Orange County Bankruptcy Attorney

Chapter 7 bankruptcy, also known as liquidation bankruptcy, allows individuals and businesses to eliminate qualifying debts by turning over non-exempt assets to a court-appointed trustee. While there are no debt limits, individual debtors must pass the “California Chapter 7 Means Test,” which evaluates income to determine eligibility.

Thanks to California’s bankruptcy exemption laws, over 95% of individuals who file Chapter 7 bankruptcy get to keep all of their property. Exemptions protect certain assets in full, such as qualifying retirement accounts, and others up to specific limits.

Most unsecured debts are dischargeable, but some cannot be eliminated. These include certain tax obligations, domestic support, debts incurred through fraud or malicious acts, and those tied to fiduciary breaches, as outlined in Section 523 of the Bankruptcy Code.

Businesses may also file Chapter 7, but with key differences: 1) they do not receive a Chapter 7 discharge, and 2) they cannot claim exemptions. To learn whether this type of bankruptcy is right for you or your company, contact an Orange County Chapter 7 bankruptcy lawyer at Marshack Hays Wood today.

Chapter 11 bankruptcy is designed for businesses and individuals who want to keep their assets and continue operations rather than liquidate. A debtor files a reorganization plan outlining how they will repay creditors, which is then subject to creditor votes, Bankruptcy Court approval, and strict compliance with the U.S. Bankruptcy Code.

In most cases, a trustee is not appointed, allowing the debtor to manage their money and operations as a “debtor in possession.” However, creditor committees may be formed and can influence the negotiation and approval process. Because Chapter 11 plans can range from straightforward to highly complex, it’s essential to work with skilled California Chapter 11 bankruptcy attorneys who can guide you through the entire process as smoothly and efficiently as possible. 

Chapter 13 bankruptcy is a reorganization option that allows individuals and sole proprietors to repay all or part of their debts through a structured payment plan lasting three to five years. Instead of liquidating assets, debtors work with a court-appointed trustee who oversees payments, communicates with creditors, and ensures the plan is followed.

This chapter is often used by debtors who earn too much to qualify for Chapter 7 but still need meaningful relief. Chapter 13 bankruptcy also helps individuals keep their homes and may allow for the modification of certain secured debts. Because debt limits apply, those with higher income or larger debts may instead need to file under Chapter 11. Our experienced Chapter 13 bankruptcy lawyers can help determine if this option is right for your financial situation.

Small businesses also have the option to seek bankruptcy protection under different chapters of the Bankruptcy Code, depending on how the business is structured. In some cases, a business bankruptcy filing in California can address both business and personal liabilities, especially for sole proprietors whose obligations are closely tied to their personal finances. Partnerships, LLCs, LLPs, and corporations may also file to restructure or eliminate debt while protecting critical assets and preserving operations.

At Marshack Hays Wood, our experienced small business bankruptcy lawyers understand the financial pressure entrepreneurs face. We’re here to help you protect your money, explore practical solutions, and make strategic decisions for your company’s future.