Bankruptcy FAQ | Ashley Bankruptcy Lawyers | California

Question 1

What is bankruptcy and how does it work?

Accepted Answer

Bankruptcy is a federal legal process that gives individuals and families a fresh financial start by eliminating or restructuring debt. When you file, an automatic stay immediately stops most collection actions — including lawsuits, wage garnishments, and creditor calls. A bankruptcy judge oversees the case and, once complete, eligible debts are discharged (wiped out) or reorganized into a manageable payment plan.

Question 2

Will bankruptcy stop creditor calls and wage garnishments?

Accepted Answer

Yes. The moment you file, the automatic stay goes into effect. This federal court order immediately stops creditor harassment, collection calls, lawsuits, wage garnishments, bank levies, and most foreclosure actions. Creditors who violate the automatic stay can be held in contempt of court.

Question 3

What debts can bankruptcy eliminate?

Accepted Answer

Bankruptcy can eliminate most unsecured debts, including credit card balances, medical bills, personal loans, payday loans, utility arrears, and certain older tax debts. Debts that generally cannot be discharged include child support, alimony, most student loans, recent tax debts, and debts from fraud or criminal activity.

Question 4

How will bankruptcy affect my credit?

Accepted Answer

A Chapter 7 bankruptcy stays on your credit report for 10 years; Chapter 13 stays for 7 years. However, many clients find their credit score begins to improve within 12–24 months of filing because their debt-to-income ratio drops significantly. Most people can qualify for a car loan immediately after discharge and a mortgage within 2 years after discharge.

Question 5

Can I keep my house and car if I file bankruptcy?

Accepted Answer

In most cases, yes. California's bankruptcy exemptions allow you to protect significant equity in your home and vehicle. If you are current on your mortgage and car payments, you can typically keep both. Chapter 13 is especially effective for homeowners who are behind on mortgage payments and want to save their home from foreclosure.

Question 6

What is Chapter 7 bankruptcy?

Accepted Answer

Chapter 7 is a liquidation bankruptcy that eliminates most unsecured debts quickly — typically within 3 to 5 months. It is the most common form of personal bankruptcy and is ideal for people with limited income and primarily unsecured debt like credit cards and medical bills.

Question 7

Do I qualify for Chapter 7?

Accepted Answer

To qualify for Chapter 7, you must pass the California means test, which compares your income to the state median. If your income is below the median, you automatically qualify. If it is above, additional calculations are done to determine eligibility. Our attorneys evaluate your situation for free — call us to find out if you qualify.

Question 8

How long does Chapter 7 take?

Accepted Answer

Most Chapter 7 cases are completed in 3 to 5 months from the filing date. You will attend one brief meeting (the 341 meeting of creditors), which is conducted by Zoom. After that meeting, you typically receive your discharge within 60 days.

Question 9

What is the 341 meeting of creditors?

Accepted Answer

The 341 meeting is a short, informal meeting with a bankruptcy trustee — not a judge. It typically lasts 5 to 10 minutes. You will answer basic questions about your finances and the documents you filed. In California, these meetings are conducted by Zoom, so you do not need to appear in person.

Question 10

What is Chapter 13 bankruptcy?

Accepted Answer

Chapter 13 is a reorganization bankruptcy that lets you keep your assets while repaying some or all of your debts over a 3 to 5 year court-approved plan. It is ideal for homeowners who want to stop foreclosure, people who do not qualify for Chapter 7, or those who have non-exempt assets they want to protect.

Question 11

Can Chapter 13 save my home from foreclosure?

Accepted Answer

Yes. Filing Chapter 13 immediately stops a foreclosure through the automatic stay. Your repayment plan can include catching up on missed mortgage payments over 3 to 5 years, allowing you to keep your home as long as you stay current going forward.

Question 12

How long does Chapter 13 take?

Accepted Answer

Chapter 13 repayment plans run 3 years if your income is below the California median, or 5 years if it is above. Once you complete all plan payments, remaining eligible debts are discharged and your case is closed.

Question 13

How much does it cost to file bankruptcy?

Accepted Answer

The court filing fee for Chapter 7 is $338 and for Chapter 13 is $313. Attorney fees vary by case complexity. At Ashley Bankruptcy Lawyers, we offer $0 down payment plans so you can get started immediately without paying everything upfront. Call us for a free evaluation and exact quote for your situation.

Question 14

Do you offer payment plans?

Accepted Answer

Yes. We offer easy payment plans with $0 down so that cost is never a barrier to getting the fresh start you deserve. We work with clients across all of California and will structure a plan that fits your budget. Call 833-726-DEBT for details.

Question 15

Is the initial evaluation really free?

Accepted Answer

Absolutely. Your initial debt evaluation is completely free and there is no obligation. We review your situation, explain your options, and give you an honest assessment — all by phone, so you never have to come into an office. Call us anytime at 833-726-DEBT.

Bankruptcy Questions Answered

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General Bankruptcy

Chapter 7 Bankruptcy

Chapter 13 Bankruptcy

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