic stay, which halts most garnishments when the case is filed. Without bankruptcy, an ordinary judgment garnishment is capped at the lesser of 20% of weekly disposable earnings or a figure based on how far those earnings exceed 48 times the minimum hourly wage, with different multiples for biweekly, semimonthly, and monthly pay. Filing stops it entirely for covered debts.
Will my employer find out?
Not automatically. They may learn if they are a creditor or if a garnishment has to stop. California and federal law prohibit an employer from firing you solely because you filed for bankruptcy, and state law separately bars firing an employee over a single judgment garnishment.
How much will my credit score drop?
It depends on where your score starts. Higher scores usually fall further, while people whose scores are already damaged by missed payments and collections see a smaller change. Scores can begin recovering soon after discharge with steady, responsible credit use.
How long does a Chapter 7 stay on my credit report?
Up to 10 years from the filing date. Its impact on your score fades well before then, and many clients see recovery start within the first year.
My old debt is past the statute of limitations. Do I still need bankruptcy?
Possibly not for that debt. The expired deadline is a defense you must raise in a written answer if you are sued, and a payment will not revive a time-barred debt. But if other debts, garnishments, or judgments are in play, bankruptcy may still make sense. The attorney can sort time-barred debts from live ones.
A creditor already got a judgment against me. Does Chapter 7 help?
Often yes. If the underlying debt is dischargeable, Chapter 7 can eliminate it and stop enforcement through wage garnishment and bank levies. A California judgment is enforceable for 10 years and can be renewed, which is why waiting rarely makes the problem go away.
Can a paralegal or notary file my Chapter 7 for me?
A bankruptcy petition preparer can type information into the forms but cannot give legal advice, choose your exemptions, or represent you if a trustee or creditor raises an issue. Errors in a filing can cost you property or your discharge, which is why working with an attorney matters.
Do I have to come into an office?
No. The firm handles cases fully by phone, email, video, and online chat, and offers 100% virtual consultations, so you can complete the process from home.
Serving Chapter 7 Clients Across Los Angeles County and Southern California
Wadhwani & Shanfeld represents Chapter 7 clients throughout Los Angeles County, from the city of Los Angeles and Hollywood to Santa Monica and the Westside. In the San Fernando Valley, the firm works with filers in Sherman Oaks, Van Nuys, Encino, Woodland Hills, Reseda, Northridge, Granada Hills, North Hollywood, North Hills, Mission Hills, San Fernando, and Sylmar. Clients also come from Santa Clarita and the Antelope Valley communities of Lancaster, Palmdale, and Acton.
Across the south and southeast parts of the county, the firm serves Long Beach, Lakewood, Torrance, Compton, Inglewood, Gardena, Norwalk, Bellflower, Paramount, Cerritos, Cypress, Signal Hill, and Huntington Park. East of downtown, it helps people in Pomona, Claremont, Glendora, West Covina, and the eastern San Gabriel Valley.
The firm’s reach continues into the Inland Empire, including Ontario, Rancho Cucamonga, Upland, Fontana, Chino, Chino Hills, Montclair, San Bernardino, Riverside, and the Coachella Valley. In Orange County it serves Anaheim, Santa Ana, Garden Grove, Buena Park, Fullerton, Huntington Beach, Westminster, Costa Mesa, Newport Beach, Tustin, La Habra, Placentia, Mission Viejo, and Laguna Niguel. Wherever you live in the region, the court handling your case is the U.S. Bankruptcy Court for the Central District of California, and the firm files in every one of its divisions.
Talk With a Los Angeles Chapter 7 Bankruptcy Attorney Today
If collection calls, a lawsuit, or a garnishment are wearing you down, a conversation with a Los Angeles Chapter 7 bankruptcy attorney at Wadhwani & Shanfeld can tell you quickly whether Chapter 7 fits, what you would keep, and what to do first. The consultation is free, and you speak directly with an attorney from the first call.
Call to schedule a consultation by phone, video, or in person, and get a straight answer about whether Chapter 7, Chapter 13, or a solution outside of court gives you the best fresh start. If a sale date or response deadline is close, say so right away so the firm can move fast.
