CHAPTER 7
Chapter 7 Bankruptcy: Wipe Out Debt Fast
Chapter 7 bankruptcy, often called “liquidation bankruptcy,” is the fastest way to eliminate unsecured debts like credit cards, medical bills, personal loans, and certain tax debts. Ideal for those with limited income, Chapter 7 can provide a clean slate in approximately 3–4 months, allowing you to move forward debt-free or nearly debt-free.
At UNITED LEGAL ADVOCATES, LLP, we’ve helped thousands of clients use Chapter 7 to stop creditor harassment, halt wage garnishments, and protect their essential assets.
Key Benefits:
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Rapid Relief: Most cases resolve in 110–120 days, making Chapter 7 the quickest path to debt freedom.
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Debt Elimination: Wipes out unsecured debts, including credit card balances, medical bills, utility bills, and some older tax debts.
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Asset Protection: Over 95% of filers keep their home, car, retirement accounts, and personal belongings thanks to generous exemptions.
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Stops Harassment: The automatic stay under 11 U.S.C. § 362 halts creditor calls, lawsuits, wage garnishments, and bank account seizures the moment you file.
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Fresh Start: Provides a clean financial slate, setting the stage for credit rebuilding with our exclusive toolkit.
Who Qualifies?
To qualify for Chapter 7, your average household income over the past six months must be below the state median (e.g., $86,518 for a single person, $154,590 for a family of four in 2025 - Subject to annual updates; contact us for the current figures). If your income exceeds this, you may still qualify by passing the means test, which deducts allowable expenses like mortgage payments, childcare, healthcare, and taxes. The means test involves two forms:
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Form 122A-1: Calculates your raw income compared to the state median.
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Form 122A-2: Deducts IRS National and Local Standards (e.g., housing, transportation) plus actual secured debt payments (e.g., mortgage, car loan). If your 60-month disposable income is less than $9,075, you pass; between $9,075–$15,150 triggers further review; over $15,150 typically disqualifies you.
Our team at UNITED LEGAL ADVOCATES, LLP will guide you through this process, analyzing your paystubs and expenses to ensure accuracy.
Pro tip: Pre-paying allowable expenses (e.g., orthodontics, vehicle repairs) before the six-month look-back period can tilt the scales in your favor.
Exemptions: Keeping What Matters
Many fear Chapter 7 means losing everything, but that’s a myth. Most cases are “no-asset,” meaning no property is sold. Key exemptions include:
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Homestead Exemption: Protects up to $678,391 in home equity (2025, CCP § 704.730).
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Wildcard Exemption: Shields up to $33,650 in cash, bank accounts, or other assets—ideal for renters.
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Vehicle Exemption: Covers up to $9,525 in car equity per debtor.
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Retirement Accounts: 100% protected, including 401(k)s, IRAs, and pensions.
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Personal Property: Safeguards household goods, clothing, jewelry (up to $2,525), and tools of the trade (up to $9,525).
Nondischargeable Debts
Not all debts can be discharged in Chapter 7, including:
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Student loans (unless undue hardship is proven, which is rare but possible with our help).
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Child support and alimony.
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Recent tax debts (less than 3 years old or unfiled).
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Judgments for willful injury or DUI-related injuries.
We’ll review your debt portfolio to identify dischargeable debts and explore strategies for nondischargeable ones, such as negotiating payment plans or pursuing Chapter 13.
Ready to wipe out your debt? Call (949) 234-8212 for a free eligibility audit. We’ll analyze your finances and determine if Chapter 7 is your path to freedom.
CONTACT US
Address
19200 Von Karman Ave., Suite 600
Irvine, CA 92612
Email
Phone
949-234-8212
