Chapter 7 vs. Chapter 13 Bankruptcy
Bankruptcy is a powerful legal tool that provides relief from overwhelming debt. It is not a failure — it is a legal right and often the most responsible path forward for a family under financial pressure. Understanding which chapter fits your situation is the first step, and it starts with a free conversation.
The automatic stay is immediate and powerful. The moment you file for bankruptcy, an automatic stay goes into effect. All collection calls, lawsuits, wage garnishments, and foreclosure proceedings must stop immediately — by federal law. You can breathe again.
What Bankruptcy Can Do For You
- Eliminate credit card debt, medical bills, and personal loans
- Stop foreclosure and give you time to catch up on mortgage payments
- Halt wage garnishments and bank levies — immediately
- End harassing creditor phone calls the moment your case is filed
- Discharge most qualifying tax debt under certain conditions
- Give your family a genuine, legal fresh financial start
What to Expect — Our Process
We handle the complexity so you can focus on moving forward. Here is what working with Maria looks like from start to finish.
Free Case Evaluation
We assess your debt, income, and assets to determine which chapter is right for you — and whether bankruptcy is even the best option for your situation. No charge, no pressure.
Document Preparation
We gather all necessary financial documents — tax returns, pay stubs, bank statements, a complete debt inventory — and prepare your petition accurately and completely. Errors in bankruptcy filings cause serious problems; we leave nothing to chance.
Filing & Automatic Stay
Your case is filed with the federal bankruptcy court. From this moment, the automatic stay is in effect. Collection calls, lawsuits, wage garnishments, and foreclosure must all stop immediately.
341 Meeting of Creditors
A brief meeting — typically under 10 minutes — where a bankruptcy trustee reviews your case. Creditors may attend but rarely do. Maria will thoroughly prepare you for every question and accompany you throughout.
Discharge
In Chapter 7, most debts are discharged within 3 to 6 months of filing. In Chapter 13, discharge occurs after you complete your repayment plan. At discharge, the eligible debts are gone — legally and permanently.
Frequently Asked Questions
Honest answers to the questions our Encino and Woodland Hills clients ask most.
Bankruptcy does affect your credit, but it is not permanent. Many clients begin rebuilding credit within 1 to 2 years of discharge. The relief from unmanageable debt often allows people to rebuild much faster than they could while struggling to keep up with minimum payments on an impossible debt load. A fresh start is exactly that — a start.
In many cases, yes. Chapter 13 is specifically designed to allow homeowners to catch up on mortgage arrears and keep their homes — stopping foreclosure from the moment the case is filed. In Chapter 7, you may be able to reaffirm your mortgage and remain in your home, provided you are current on payments and the home equity is within California's exemption limits.
Most student loans, recent tax debts, alimony, child support, and debts incurred through fraud generally survive bankruptcy and remain your responsibility. Other debts — criminal fines, certain federal penalties — also survive. We will review your specific debts in detail during your free consultation so you have a clear picture of what can and cannot be discharged.
You must pass the "means test," which compares your average monthly income over the past six months to the California median income for a household of your size. Even if your income is above the median, you may still qualify based on allowable expenses — housing, transportation, healthcare, and others. We will run this analysis for you at no charge during your free consultation.
Chapter 7 appears on your credit report for 10 years from the filing date; Chapter 13 for 7 years. However, most clients find that their financial situation — and their ability to obtain new credit — improves significantly within 2 to 3 years after discharge. Secured credit cards, credit-builder loans, and responsible credit use can accelerate that timeline considerably.