Law Offices of Adam D. Woolsey
Informational Bankruptcy Links
- Bankruptcy Means Test
- Homestead Exemptions
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- Federal District Courts - California
Chapter 7 proceedings are often referred to as bankruptcy “Liquidation”. A debtor is no longer required (by law) to pay any debts that are discharged.
Voluntary Ch. 7 bankruptcy proceedings are most commonly associated with personal bankruptcy. To file, the debtor must pass a “means test”. The discharge operates as a permanent order directed to the listed creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.
Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien, subject to any exemptions (e.g. Homestead Exemption; See, for example, Cal. CCP 703-704).
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