Balancing finances as a single parent is no easy task. With only one income and multiple expenses, such as childcare, school fees, and housing, the financial burden can quickly pile up. If you're overwhelmed with debt, Chapter 7 bankruptcy could offer the relief you need. Offering a chance to reset your financial footing, this option might help you regain control of your finances while protecting the stability your family depends on. Here's what you need to know to make an informed decision.
What is Chapter 7 Bankruptcy?
Understanding the Basics
Chapter 7 bankruptcy, often referred to as "liquidation bankruptcy," is a process that discharges most unsecured debts, such as credit card bills and medical expenses. While some assets may be liquidated, essential property is often protected under California's exemption laws. More importantly, it puts an end to relentless creditor calls and wage garnishments, allowing you to focus on rebuilding without constant harassment.
Eligibility and the Means Test
To qualify for Chapter 7, your income must fall below the state median, or you must pass a court-mandated means test that assesses your ability to repay debts through alternative methods. This ensures that those in the greatest need of debt relief can access this option.
The Benefits for Single Parents
For single parents, Chapter 7 bankruptcy can provide significant advantages. It eliminates many unsecured debts, enabling you to prioritize essentials like childcare and education. You'll also benefit from an immediate halt to creditor harassment, giving you the mental bandwidth to focus on your family. And while filing will temporarily impact your credit score, many find that being debt-free allows them to rebuild their credit more effectively over time.
It's worth noting that single parents often worry about losing necessary assets, like a vehicle or family home. Fortunately, California laws include exemptions that help protect items critical for your everyday life. This means you can safeguard the essentials that enable you to work and care for your family.
Work with Reliable Bankruptcy Attorneys in Los Angeles, CA
If endless debts are taking a toll on your family's finances and well-being, it may be time to explore Chapter 7 bankruptcy. At RHM LAW LLP, we understand the unique challenges faced by single parents and are here to guide you through every step. Contact our experienced team today at (213) 344-0043 for compassionate, expert advice, and begin your path toward financial stability and peace of mind.