A Fresh Start Is a Legal Right. Let’s Find Out What Yours Looks Like.

Which Chapter

How do the chapters compare?

Every case is different, but this is the shape of the decision. The consultation is where we put your numbers into it.

Is Chapter 7 right for me?

Chapter 7 is the fastest and cleanest fresh start: the trustee reviews your assets, sells anything that is not exempt (in most consumer cases, nothing), and the court discharges your unsecured debts in about four months. Eligibility turns on the means test under 11 U.S.C. § 707(b): if your household income is below the California median for your household size, you qualify; if it is above, a deduction-based calculation decides. As a CPA-led firm we run the means test precisely, including the deductions most filers miss.

California does not allow the federal exemptions, but it offers two exemption systems of its own, and you choose one. The § 704 system protects a homestead of between roughly $300,000 and $600,000 (indexed annually) and is built for homeowners. The § 703.140 system has a smaller homestead but a large wildcard that protects cash, vehicles, and other property, and is often better for renters. Choosing the wrong system can cost you a house or a bank account; we model both before filing. Read more →

How does Chapter 13 save a house or a car?

Chapter 13 is a court-supervised repayment plan, three to five years long, funded from your income. It is the chapter for people who are behind on a mortgage and want to keep the house: the automatic stay stops the foreclosure, and the plan cures the arrears over its term while you resume regular payments. It also lets you cram a vehicle loan down to the car’s value if the loan is old enough, strip a wholly unsecured junior lien from the house, and pay priority tax debt without further penalties or interest.

Plan payments are calculated from your budget under the means test, and unsecured creditors receive what is left, which is often a small percentage. At the end of the plan the remaining unsecured balance is discharged. Chapter 13 is also the answer when a debtor has too much non-exempt property for Chapter 7, or has income above the means test threshold. Read more →

What is Subchapter V, and is my business small enough?

Subchapter V of Chapter 11 is the small business reorganization chapter, created in 2020 to make Chapter 11 workable for companies that could never afford the traditional version. A business with total debts under the statutory cap (indexed, currently just under $3.4 million), at least half of it from business activity, can file, propose its own plan within 90 days, keep its equity, and confirm the plan over creditor objection if it commits its projected disposable income for three to five years. There is no creditors’ committee and no competing plans; a Subchapter V trustee facilitates rather than runs the case.

This is the chapter for the business that is viable but buried: an SBA loan it cannot service, a landlord or a lender that will not negotiate, a payroll tax arrearage, or a judgment that threatens the accounts. We prepare the projections, the plan, and the disclosure, and handle the owner’s personal guaranty exposure in the same engagement. The forensic accounting side of the practice is what makes the projections credible to the court and the trustee. Read more →

Can bankruptcy really wipe out tax debt?

Yes, income tax, if it passes four tests. The return was due, including extensions, more than three years before the bankruptcy filing (11 U.S.C. § 507(a)(8)(A)(i)). The return was actually filed more than two years before the filing (§ 523(a)(1)(B)). The tax was assessed more than 240 days before the filing (§ 507(a)(8)(A)(ii)). And there was no fraud or willful evasion (§ 523(a)(1)(C)). Tax that passes all four is a general unsecured claim, discharged in Chapter 7 and paid pennies in Chapter 13. Tax that fails any one is a priority claim: it survives Chapter 7, but can be paid through a Chapter 13 or Subchapter V plan without ongoing penalties.

The dates come from the IRS account transcripts, and events like an offer in compromise, a prior bankruptcy, or a collection due process request pause the clocks. Reading those transcripts correctly, and timing the filing to the day the tax becomes dischargeable, is the single highest-value thing an attorney-CPA does in a tax-driven bankruptcy. Payroll trust fund taxes and sales taxes collected from customers are never discharged; those get a different strategy. The FTB follows the same federal tests for California income tax. Read more →

What about SBA loans, judgments, and business debt?

COVID-era EIDL and PPP loans, SBA 7(a) loans, and the personal guaranties behind them have become one of the most common reasons California owners call us. An EIDL over $200,000 carries a personal guaranty; a defaulted loan goes to Treasury for offset of your tax refunds and federal payments with a 30 percent collection fee added; and the SBA can pursue the guarantor for years. Bankruptcy discharges the personal guaranty of an SBA loan the same as any other unsecured debt, and Subchapter V can restructure the business’s own obligation.

Judgments, wage garnishments, and creditor lawsuits stop with the automatic stay and are discharged with the underlying debt. Where bankruptcy is not the right answer, we also handle the alternatives: an SBA offer in compromise, a Treasury cross-servicing negotiation, or a workout with the lender. The analysis of which path costs less is a spreadsheet, and we build it before you choose. Read more →