Switch to ADA Accessible Theme
Close Menu
Los Angeles Bankruptcy Lawyers / Blog / Bankruptcy / What Happens When I file for Bankruptcy?

What Happens When I file for Bankruptcy?


Finding yourself in debt is a stressful situation, and not knowing how to get out of it can be scary. However, you can take comfort in knowing that you have just taken the first critical step in seeking debt relief — educating yourself about bankruptcy.

While filing for bankruptcy on your own is a daunting task, keeping yourself educated about what happens during the bankruptcy process can help you communicate effectively with your bankruptcy attorney. Here are some bankruptcy facts to calm your fears and help you decide if filing for bankruptcy is the right option for you.

Understanding What Is and Isn’t Dischargeable

Credit card debt, medical bills and personal loans can usually be discharged in a Chapter 7 Bankruptcy. However, not all debts can be absolved. Anyone who files for bankruptcy is required to undergo a financial evaluation known as the “means test.” The means test determines if a person is eligible to file for Chapter 7 or Chapter 13 bankruptcy.

Here are a few common debts that may not be eligible when filing for Chapter 7 bankruptcy:

  • Debt incurred post-bankruptcy
  • Spousal or child support
  • Fines and penalties such as speeding tickets and criminal restitution
  • Student loans
  • Retirement plan loans
  • Secured loans in which you have stopped making payments
  • Certain income tax debts
  • Debts not listed in your asset case
  • Certain property taxes

Each bankruptcy case is unique. For more information about what debts can be discharged under Chapter 7, it’s always best to get professional advice from a bankruptcy attorney.

Debt Restructuring Option

Chapter 13 bankruptcy, also known as reorganization bankruptcy, is an alternative for those who do not qualify for Chapter 7. For example, someone may not be eligible for Chapter 7 if their monthly income is too high or if they desire to keep certain property. Here are some benefits to Chapter 13 bankruptcy:

  • Protection from foreclosure
  • Debt can be reduced to an affordable, all-in-one monthly payment
  • Option to repay taxes through a payment plan
  • Keep certain property

Although Chapter 13 can be more complicated than Chapter 7, a bankruptcy attorney will be able to navigate seamlessly through all the rules and regulations as deemed by the law.

Whether you have insurmountable credit card debt, medical bills or are facing foreclosure, filing for bankruptcy could be the best option for your situation. The bankruptcy attorneys at Wadhwani & Shanfeld will be able to answer your questions and ease your fears. Contact our Southern California bankruptcy attorneys for a free initial consultation.

Facebook Twitter LinkedIn