The Chapter 13 Process
The Chapter 13 filing process generally takes 95 days from the filing of the petition to the approval of the repayment plan. But the bankruptcy wont actually be discharged until the three- to five-year plan is completed.
Heres what to expect over a typical Chapter 13 bankruptcy proceeding.
- A list of creditors and how much is owed to each
- Evidence of income
Filing Chapter 7 Bankruptcy
Chapter 7 bankruptcy has the benefit of allowing you to keep some of your property, that is determined to be exempt. Also, unlike a chapter 13 bankruptcy, no repayment plan has to be filed, but any nonexempt assets that the debtor holds will be sold off or liquidated in order to repay any claims from creditors. For a chapter 7 bankruptcy, unemployment can be an advantage. The laws in California do not state that you must have a job or income in order to file for a chapter 7 bankruptcy.
If you are receiving unemployment compensation, these funds will count as a portion of your income, along with any income incurred within the past six months prior to filing a bankruptcy claim. But, also consider that the courts will apply a means test, which is used to determine if your income is within the limits for a chapter 7 filing, and also to gauge your ability to repay debtors . Sometimes, the additional unemployment income may disqualify the debtor for a chapter 7 case. Thats why it is always best practice to obtain an experienced bankruptcy attorney in LA to help you determine the best way to proceed when filing for bankruptcy in California.
After The Case Is Filed
Once filed, a Chapter 7 marches fairly predictably to discharge. Most cases get a discharge in 3-4 months.
The debtors obligations after filing are few: show up at the 341 meeting, and complete the post bankruptcy education class.
Chapter 13 is different: 13 is a payment plan stretching over 3-5 years. The discharge comes when the plan payments are complete.
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Pros Of Filing For Bankruptcy
Its important to note that bankruptcy filings are not an easy way to avoid paying for credit cards, paying off student loans or child support, or get a fresh start immediately. Theres a much more complicated process that everyone must follow carefully if they want to take care of their debt/credit with a bankruptcy discharge. In essence, its vital to know the pros and cons of filing for bankruptcy in California.
Here is a list of some of the most common benefits of filing bankruptcy:
Does Every Debt Get Discharged
Most debts are discharged , including the following:
A debtor may have all of the debts denied a discharge if the debtor is not honest and cooperative in the bankruptcy process. A creditor that has a secured lien on property may foreclose on that lien even after a discharge, however some liens may be removed in the bankruptcy process if the debtor makes a motion to the Court for that relief.
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How Long Does It Take To File Bankruptcy In California
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You can count on a typical chapter 7 bankruptcy case taking four to six months from the time you file to the time you get your discharge. You can take it as soon as you receive your bankruptcy case number.
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Chapter 13 Bankruptcy Considerations
While you dont technically need a job to file a chapter 13 bankruptcy in California, unemployment can prevent a successful outcome. Chapter 13 allows the debtor have a three to five year repayment plan that is more beneficial for the debtor. Unlike chapter 7, this will give the debtor the option of keeping their home and other assets while paying back a reduced portion of debt.
For some individuals, Chapter 13 may not be the best route because your limited unemployment income, any rental income, and social security benefits will all be used to make the monthly payments to the bankruptcy trustee. With that said, before the courts will grant a chapter 13 filing, you must demonstrate that you will have enough income to afford your repayment plan before your case is approved.
If you are unemployed and are considering filing for bankruptcy in California, contact Oaktree Law for a free evaluation of your case and counseling on the best debt relief options for your individual case. Our skilled attorneys are nationally recognized and will stand by you to see your case to a successful end.
I can say nothing but good things about the whole staff, easy to work with and spot on.
Richard L., San Diego
Debra T., Santa Ana
Isela H., Whittier
Daysi & Family, Northridge
Fantastic firm. Made me feel very safe in their hands.
Rachel H., Long Beach
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Southern District Of California Requirements
Bankruptcy filers can get instruction packets for free on the court’s website and Local Form 1901 lists all the Chapter 7 bankruptcy filing requirements for individuals.
This district covers the southernmost counties in California: San Diego County and Imperial County and houses a single bankruptcy court building in San Diego. The Southern District also holds 341 meetings in El Centro.
Your Credit Will Take A Hit
Bankruptcy can have a more severe negative affect on your credit than mere missed payments. A Chapter 13 bankruptcy will appear on your credit reports as a derogatory mark for seven years from the date you filed the petition. The number of points your will drop will vary depending on your current scores and other factors relating to your financial situation. For more on this, check out our article on how to build credit after a bankruptcy.
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Finding Alternatives To Bankruptcy
Experienced California Bankruptcy Lawyers
Have you previously filed for bankruptcy relief and are now wondering if you are eligible to file again? The attorneys at Resnik Hayes Moradi LLP can help. Call 344-0043, orcontact our firm online to arrange a free consultation.
Our bankruptcy professionals meet with clients from 7:00 a.m. to 7:00 p.m., Monday through Friday. Weekend appointments are also available.
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Paying Debt More Comfortably
When you file for bankruptcy, its because you cant keep paying your debt/loan. In these cases, the creditor must settle for any payment type they can receive. In the case of Chapter 7, the person can get all their disposable income liquidated to pay off the debt or loan taking that into consideration, the person would not have to pay credit card debt or a small loan balance back.
What Is A Discharge In Bankruptcy
A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.
Although a debtor is not personally liable for discharged debts, a valid lien that has not been avoided in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.
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What Can The Debtor Do If A Creditor Attempts To Collect A Discharged Debt After The Case Is Concluded
If a creditor attempts collection efforts on a discharged debt, the debtor can file a motion with the court, reporting the action and asking that the case be reopened to address the matter. The bankruptcy court will often do so to ensure that the discharge is not violated. The discharge constitutes a permanent statutory injunction prohibiting creditors from taking any action, including the filing of a lawsuit, designed to collect a discharged debt. A creditor can be sanctioned by the court for violating the discharge injunction. The normal sanction for violating the discharge injunction is civil contempt, which is often punishable by a fine.
Do You Qualify For Chapter 7 Bankruptcy
To qualify for Chapter 7 bankruptcy you:
Must pass the means test, which looks at your income, assets and expenses.
Cannot have completed a Chapter 7 in the past eight years or a Chapter 13 bankruptcy within the past six years.
Cannot have filed a bankruptcy petition in the previous 180 days that was dismissed because you failed to appear in court or comply with court orders, or you voluntarily dismissed your own filing because creditors sought court relief to recover property they had a lien on.
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Are All Of The Debtor’s Debts Discharged Or Only Some
Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523 of the Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons .
There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13.
Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523 applies. The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.
Estimate Whether You Will Qualify For Chapter 7 Bankruptcy In California
As stated above, you often have to qualify to file Chapter 7 bankruptcy. Qualification is based on US means testing. The means testing is based on the household income and size of the household for California.
Bankruptcy Means Test In California
The bankruptcy means test in California often changes every 6 months. To help, we built the following bankruptcy means test calculator to help you estimate qualification, understand the cost and compare bankruptcy alternatives.
California Chapter 7 Bankruptcy Income Limits
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Protecting Property With Exemptions
You don’t lose everything you own when you file for bankruptcy. Bankruptcy exemption laws tell you the type and amount of property you’ll be able to protect. If you’ve lived in several states before filing, the set of exemption laws you’ll use will depend on where your “domicile” was before the bankruptcy.
Find out more about the two most common types of bankruptcy.
How Does The Debtor Get A Discharge
Unless there is litigation involving objections to the discharge, the debtor will usually automatically receive a discharge. The Federal Rules of Bankruptcy Procedure provide for the clerk of the bankruptcy court to mail a copy of the order of discharge to all creditors, the U.S. trustee, the trustee in the case, and the trustee’s attorney, if any. The debtor and the debtor’s attorney also receive copies of the discharge order. The notice, which is simply a copy of the final order of discharge, is not specific as to those debts determined by the court to be non-dischargeable, i.e., not covered by the discharge. The notice informs creditors generally that the debts owed to them have been discharged and that they should not attempt any further collection. They are cautioned in the notice that continuing collection efforts could subject them to punishment for contempt. Any inadvertent failure on the part of the clerk to send the debtor or any creditor a copy of the discharge order promptly within the time required by the rules does not affect the validity of the order granting the discharge.
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Understand The Differences Between Chapter 7 And Chapter 13
Chapter 7 and Chapter 13 bankruptcy are the most common consumer bankruptcy filed in the United States. You need to know the difference because one chapter is more expensive and also often takes much longer.
Chapter 7 Bankruptcy in California
A Chapter 7 bankruptcy is referred to as liquidation bankruptcy. In many cases, bankruptcy filers do not lose their home or vehicle by using bankruptcy exemptions. We will cover how your belongings may be at risk below.
Heres what you need to know about filing Chapter 7 bankruptcy in California.
Chapter 13 Bankruptcy in California
A Chapter 13 bankruptcy is known as a wage earners plan. In many cases, you will pay back a portion of your unsecured debts in a payment plan.
Heres what you need to know about filing Chapter 13 bankruptcy in California.
For more information, you may consider reading, Is it better to file Chapter 7 or Chapter 13? and Is Chapter 13 Worth It? You should also consider the pros and cons of bankruptcy.
Why File For Bankruptcy
The simple answer is to have certain debts discharge completely or to enter into a payment plan to pay all or some of these debts. The debtor may be able to protect property from collection by unsecured creditors may be able to eliminate liens on property secured by debt or may be able to simply get some breathing room to halt such actions as repossessions, garnishments, attachments, utility shutoffs, foreclosures or evictions.
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In Chapter 13 Its Three To Five Years
How long does it take to file bankruptcy in california. More simply said, for most people this is for at least 91 days. Before living in texas, you lived in california for five years. Although chapter 7 is a liquidation bankruptcy, filers are able to keep all their property in more than 90% of all consumer bankruptcy cases in the united states.
Under the 2005 bankruptcy act your income and expenses will be analyzed to determine if you qualify to file a chapter 7 or if you must file chapter 13. When i worked for a bankruptcy attorney i’d say it generally took most clients an average of about 2 months from the first meeting with an attorney until the day they were ready to file the bankruptcy. Every client filing bankruptcy asks that question:
Otherwise, your case will get dismissed and you wont receive a discharge wiping out your debt. You can count on a typical chapter 7 bankruptcy case taking four to six months from the time you file to the time you get your discharge. In a chapter 7, filing to discharge is about four months
They will then look at the six months leading up to that june 1st and see where you were living for. How long does chapter 13 take? Curious, how long will it take from start to finish for a bankruptcy in california?
This is a restructuring of the debt an individual owes along with a plan to repay it in 3 to 5 years. Total time for california foreclosure: You can file bankruptcy under chapter 7 once every 8 years.