Southern California Chapter 7 Bankruptcy Lawyer
A judgment, a garnished paycheck, or a bank account frozen by a levy tends to push people toward Chapter 7 faster than any credit card statement does. Southern California Chapter 7 bankruptcy lawyer help is what Wadhwani & Shanfeld provides to individuals and families across Los Angeles, Orange, Riverside, and San Bernardino Counties, as a consumer bankruptcy and debt relief law firm.
Chapter 7 is the chapter that erases qualifying unsecured debt outright: credit cards, medical bills, personal loans, payday loans, and deficiency balances left after a repossession. Most cases wrap up in roughly four months. Unlike Chapter 13, there is no repayment plan to carry for years. What you get is a discharge, and what you need to get there is to clear the means test and keep your property inside California’s exemption rules.
That second piece is where most of the real lawyering happens. Chapter 7 is sometimes called “liquidation,” but the vast majority of our clients keep everything they own, because California gives filers two separate exemption systems and the choice between them shapes the entire case.
Why Choose Wadhwani & Shanfeld for Chapter 7 Filings
The firm is led by two Board-Certified Specialists in Consumer Bankruptcy, certified through the American Board of Certification, with more than 90 years of combined legal experience between the attorneys on the team. We represent clients in Chapter 7, Chapter 13, debt settlement, foreclosure defense, wage garnishment, creditor lawsuits, IRS tax debt, and small business debt, across the Los Angeles area, the San Fernando Valley, the Inland Empire, Orange County, and the Antelope Valley. You reach an attorney directly from your first call, and the entire case can be handled by phone, email, video, and online chat, with 100% virtual consultations available.
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. That matters in a Chapter 7 practice because accuracy on the petition and schedules is everything; a misstated asset or omitted creditor can cost a discharge. 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. Both attorneys hold board certification in consumer bankruptcy, a distinction earned by a small fraction of lawyers nationally.
Our firm files in every division of the U.S. Bankruptcy Court for the Central District of California, so your case is filed where your address dictates. When a garnishment, foreclosure sale, or repossession is days away, we move fast. And because we handle the alternatives too, we will tell you plainly if Chapter 7 is not your best route.
Debts and Situations That Lead to a Chapter 7 Filing
- Credit Card Balances: Revolving debt that has outgrown your income is the classic Chapter 7 discharge. Once the petition is filed, collection calls and letters must stop.
- Medical Bills: Unsecured medical debt from an illness or injury is dischargeable, and it is often the single largest item on a filer’s schedules.
- Personal and Payday Loans: Unsecured loans, including high-interest payday lenders, are generally eliminated in the discharge.
- Repossession Deficiencies: After a lender sells a repossessed car for less than the loan balance, the leftover amount is an unsecured debt that Chapter 7 can erase.
- Creditor Lawsuits and Judgments: Collection firms such as Hunt & Henriques, Reese Law Group, and Patenaude & Felix routinely sue on consumer accounts. Filing stops the lawsuit, and can address judgments already entered.
- Wage Garnishments and Bank Levies: A garnishment taking a share of every paycheck, or a levy on your account, is halted by the automatic stay the moment the case is filed.
- Older Income Tax Debt: Some income taxes can be discharged if they meet specific timing rules, which we check carefully before filing.
- Business Debt From a Failed Venture: Small business owners who personally guaranteed loans or cards often find Chapter 7 resolves the personal exposure.
What to Do Right Now If Debt Is Closing In
Start by gathering what you can: recent pay stubs, a list of every creditor and balance, any lawsuit papers, and a rough inventory of what you own, including vehicles and any equity in a home. Then call before a deadline passes. If you have been served with a lawsuit, the response deadline is the one that cannot be missed. An expired statute of limitations is a defense, but it is one you have to raise in a written answer; a court can still enter judgment against a person who ignores the summons. For written contract and book account debts in California, the limitations period is four years, and for oral contracts it is two. A payment on a time-barred debt does not revive it, and only a signed written acknowledgment restarts the clock.
If wages are being garnished, know the baseline: an ordinary judgment garnishment is limited to the lesser of 20 percent of weekly disposable earnings or 40 percent of the amount by which those earnings exceed 48 times the applicable minimum hourly wage, with different multipliers for biweekly, semimonthly, and monthly pay. Your employer cannot fire you because of garnishment on a single judgment. A Chapter 7 filing stops most garnishments outright.
For bank levies, California automatically protects a set amount in a deposit account without any exemption claim, but that protection does not reach levies for wages owed to another person, child or spousal support, or debts owed to the state. If a foreclosure is in motion, the timeline matters: the sale cannot occur earlier than three months and 20 days after the notice of default is recorded, the notice of sale must be mailed and posted at least 20 days before the sale, and a monetary default can be reinstated until five business days before the sale date. If a car has been repossessed, the lender must give at least 15 days’ written notice before disposing of it, and you can ask in writing for a 10-day extension of the redemption period.
Your filing location depends on your street address, not a P.O. box. Los Angeles-area residents file in the Los Angeles Division in downtown Los Angeles or the San Fernando Valley Division in Woodland Hills; Orange County cases go to the Santa Ana Division; Riverside and San Bernardino County cases go to the Riverside Division. Some communities, including Santa Clarita, Lancaster, and Palmdale, need their zip code confirmed against the court’s locator before a division is assigned. We handle that determination for you. The most common mistakes we see are paying one creditor heavily right before filing, transferring property to a relative, and letting a paralegal or petition preparer file without legal advice.
The Means Test and California’s Two Exemption Systems
Chapter 7 eligibility starts with the means test. It compares your household income to the California median for a household of your size, and if you are above it, your allowable expenses are then taken into account. Anyone whose numbers do not fit may be a Chapter 13 candidate instead, and sorting that out is the first thing we do in a consultation.
Then comes the property question. California has opted out of the federal exemption scheme, so a filer must choose one of two state systems for the entire case. The first, found in the Code of Civil Procedure’s section 704 series, offers a large homestead exemption. Since a 2021 overhaul, that homestead protection is tied to the countywide median single-family home price, subject to a statutory floor and a ceiling that both adjust annually for inflation. The second system, under section 703.140(b), is built around a smaller residence exemption, a motor vehicle exemption, tools of the trade, and a flexible wildcard that can absorb unused residence protection. Its dollar amounts are adjusted every three years.
Which system wins depends on the person. A homeowner with real equity usually needs the section 704 system. A renter with a paid-off car, savings, and few other assets may do better with the wildcard in 703.140(b). To use California’s exemptions at all, you generally must have lived in the state for at least 730 days. Choosing wrong can expose property to the trustee, which is why our board-certified attorneys work through every available exemption before a petition is signed.
What Chapter 7 Cannot Do
A discharge is powerful but not universal. Child support, alimony, most student loans, most government fines, and debts for injuries caused by drunk driving generally survive. Secured debt works differently too: if you want to keep a financed car or a home, you must stay current on that loan, and a mortgage default is usually better addressed through Chapter 13. Prior filings also matter: eight years must pass between Chapter 7 filings, four years after a Chapter 13 before a new Chapter 13 can follow a Chapter 7, and generally six years to file Chapter 7 after a Chapter 13.
Questions About Filing Chapter 7 in Southern California
How fast does the automatic stay take effect?
Immediately upon filing the petition. Creditors must stop calls, lawsuits, garnishments, levies, repossessions, and foreclosure activity. In an emergency, we can often prepare and file very quickly to stop a sale or levy.
Will I lose my house or car in Chapter 7?
Most clients keep both. If your home equity falls within the homestead exemption and you are current on the mortgage, you keep the house. Vehicles are protected up to the exemption amounts, and a financed car stays with you if payments are kept up.
How long does a Chapter 7 case take?
Most cases are completed in roughly four months from filing to discharge, though contested exemptions or trustee questions can extend that.
What if my income is too high for Chapter 7?
Failing the means test does not end your options. Chapter 13 reorganizes debt into one monthly payment over three to five years, and debt settlement may also fit. We run the numbers on all of them.
Will my employer find out?
Not automatically. They might learn if they are a creditor or if a garnishment must stop. California and federal law prohibit an employer from firing you solely because you filed.
How long does Chapter 7 stay on my credit report?
Up to 10 years from the filing date, though its effect on your score fades well before then, and many clients begin rebuilding within the first year with a secured card and on-time payments.
Can I file Chapter 7 if I have a lawsuit pending against me?
Yes. The automatic stay halts the suit. If the response deadline is close, call us first so we can decide whether to answer, negotiate, or file.
What happens to a judgment a creditor already won?
A California money judgment is enforceable for 10 years and can be renewed, though recent changes limit renewal to one time, for five years, on medical judgments under a set principal and on personal debt judgments under a set principal. Chapter 7 can often eliminate the underlying debt and remove the pressure of enforcement.
Can a creditor that broke collection rules be held accountable?
Possibly. California’s Rosenthal Act covers original creditors as well as collectors, allows actual damages plus an additional award for willful violations, and lets a prevailing consumer recover attorney fees. The suit must be brought within one year, so raise it early.
Is it worth hiring a lawyer rather than using a document preparer?
A petition preparer can type forms but cannot advise you, pick your exemption system, or stand up for you when a trustee or creditor objects. Errors can cost property or the discharge itself, which is why representation matters.
Do I have to come to an office to file?
No. We handle cases fully by phone, email, video, and online chat for clients throughout Southern California.
Serving Chapter 7 Clients Across Southern California
Our Chapter 7 work spans Los Angeles County, Orange County, Riverside County, and San Bernardino County. In Los Angeles County, that includes Los Angeles, Hollywood, Inglewood, Compton, Torrance, Long Beach, Lakewood, Norwalk, Bellflower, Paramount, Gardena, Cerritos, Cypress, Signal Hill, Huntington Park, and Santa Monica. Across the San Fernando Valley and Westside, we represent clients 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.
Farther north, we serve the Antelope Valley, including Lancaster, Palmdale, and Acton. In the eastern San Gabriel Valley and Inland Empire, we help people in Pomona, Chino, Chino Hills, Montclair, Claremont, Glendora, West Covina, Ontario, Rancho Cucamonga, Upland, Fontana, San Bernardino, Riverside, and the Coachella Valley. In Orange County, our clients come from Anaheim, Santa Ana, Garden Grove, Buena Park, Fullerton, Huntington Beach, Westminster, Costa Mesa, Newport Beach, Tustin, La Habra, Placentia, Mission Viejo, and Laguna Niguel.
Talk With a Southern California Chapter 7 Bankruptcy Attorney
If you are weighing Chapter 7, the fastest way to find out whether it fits is to speak with a Southern California Chapter 7 bankruptcy attorney who will look at your income, your property, and your debts together. Call Wadhwani & Shanfeld for a free consultation, and you will talk directly with an attorney about every option inside and outside of bankruptcy. We will tell you honestly which path gives you the cleanest fresh start, whether you prefer to handle everything remotely or in person.
