Chapter 7 is the one most people mean when they say bankruptcy. You file, an automatic stay stops the collection calls and the garnishments that day, a trustee reviews what you own, and roughly four months later the court wipes out what you owed.
Most of our Chapter 7 clients lose nothing. Not the house, not the car, not the retirement account. That surprises people, and it is the single biggest misconception we spend time correcting.
What it actually does
Credit cards, medical bills, personal loans, old repossession balances, most judgments. Those go away. So do the lawsuits attached to them.
What it does not touch: most student loans, child and spousal support, recent taxes, criminal fines, and debts you took on by fraud. There is a page on that, and you should read it before you get your hopes up.
Do you qualify?
There is an income test. If your household income is below the California median for your household size, you pass and there is nothing more to discuss. If you are over, a second calculation looks at your actual expenses, and plenty of people who are over the median still qualify once the mortgage and the childcare come out.
The median figures change every year and they run high in California, which works in your favor more often than people expect.
Being over the median is not a no
About a third of the people who call us assuming they earn too much turn out to qualify once the second calculation runs. It takes about ten minutes to find out.
What it costs
Our Chapter 7 flat fee starts at $1,850. The court's filing fee is $338. The two required courses run somewhere between $10 and $50 each. There is a full breakdown on the cost page, including what the fee does not cover, which most firms will not tell you until later.
How long it takes
- We gather documents and prepare the petition. Usually two to four weeks, and it moves as fast as you get us the paperwork.
- We file. The automatic stay takes effect the moment the case hits the docket.
- About a month later, the 341 meeting. It is on Zoom, it is usually under fifteen minutes, and I will be on the call with you.
- Roughly sixty days after that, the discharge order arrives in the mail.
“People brace for a courtroom. There isn't one. In nineteen years I have had a consumer Chapter 7 client appear before a judge maybe four times, and never for anything routine.”
Naomi Reyes-AshfordWhere we file
All five divisions of the Central District: Los Angeles, San Fernando Valley, Santa Ana, Riverside and the Northern Division in Santa Barbara. Which one hears your case depends on where you live, not where we sit. Since June 2024 the 341 meetings in this district have been on Zoom, so distance stopped mattering.
Questions we get asked
Will my employer find out?
Almost certainly not. Bankruptcy filings are public record, but nobody notifies your employer in a Chapter 7 unless your wages are already being garnished, in which case we notify the payroll department to make it stop.
Can I file without my spouse?
Yes, and sometimes you should. It depends on whose name the debt is in and what the community property picture looks like.
How long does it stay on my credit?
Ten years from the filing date. But the practical damage is front-loaded, and most clients see their score start recovering within a year because the delinquent accounts stop reporting as past due.
What if I own a business?
A sole proprietorship files with you. An entity is a different conversation, and honestly, one we would refer out.
Start here
Pull your last six months of pay stubs and a rough list of who you owe. That is enough for a first call. If you want to know whether you qualify before you talk to anyone, the means test page walks through the math.