Bankruptcy — San Francisco

People generally arrive at bankruptcy after a long stretch of trying everything else. By the time they make the call, the question is usually less about whether to file than about which chapter fits, what they would keep, and what would actually stop.

Filing brings the automatic stay into effect, which halts most collection activity while the case proceeds — the calls, the letters, and in many circumstances more serious steps. That effect is immediate, and for most people it is the first quiet they have had in a long time.

Which chapter applies depends on income, assets, the kinds of debt involved and what you are trying to protect. It is not a judgement about character, and it is not a decision to be made from a website.

Chapter 7 is a discharge. For those who qualify, most unsecured debt is written off, the case is usually concluded within a matter of months, and California’s exemption rules determine what you keep.

Chapter 13 is a reorganisation. Debt is brought into a repayment plan lasting several years, which the court must approve. It is often the route for someone who is behind on a home and wants to catch up, or who does not qualify for Chapter 7.

Eligibility for Chapter 7 involves a means test that compares household income against state figures, with adjustments. Whether it is even the right question depends on what you are trying to protect.

A rough picture is enough to begin: what is owed and to whom, what income comes in, what you own, and whether anything is secured against a home or a vehicle. Precision can come later.

Susan F. Reyes has been licensed to practice law in California since 1990 and works in English and Spanish. Consumer bankruptcy cases for people in San Francisco and Northern California are filed in the United States Bankruptcy Court for the Northern District of California.