Bankruptcy in California
Filing for bankruptcy is often a good way to take control of your financial life, but tracking down the information you need can be tricky—especially for your particular state. In this article, you’ll learn about where to get the official bankruptcy forms, California means testing information, and credit counseling providers, as well as how to find your local California bankruptcy court. You’ll also learn about the property you can protect in a California bankruptcy.
Because bankruptcy is a form-driven area of law, you’ll disclose all aspects of your financial situation on official bankruptcy forms. Downloadable, fillable versions are on the U.S. Bankruptcy Court forms web page.
After filling out the bankruptcy forms, you’ll start the case by filing the paperwork in your local bankruptcy court (more below) along with a filing fee or fee waiver.
Although bankruptcy is governed by federal law, you’ll still use some California law and follow particular California procedures. Here’s what you need to know to complete the forms and file your matter.
California’s Bankruptcy Courts
California, being a large state, has four bankruptcy courts, most of which have multiple locations serving various geographical areas. Each office often has a webpage where you can access information about the following things:
the court’s hours, physical address, mailing address, and parking
fees and local forms required by the court
filing paperwork with the court clerk
the bankruptcy trustees, and
341 meeting of creditors (the hearing all filers must attend) locations.
Means Testing and Credit Counseling Information
Some state-specific information appears on the U.S. Trustee website: means testing figures and approved credit counseling providers.
Means testing information. Before you can wipe out debt in a Chapter 7 bankruptcy, you must meet income qualifications by passing the “means test.” You’ll provide your family income on the means test forms. If it exceeds the median income of your state, you can subtract particular expenses. The needed income charts and pre-set expense guidelines are on the U.S. Trustee’s website (select “Means Testing Information” in the left column). The same data gets used to determine the length and amount of a Chapter 13 bankruptcy payment. (More information can be found in What Is a Chapter 13 Bankruptcy Plan?)
Credit counseling providers. All consumer filers (but not business debtors) must take two credit counseling and debt management courses—one before filing and one afterward. To find approved providers, select “Credit Counseling & Debtor Education” from the left column and scroll down to your bankruptcy district.
California Bankruptcy Exemptions
You don’t lose all of your property when you file for bankruptcy. In fact, California is one of the few states that gives you two separate lists of assets you can exempt (protect). You can’t mix and match between the two exemption schemes, however, so you’ll want to scrutinize each and select the list that will work best for you.
If you have nonexempt property that you can’t protect with an exemption, the Chapter 7 bankruptcy trustee will sell it for the benefit of the creditors. In Chapter 13 bankruptcy, the debtor must repay creditors an amount equal to the nonexempt property value (and possibly more).
(Learn what property you can protect in California Bankruptcy Exemptions.)
Seek Legal Advice
This overview provides information needed in a bankruptcy case, but it isn’t an exhaustive list. Because each matter is unique, it’s prudent to meet with a knowledgeable bankruptcy lawyer.