Woodland Hills is an affluent district in Los Angeles with a Mediterranean climate. It is located in the southwestern area of the San Fernando Valley and with an estimated 67,006 residents, it is one of the least densely populated areas in Los Angeles. The western boundary of Woodland hills abuts a regional park with miles of trails, known as the Upper Las Virgenes Canyon Open Space Preserve. South of the district is the Santa Monica Mountains National Recreation Area. Despite the area’s picturesque surroundings, financial problems from foreclosures to bankruptcies affect residents of Woodland Hills. A common concern for more affluent people who must file for bankruptcy is how to protect their assets. A knowledgeable Woodland Hills bankruptcy attorney can evaluate your financial situation and advise you as to the best means of navigating the bankruptcy process.
Protecting Your Assets During Bankruptcy
The first thing to be aware of is that bankruptcy does not require you to give up absolutely everything you own. For example, you can preserve certain assets by “exempting” them. Every state follows different rules related to exemption.
California has two state-based exemption systems: System 1 and System 2. You can elect either system, depending on what type of assets you hope to protect. In Chapter 7 bankruptcy, the system you choose helps you protect certain assets from creditors, and in Chapter 13 bankruptcy, the exemptions determine how much you have to repay creditors.
Chapter 13 Bankruptcy and Asset Protection
Some people file Chapter 13 because they do not pass the means test that qualifies some debtors to file for Chapter 7, which requires debtors to have an income that is less than the median income for their household size. Others opt to file for Chapter 13 because it will allow them certain “legal” advantages and benefits which are not available in a Chapter 7. Chapter 13 bankruptcy requires debtors to develop a reasonable repayment plan, through which they pay the bankruptcy trustee every month. Trustees pay off in full a debtor’s priority debts and mortgage arrears. However, the trustee must also make a determination as to how much of the unsecured debt, if any (medical bills, credit cards, and personal loans), must be repaid. The type of exemption system you select, along with your disposable income, helps determine how much you have to pay unsecured creditors.
You must repay the portion of property you are not able to exempt under the chosen system to unsecured creditors. All of your disposable income must contribute to your plan payments and all payment plans must be completed in 3-5 years. This means that if the value of your nonexempt assets is exceptionally high in comparison to your disposable income, you may not have enough income to repay creditors in five years. That may mean you don’t qualify to file Chapter 13 bankruptcy and will have to consider Chapter 7 bankruptcy.
Figuring out which type of bankruptcy to file, and which exemption system will let you protect the assets that are most important to you, is much easier with the help of an attorney. Filing requirements are complex, bankruptcy laws continue to change, and making the right strategic decisions is critical if you are considering bankruptcy. Contact the experienced Woodland Hills bankruptcy lawyer Devin Sawdayi at 310-475-9399 or via our online form for confidential help in filing for bankruptcy.
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