Here in Monterey County, most of us have heard tales of sudden freezes or prolonged droughts that ruined crops. Many of us have had personal experience with these things. Just like no one can control the weather, no one can control things like the onset of a chronic illness, job loss, or divorce. When these unexpected things strike a family, they often bring financial ruin. Bankruptcy offers a way to eliminate debt and retain important assets. Not many other federal debt relief programs offer both these things.
The bankruptcy attorneys near Gonzales, CA at Miranda, Magden & Miranda understand that your financial problems probably are not your fault. With that fact in mind, we work hard to find solutions for your family. These solutions include not only debt relief, but also long term credit rebuilding to help you put bankruptcy behind you. Throughout this entire process, we proactively communicate with you, so you are never in the dark.
Some Exempt Assets in a California Bankruptcy
In board games like Monopoly, bankrupt players lose all their assets, and they also lose the game. Fortunately, real life is a lot different. For one thing, people who file bankruptcy do not “lose” the game. In fact, since they go back to the starting line, they have a chance to win.
Furthermore, most people do not lose any of their assets when they file bankruptcy, especially in California. The Golden State has one of the most intricate bankruptcy exemption systems in the country. It is designed to protect financially distressed families, but only an experienced bankruptcy attorney near Gonzales, CA should try to navigate it.
There are basically two exemption tracks. In general, most homeowners use System 1 exemptions. These exemptions apply to:
- House: Married couples may generally exempt between $100,000 and $175,000 of home equity. The trustee cannot seize and sell the house unless the sale price would fetch enough to pay off the equity exemption and greatly benefit the creditors. That is not the situation in most cases.
- Motor Vehicle: State law exempts up to $3,325 in motor vehicle equity. Most new cars have high values and practically no equity, so they are usually safe. Most used vehicles have considerable equity but practically no value, so they are safe, as well.
- Retirement Accounts: IRAs, 401(k)s, and other tax-exempt savings account are 100% exempt, regardless of value. The same thing applies to many public employee pension plans.
- Personal Property: Almost all personal property items, including up to 75% of current wages, are exempt under System 1.
If you do not own a home, System 2 is probably better. The home equity exemption is much lower, but a wildcard exemption of up to $30,825 is available. Debtors may use the wildcard to protect otherwise nonexempt property, like a second car or a boat. There are some other differences, as well, so a bankruptcy attorney near Gonzales, CA will carefully review all the pros and cons.
Dischargeable Debts in Monterey County
Unsecured debts, like credit cards and medical bills, are usually dischargeable in both Chapter 7 and Chapter 13. These kinds of debts weigh down many area families. Outside of bankruptcy, the creditor holds all the cards. But when you file bankruptcy, the initiative belongs to you.
Other types of unsecured debts, such as back taxes, are dischargeable in certain circumstances.
Get Help From an Aggressive Lawyer
Bankruptcy protects assets and eliminates debt. For a confidential consultation with an experienced bankruptcy lawyer near Gonzales, CA, contact Miranda, Magden & Miranda LLP. We routinely handle matters in Monterey County and nearby jurisdictions.