What is Chapter 7?

Chapter 7 bankruptcy is the most common proceeding filed by individual consumers to obtain relief from the burden of paying back their indebtedness. It is is a federal court process in which you eliminate your legal obligations to pay back most types of unsecured debt when you do not have the means to pay your creditors back and provides a fresh financial start for individuals.

Who can file Chapter 7 bankruptcy?

Although the requirements of who can and cannot file a Chapter 7 changed in 2005, most people who could file a Chapter 7 Bankruptcy before 2005 can still file bankruptcy.

You can not file bankruptcy if:

  • In the previous eight years, you have filed for Chapter 7 Bankruptcy and received a bankruptcy discharge;
  • In the previous eight years you filed for Chapter 13 and paid less than 70% to your unsecured creditors;
  • You earn more than the average household size in your state and do not pass the Means Test. (See Qualifications and Means Test).
  • Additionally, you may not want to file bankruptcy if your assets cannot be fully protected under the bankruptcy laws. It should be noted that in California most debtors are able to protect most if not all of their property under one of the two available sets of statutes available. For more information regarding the protection laws click here.

Most types of your unsecured debts can be eliminated or discharged in Chapter 7 bankruptcy. An unsecured debt is a debt not attached or secured on a piece property. Credit cards, personal loans, payday loans and medical bills are the most common type of unsecured debts.

All of those types of debts can usually be eliminated in a Chapter 7 Bankruptcy. Even those debts that are subject to lawsuits and judgments can be discharged. There are some exceptions, however, and some debts in a Chapter 7 Bankruptcy will not be discharged.


These special debts include student loans, court ordered restitution, recent taxes, debts obtained by fraud, child support, and most tickets and fines. Debts on secured property such as car loans and mortgages will also not be discharged unless you are willing to surrender the property.

You also can choose to continue to pay these debts if you intend to keep the property. If you have any questions regarding the discharge-ability of a particular debt, you should speak to an attorney. Many attorneys offer free consultations.


As outlined in the Court’s informational book entitled “Bankruptcy Basics,” the individual debtor is permitted to select specific laws to protect property they own. These laws are called exemptions and normally protect basic living- and work-related necessities including a house, car, retirement investments, clothing and other personal property up to a certain limit.

Statistically, most consumer debtors are able to protect and keep all of their personal property. California also offers the flexibility of two different sets of laws for people filing bankruptcy — the state law exemptions found in CCP §704 and a set of bankruptcy-only exemptions in CCP §703.140. For more specific information regarding these laws, click here.


Once the Chapter 7 bankruptcy is filed, all creditors, even those whose debts will not be discharged, must stop trying to collect their debt from you directly. This court order that goes into effect immediately upon the filing is known as the “Automatic Stay” and has the power to stop all types of various collection actions creditors may be pursuing such as garnishments, lawsuits, harassing phone calls and collection letters.

During your bankruptcy proceeding, creditors are not allowed to contact you directly or collect from you. This includes debts (such as a car loan) that you may want to continue to pay. You should continue to pay any secured debts you desire to keep even if you do not receive a monthly statement from that creditor. Once you have received a bankruptcy discharge, collection efforts of discharged debts cannot resume. If a debt is not dischargeable or you have agreed to continue to pay a particular debt, those creditors can continue collection efforts after your proceeding is concluded and monthly statements should resume.


All creditors must be listed in your bankruptcy paperwork, even those you may choose to continue to pay. A debtor signs the Bankruptcy documents under penalty of perjury pledging that all information is accurate, complete, true and otherwise correct to be best of their knowledge.

A debtor can continue to pay certain secured creditors such a car or furniture loan, with court approval; however, a court will not approve a debtor paying an unsecured credit card merely because they want to “keep a credit card.” A debtor may be able to unilaterally work out an agreement with a particular unsecured creditor to keep a particular credit card; however the court will not formally approve such agreements.


If a person filing wants to keep a car or furniture and they can afford the payments, a debtor can negotiate with that creditor to allow them to to keep these items by agreeing to continue to make the loan payments. This is very common and is known as a “REAFFIRMATION” of the debt. A debtor will have to agree to keep the contractual payments current, and the court will have to approve the agreement. If the debtor later fails to make the payments, then the creditor can repossess the item and the debtor may be responsible to pay for the remaining unpaid loan amount (loan deficiency).

Another alternative to keeping furniture and cars that have secured loans is through “Redemption.” In order to “redeem” the property and keep the item, a debtor can pay the creditor a lump sum during the case based on the replacement value (rather than the loan balance) of the item. With some exceptions, household goods that a debtor has pledged as security for a loan can be retained and the lien avoided without any payment. Speak to an attorney if you have questions concerning the best options in your particular situation.

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Our Bankruptcy Services

Need other bankruptcy services? Call us. We can prepare many routine documents such as amendments, motions to reopen, and others.

Our services include:

  1. Assistance with obtaining a FREE credit report.
  2. Information on how to take the mandatory pre and post-filing bankruptcy classes with an approved vendor on line or over the telephone. Certificates are issued immediately upon completion of class.
  3. Easy on line question / answer interface to provide all necessary information we need to prepare your paperwork.
  4. Completion of all Official Bankruptcy Forms and local district forms.
  5. Two FREE legal manuals regarding the bankruptcy process.
  6. Detailed instructions for processing your bankruptcy paperwork with the court!
  7. Emergency document preparation services available for same day filings.

 

Bankruptcy Services We Offer Price
Chapter 7 Bankruptcy – Central District:
Counties Served – Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, and Ventura
$200
Chapter 7 Bankruptcy – Northern District:
Counties Served – Alameda, Contra Costa, Del Norte, Humboldt, Lake Martin, Mendocino, Monterey, Napa, San Benito, Santa Clara, Santa Cruz, San Francisco, San Mateo, Sonoma, and Santa Rosa
$150
Chapter 7 Bankruptcy – Southern District:
Counties Served – Imperial and San Diego
$150
Chapter 7 Bankruptcy – Eastern District*:
Counties Served – Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Fresno, Glenn, Inyo, Kern, Kings, Lassen, Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Solano, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolomne, Yolo, and Yuba. *Due to fee restrictions placed by the Eastern District court, document preparation for this district are restricted.
Services not available
Chapter 13 Emergency Petition:
(Central District of California only) Includes preparation of Petition, Schedules and Statement of Affairs. Does not include preparation of Chapter 13 Plan of Reorganization. Other post-filing forms are required by Central District and not included in basic fee.
$200
Bankruptcy Amendment $35+
Unlimited Attorney Advice Package – Chapter 7 only:
Optional service package offered to all of our bankruptcy clients. Includes telephonic consultation by bankruptcy attorney, comprehensive report and unlimited advice/assistance by the attorney throughout the entire bankruptcy proceeding by email/telephone. Services are provided by an independent bankruptcy attorney and not our office. Great option for people filing bankruptcy on their own, but who need the extra assistance that only a bankruptcy attorney can provide. Package not available to non-clients.
$150
Other Bankruptcy Services Call for Quote

Bankruptcy Services We Offer

  • Chapter 7 Bankruptcy – Central District:
    Counties Served – Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara, and Ventura – $200
  • Chapter 7 Bankruptcy – Northern District:
    Counties Served – Alameda, Contra Costa, Del Norte, Humboldt, Lake Martin, Mendocino, Monterey, Napa, San Benito, Santa Clara, Santa Cruz, San Francisco, San Mateo, Sonoma, and Santa Rosa – $150
  • Chapter 7 Bankruptcy – Southern District:
    Counties Served – Imperial and San Diego – $150
  • Chapter 7 Bankruptcy – Eastern District*:
    Counties Served – Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Fresno, Glenn, Inyo, Kern, Kings, Lassen, Madera, Mariposa, Merced, Modoc, Mono, Nevada, Placer, Plumas, Sacramento, San Joaquin, Shasta, Sierra, Siskiyou, Solano, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolomne, Yolo, and Yuba. *Due to fee restrictions placed by the Eastern District court, document preparation for this district may be limited. – Services not available
  • Chapter 13 Emergency Petition:
    (Central District of California only) Includes preparation of Petition, Schedules and Statement of Affairs. Does not include preparation of Chapter 13 Plan of Reorganization. Other post-filing forms are required by Central District and not included in basic fee. – $200
  • Bankruptcy Amendment – $35+
  • Unlimited Attorney Advice Package – Chapter 7 only:
    Optional service package offered to all of our bankruptcy clients. Includes telephonic consultation by bankruptcy attorney, comprehensive report and unlimited advice/assistance by the attorney throughout the entire bankruptcy proceeding by email/telephone. Services are provided by an independent bankruptcy attorney and not our office. Great option for people filing bankruptcy on their own, but who need the extra assistance that only a bankruptcy attorney can provide. Package not available to non-clients. – $150+
  • Other Bankruptcy Services – Call for Quote

**Fees are for Document Preparation only and do not include any filing fees, or other costs. When using A People’s Choice, you will ALWAYS work with a live Registered Legal Document Assistant. Our services provide flexibility for our customers and will always be based on low cost, flat fees. Call us today!