How Chapter 7 Bankruptcy Can Help Californians Struggling with Debt
Debt Doesn’t Have to Control Your Life
At The Law Offices of Timothy Combs, we meet with people every day who feel like they’re drowning—overwhelmed by credit card balances, personal loans, medical bills, or past-due collections. Many have tried everything they can to stay afloat, but still find themselves stuck in a financial hole with no clear way out.
If this sounds familiar, Chapter 7 bankruptcy may offer the fresh start you need.
What Is Chapter 7 Bankruptcy?
Chapter 7 is often referred to as a “liquidation bankruptcy,” but that term can be misleading. For most people filing in California, Chapter 7 allows them to wipe out qualifying debts without losing all of their possessions.
It’s designed for individuals or families who don’t have the income to reasonably repay their debts. Once approved, most unsecured debts are discharged, meaning you are no longer legally obligated to pay them.
What Debts Can Chapter 7 Eliminate?
Chapter 7 can eliminate many common types of debt, including:
- Credit card debt
- Personal loans
- Medical bills
- Collection accounts
- Past-due utility bills
- Certain judgments and lawsuit-related debts
It can also stop wage garnishments, lawsuits, and harassing creditor calls almost immediately through the power of the automatic stay—a court order that freezes most collection activity the moment you file.
What Debts Cannot Be Discharged?
While Chapter 7 offers broad relief, it doesn’t wipe out everything. Some debts that typically cannot be discharged include:
- Recent income taxes
- Child support and alimony
- Court-ordered restitution
- Most student loans (except in rare hardship cases)
- Debts incurred through fraud
Will I Lose My Home or Car in a Chapter 7 Bankruptcy?
In many cases, no—especially if you’re current on payments and your equity is within the California exemption limits. California offers two sets of bankruptcy exemptions that allow you to protect:
- Equity in your primary residence
- A reasonable vehicle
- Household goods and personal items
- Retirement accounts and certain tools of the trade
At The Law Offices of Timothy Combs, we carefully evaluate your situation to choose the exemption system that best protects your assets.
Do I Qualify for Chapter 7 in California?
To file Chapter 7, you’ll need to pass the Means Test, which compares your income to the median for a household of your size in California. Even if your income is above the median, you may still qualify based on allowable expenses and deductions.
We help clients understand and pass the Means Test every day.
How Long Does Chapter 7 Take?
A typical Chapter 7 case in California takes about 4 to 6 months from filing to discharge. You usually won’t need to go to court—just attend a short hearing (called a 341 Meeting of Creditors) with the bankruptcy trustee.
How Chapter 7 Can Change Your Life
Here’s what Chapter 7 can do for you:
✅ Eliminate most or all of your unsecured debt
✅ Stop lawsuits, collections, and wage garnishments
✅ Protect many of your essential assets
✅ Give you peace of mind and a financial reset
✅ Help you rebuild your credit over time
Bankruptcy is not a sign of failure—it’s a legal tool designed to give good people a second chance.
You’re Not Alone—And You Don’t Have to Figure It Out Alone
If you’re overwhelmed by debt, we invite you to sit down with our team at The Law Offices of Timothy Combs. We’ll give you an honest, judgment-free assessment of your financial situation and explain whether Chapter 7 is the right option for you.
Let’s talk about your options—and your future.
Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. For personalized guidance based on your circumstances, contact our office directly.