Filing bankruptcy in California allows debtors struggling with debt to getting a fresh financial start. A Chapter 7 bankruptcy, also known as liquidation bankruptcies, where the assets and property of the debtor are liquidated by the trustee to repay your creditors in exchange for eliminating your unsecured debts. This article provides an overview of the California bankruptcy process. Read on to learn how to file bankruptcy in CA.
Make sure to check your eligibility to declare bankruptcy in Chapter 7. While it’s possible to file for bankruptcy on your own, it’s best to seek legal assistance from a local bankruptcy lawyer.
1. Prepare your bankruptcy forms.
The first step to file bankruptcy is to prepare your bankruptcy petition. This involves filling out forms regarding your monthly income, living expenses, tax returns, as well as other information regarding your financial situation. You’ll also need to compile a list of all your secured debt and unsecured debt along with their creditors. You also need to provide a list of exempt property and other assets you want to protect under bankruptcy exemptions.
Bankruptcy filers are also required to complete a credit counseling course before they filed for bankruptcy. This is because the certificate of completion should be filed along with your bankruptcy paperwork.
2. Pass the bankruptcy means test.
Chapter 7 bankruptcy filings require applicants to pass the means test. The means test looks at the gross income of your household and compares it to the state median income level for your household size.
If your disposable income falls below the median level, you pass the means test. Otherwise, you fail the test and you won’t be qualified to file Chapter 7 bankruptcy. Instead, consult your bankruptcy attorney to see if you can convert your bankruptcy case to Chapter 13.
3. File your petition to the bankruptcy court.
After you’re done preparing your petition in bankruptcy, you need to file it to court and pay the appropriate filing fees. If you’re unable to pay the fees either in full or in installments, you may apply to have the filing fee waived granted that you qualify under federal poverty guidelines.
4. Mail additional documents to your trustee.
Once you filed for bankruptcy, the bankruptcy proceedings start. A bankruptcy trustee is appointed to your case to verify the accuracy of your bankruptcy information. Trustees are also responsible for selling your nonexempt property and distributing it to pay off your creditors.
Your assigned trustee may request that you provide bank statements, pay stubs, and similar paperwork. Make sure to mail these documents to your trustee as soon as you can.
5. Attend your meeting with creditors.
The creditors’ meeting is likely the only time a bankruptcy filer goes to court throughout the bankruptcy proceeding. During the meeting, the trustee will ask you standard questions under oath and allow a creditor to ask questions as well.
6. Receive your bankruptcy discharge.
Before you can receive a bankruptcy discharge, you also need to attend a post-filing course. After completing the bankruptcy process and filing your completion certificate, you’ll be able to get your discharge in bankruptcy. This means that your qualifying debts are wiped out, and your liabilities for discharged debt are eliminated. Note that certain debts are nondischargeable, including alimony, child support, student loans, and tax debts.
If you’re thinking of filing for bankruptcy, it’s important to accurately prepare your petition for bankruptcy and receive legal advice from someone knowledgeable of bankruptcy laws. Contact the Law Office of Daniela Romero and get in touch with experienced Pasadena bankruptcy attorneys who can help you start your bankruptcy journey today!