How to File for Bankruptcy in California
Preparing to file for bankruptcy in California is a process that requires many of the same steps that are required when filing for bankruptcy throughout the rest of the country. It is important to become familiar with both federal and local laws when filing for bankruptcy in California. It is advised that most people seek the guidance of a qualified bankruptcy lawyer when exploring the options that are available.
Chapter 7 bankruptcy is the most common form of bankruptcy. This option allows for debts to be discharged through the court.
Chapter 13 bankruptcy is another option that is popular. This form of bankruptcy allows for a debtor to pay back creditors in small increments using a structured payment plan.
There are also several other bankruptcy options that are available to people with specific situations. For instance, Chapter 12 bankruptcy is an option that is available to fishermen and farmers. Some debtors may qualify for Chapter 11 bankruptcy if they have large amounts of outstanding debt or business-related debts.
Important Steps in California's Bankruptcy Process
Anyone who is considering the option to file for bankruptcy must complete a credit counseling course during the six months leading up to filing. This course must be taken through an agency that is approved in the state of California. The list of approved providers can be accessed here. It is also necessary to complete a debtor education course once the bankruptcy process is in motion. A list of approved providers for this course can be accessed here. The bankruptcy process formally begins when a debtor files a petition with the court. A petition will activate something called an automatic stay. An automatic stay will prevent all creditors from making attempts to contact a debtor or collect unpaid debts. It is also necessary to complete a means test early in the bankruptcy process. This required test is used to determine a person's eligibility for bankruptcy. It is also used to determine which form of bankruptcy is appropriate. A debtor is required to submit details regarding their income, assets, liabilities and more as part of a means test. One other major requirement that must be fulfilled during the bankruptcy process is something called a meeting of creditors. A meeting of creditors provides creditors with the opportunity to prove that a debtor has nonexempt assets that can be turned over before remaining debts are discharged. In addition, creditors can question or object to the terms of any payment plans that have been set up under Chapter 13 bankruptcy cases.
A Look at the Bankruptcy Court in California
California's bankruptcy court is divided between the United States Bankruptcy Court for the Northern District of California, the United States Bankruptcy Court for the Central District of California, the United States Bankruptcy Court for the Eastern District of California and the United States Bankruptcy Court for the Southern District of California. The United States Bankruptcy Court for the Northern District of California has locations in Oakland, San Jose, Santa Rosa and San Francisco. The United States Bankruptcy Court for the Central District of California has locations in Los Angeles, Riverside, Santa Ana and the San Fernando Valley. The United States Bankruptcy Court for the Eastern District of California has locations in Sacramento, Fresno, Modesto and Bakersfield. The United States Bankruptcy Court for the Southern District of California is located in San Diego. The cost to file for Chapter 7 bankruptcy in California is $335. The cost to file for Chapter 13 bankruptcy is $310. A list of all of the fees that can be anticipated when filing for bankruptcy can be accessed here. The forms needed when filing for bankruptcy in California can be accessed here.