One of the most common questions I hear from clients who are considering
bankruptcy is whether they will be able to keep their home and their car.
The good news is that California law offers some pretty good exemptions
for your home and car so that when you file bankruptcy,
you don’t lose everything. If you’re like many homeowners in San Diego and Chula Vista with
underwater mortgages and leased or loaned cars, this means you’ll
probably be able to keep your house and your car.
The vast majority of people who file for
Chapter 7 bankruptcy are considered “no asset” cases, which means with the exemptions
provided by law, there isn’t anything left for the bankruptcy court
to sell. In these cases, credit card debt, medical debt, and other unsecured
debts typically just get wiped out.
On the other hand, if you have more equity in your home or car than the
exemption amounts, a
Chapter 13 bankruptcy might be a better option. With Chapter 13, you typically keep your assets
and repay a portion of your debt through a court-approved repayment plan.
This gives you the opportunity to “catch up” on past-due mortgages
to save your house. The same basically goes for your car and other assets.
To qualify for Chapter 13, though, you generally must have regular income
that will enable you to make the court-appointed payments for the duration
of the repayment plan (three to five years).
With all the bankruptcy cases I’ve handled, I’ve seen how people
have really benefited from filing bankruptcy. I’d be happy to talk
to you about the particulars of your financial situation to see if there’s
something I can do to help you. Call my office at Denton Law Group at
(619) 458-3739 for a free consultation.