Bankcruptcy Law

Chapter 7

What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy is known as the “liquidation” chapter of the U.S. Bankruptcy Code. It involves the liquidation process, in which a debtor’s non-exempt property is sold by a bankruptcy trustee in order to acquire funds for the repayment of creditors.

There are many property exemptions in our state, and a large number of those individuals who file for Chapter 7 are able to avoid the liquidation process. This means that they are able to complete their bankruptcy proceedings without losing any of their property.

Eligibility for Chapter 7

Chapter 7 is the most common form of consumer bankruptcy filed in the United States, and a total of 1,139,061 people filed for Chapter 7 bankruptcy in the United States in 2010. Individuals, partnerships, corporations, and other business entities are eligible to file for Chapter 7 protection, but an individual who intends to file must first qualify by taking a “means test.” This test involves a two-step analysis:

  • Step 1: The debtor’s current monthly income is compared to that of the median income for our state. If the debtor’s income level is below that of the state average, then it is likely that the debtor will qualify for Chapter 7. If the income level is above that of the state average, the second analysis comes into play.
  • Step 2: This involves making certain deductions from the debtor’s current monthly income in order to calculate a “disposable income” figure. If the debtor’s disposable income is less than the limit delineated in the bankruptcy code, then the debtor will qualify for Chapter 7.

The attorneys at Law Office of Garry Barbadillo have extensive education in the area of bankruptcy. Together, we possess over 13 years of experience in practicing this type of law.

We have represented clients in a wide variety of cases, including many that involved Chapter 7 proceedings. We are available to provide you with one-on-one service in your Chapter 7 case to help free you from unmanageable debt as quickly and efficiently as possible.

Contact us online or call (408) 772-5469 today and schedule a FREE initial consultation with one of our experienced attorneys.


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