In a Chapter 7 bankruptcy case you file a petition asking the court to discharge your debts. The basic idea is to wipe out (discharge) your debts in exchange for giving up any unexempt property. The exemptions for our jurisdiction are found in the California Code of Civil procedure (sections 703.010 – 704.995).

In most cases all of your property will be exempt (not able to be seized and sold by the trustee for the benefit of your creditors). The property that is not exempt can be sold by the trustee and the proceeds distributed to your creditors. If you want to keep the property that is unexempt you can pay the trustee the amount that you are over your exemptions and keep those items. With the new bankruptcy law the eligibility requirements to file a Chapter 7 bankruptcy are based on your income.
(click here for more info).

The limits and standards are from the IRS and USDOJ and the figures they allow are what we must use to see if you are eligible to file a Chapter 7 bankruptcy
(learn about eligability).

If you are over the initial threshholds you may still be able to file a Chapter 7 bankruptcy if your allowable living expenses exceed your monthly income
(national expense standards).