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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38910
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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recently divorced, credit now in the tank. Lost my job but

Customer Question

recently divorced, credit now in the tank. Lost my job but now working again, I am overwhelmed by bills. thinking of filing chapter 7. How does bankruptcy work, and how do I get started
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 4 years ago.

A Chapter 7 bankruptcy has a threshold requirement for an individual, which requires that you satisfy something called the "means test." If you qualify, then you can file, you will be provided with certain exemptions for property that you can protect, such as retirement accounts (401(k), IRA), and a certain amount for a motor vehicle, and a number of other items of personal property. In fact, if you do not own a home, then in addition to your retirement accounts, you can also exempt up to $25,340, in personal property -- which is quite a bit of items, especially if you are borrowing money on or leasing your car -- because the exemption covers the equity value of property (the difference between fair market value and any secured loans) -- not the property's gross value.

That said, the first thing to do is to take the means test, which you can do for free at this link. Type in your Zip Code, click "Go," and the calculator screen will appear. Ignore everything on the right side of the screen -- it's all advertising. Work down the left side and fill in the details, and when you finish, you will know if you qualify.

Assuming you qualify, then you will have to decide whether you want to hire a bankruptcy attorney (typical Chapter 7 runs between $1,500-$2,500 -- dependent upon the attorney) -- or try to "do-it-yourself." If you choose the former, then for a bankruptcy attorney referral, see this link. If you choose to do-it-yourself, then click here for a relevant guide.

That about covers it. Hope this helps.
Customer: replied 4 years ago.

i qualify easily, but can you recommend a lawyer who will take payments? recently out of the military and currently enrolled in college, funds are limited but steady. I am in the San Fernando valley area.

Expert:  socrateaser replied 4 years ago.
I'm sorry -- but I'm not permitted to make direct referrals. The only referral I can make is to the State Bar Certified referral services -- or to legal aid. I gave you the paid attorney referral link last time. If you want to try legal aid, then here is another link.

Most bankruptcy lawyers won't take payments for a Chapter 7, in my experience. So, you would have to shop around -- probably for a lawyer with some military service experience -- because you need someone who empathizes with your circumstances.

Hope this helps.