What Can You Do If You Can’t Find A Licensed Insolvency Trustee
If you are unable to get an LIT to accept your file, or if you cannot afford to hire an LIT, the OSB’s Bankruptcy Assistance Program may be able to help, provided that you:
- have contacted at least two LITs and tried to obtain their services
- are not, and have not recently been, involved in commercial activities
- are not required to make surplus income payments and
- are not in jail
A creditor is harassing me daily. What should I do?
Although the regulations differ slightly across Canada, there are limits on what creditors and collection agencies are allowed to do. For example, they cannot make telephone calls of such a nature or frequency that they amount to harassment of you or your family. In addition, there are certain times when they are not allowed to call.
Tips for dealing with collection agencies If you feel you are being harassed, contact either an LIT or a qualified and experienced credit counsellor. They can help you by serving as an intermediary between you and your creditor.
and we will send you some information and a list of LITs who participate in the program.
California Chapter 7 Bankruptcy Credit Counseling And Debtor Education Courses
When you file for bankruptcy relief under Chapter 7 bankruptcy, you must complete two bankruptcy courses to receive a bankruptcy discharge. This includes a credit counseling course prior to filing a bankruptcy case, and a debtor education course after filing. See below the approved courses for California
The United States Trustees office has approved state-specific companies that offer bankruptcy courses. You can access a list of companies in California offering bankruptcy courses on the UST website. Both courses are available online for a small fee.
What Happens When You File Chapter 7 Bankruptcy In California
No one opens a business expecting that it will fail, but the data can be grim. According to the U.S. Bureau of Labor Statistics, about 20% of small businesses fail within their first year of operations by year five, roughly 50% have shuttered.
When your small business fails, you can be on the hook for thousands of dollars or worse, saddled with insurmountable debt. Are you stuck with that financial burden forever?
Whether youre a business owner who has decided to close up shop or an individual whose debts have simply become unmanageable, your liabilities do not have to hang over your head for the rest of your life.
Bankruptcy is designed to help people and businesses resolve their debts so they can start anew.
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S For Filing Bankruptcy
Bankruptcy means test: You will first have to complete this test to determine if you even qualify for a form of bankruptcy. If you do, you may proceed. If you do not, there might be other options available to you. Contact us to learn more.
Gather documentation: There are a few things that you want to itemize to make this process smoother. If you cannot locate some items, you should work with a professional attorney to figure out what is missing.
- Major transactions for the last two years
- Monthly expenses
Chapter : How It Works
Also known as a liquidation bankruptcy, Chapter 7 allows the debtor to discharge, or eliminate, all debts owed that are eligible for discharge. Under bankruptcy laws, some debts can only be discharged under limited circumstances. Some of these include:
While all eligible debts are eliminated, in rare cases, some of the debtors assets may be subject to sale by the Trustee to satisfy those debts. Assets that are exempt, or protected from sale, include:
- retirement accounts such as pension, profit sharing and stock bonus plans, IRAs, and deferred compensation plans such as your 401 account
- your homestead up to certain equity limits
- your primary vehicle
- any single household item that is worth less than $675 . Chances are that this is the last place the Trustee will look to for assets because of the time and expense of having each item appraised but it is still legally an option.
Note that Chapter 7 is reserved for those most in need of debt relief, so youll have to qualify in order to use this chapter.
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Bankruptcy Exemptions In Newfoundland And Labrador
- Food and fuel required by you and your dependants for 12 months
- Clothing for you and your dependants up to $4,000
- Household furnishings and appliances up to $4,000
- One motor vehicle up to $2,000
- No limit on medical and dental aids for you and your dependants
- Items of sentimental value up to $500
- All pets are exempt from bankruptcy
- Up to $10,000 of equity in your home
- Tools of your trade or business up to $10,000
- Certain income and pension plans
Protecting Your Property In A California Bankruptcy
Monopolyautomatic stay
- Utility shutoff
- Eviction
Typically, the automatic stay stays in effect until the judge closes the case. Moneylenders can only bypass the stay in very limited situations. And if they try to do so, a bankruptcy attorney knows how to stop them.
At the end of the case, the judge discharges most unsecured debts. Certain obligations, such as back taxes and alimony, are only dischargeable in some situations.
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Gather The Necessary Documents
As with other legal proceedings, the court will require certain information from you to get the process started. Here is some of the information that you will need available to file your petition:
- valid identification, which can include a drivers license, Social Security card, or birth certificate
- a listing of all bank accounts in which you have an interest
- a listing of all insurance policies that could result in a claim by or against you
- all tax returns filed within the last two years
- proof of ownership of any valuable assets that you own
- proof of your income for the previous six months. Even if you are currently unemployed, any money that you have made within the last six months must be submitted to the court. The best evidence of this is usually pay stubs and
- any evidence of your particular circumstances. The need to file bankruptcy can arise from many sources. If a divorce or an unusual expense such as medical care has been a significant cause of your financial situation, any documents that prove these events should be submitted to the court.
Your Creditors May Hold A Meeting
Sometimes, a meeting of creditors is required or requested. The purpose of this meeting is to
- allow creditors to obtain information about the bankruptcy
- confirm the appointment of the LIT
- appoint up to five inspectors to supervise the administration of your estate and
- allow creditors to give direction to the LIT.
If a meeting is called, you will be required to attend.
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Can I Create A Lien On My Own Home
In a word, no. A homeowner cannot slap a lien on his or her own home just before filing for bankruptcy in the hope that this will reduce equity to below the homestead amount. This may be considered a fraudulent transfer or preference unless a preference defense applies. This is due to the fact that a homeowner cannot have a trust deed on his or her own home based on the doctrine of merger. 30 Cal. Jur. 3d Estates § 8.
Chapter 11 Bankruptcy In California
Chapter 11 bankruptcy is a way for corporations to reorganize and restructure their debt. It’s a way to help businesses survive and get a new start. Here’s an overview of this type of bankruptcy. If you are a small business needing to restructure your debt, contact Mohsen Parsa, a trusted attorney in Los Angeles and Orange County, to discuss your financial situation and determine what’s the best next step for you.
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So How Do I Qualify For Chapter 7 Bankruptcy In California
Chapter 7 bankruptcies are intended for people who cannot afford to pay any portion of their debts. However, you must first pass an income evaluation to qualify for a bankruptcy discharge in Chapter 7.
If you pass the California bankruptcy means test , you can erase most unsecured debts through Chapter 7. Unsecured debts discharged in Chapter 7 include medical bills, personal loans, some old income tax debt, old utility bills, credit card debts, and most personal judgments. Unsecured creditors hold debts that are not secured by collateral.
Your Consultation With Your Bankruptcy Trustee
If you are uncertain if you are eligible for bankruptcy then we suggest you contact your Local Bankruptcy Canada Trustee and ask them to review your situation. Consultations are free and most people find them helpful.
When you meet with your trustee, not only will they determine whether or not your are eligible for bankruptcy, they will also help you answer the question: Should you file for bankruptcy?
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Bankruptcy Exemptions In Nova Scotia
- No limit on clothes for you and your family
- No limit on fuel and food for your family
- Up to $5,000 in household furniture and appliances
- One motor vehicle up to $6,500
- All medical and health aids for you and your family
- Farm equipment, fishing nets, or other tools of your trade up to $7,500
- No limit on grain and seeds or livestock for domestic use by you and your family
For more information on bankruptcy exemptions in Nova Scotia, speak to a local Licensed Insolvency Trustee.
Nunavut bankruptcy exemptions
In Nunavut, property exempt from seizure in bankruptcy is set by the territorial government and applies to the equity in an asset. Equity is the difference between the value of the asset and what you owe on the asset.
Can I Claim A Homestead If Only My Former Spouse Lives At The Property
Sometimes, the debtor is separated from or divorced from their spouse or former spouse, but seeks to claim a homestead in the property they moved from. The law was explained by one court as follows:
It is Section 704.720 that creates the residual, potential benefit of a homestead exemption for individuals in positions similar to that of the debtor: those who no longer reside in the homestead and who may be either separated or divorced from a spouse, or former spouse, who still resides in the homestead. The Section states in pertinent part: f a judgment debtor is not currently residing in the homestead, but his or her separated or former spouse continues to reside in or exercise control over possession of the homestead, that judgment debtor continues to be entitled to an exemption under this article until entry of judgment or other legally enforceable agreement dividing the community property between the judgment debtor and the separated or former spouse, or until a later time as specified by court order. Cal. Civ. Pro.Code § 704.720 .
In re Clark, No. 10-23496-RAG, 2012 WL 3597410, at *3 , affd sub nom. Clark v. Guttman, No. CCB-12-2673, 2013 WL 812017 .
In fact, Ninth Circuit law allows a current or former spouse to file their own bankruptcy to claim a homestead, even after their current of former spouse already filed claiming a lower homestead exemption. See In re Steward, 227 B.R. 895 .
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Print Your Bankruptcy Forms
Once you have taken credit counseling, collected your documents and completed your California bankruptcy forms, and made a game plan on how to handle the filing fee, youâre ready to officially begin the process of filing Chapter 7 bankruptcy in California.
If you completed all documents on your computer, print everything out twice so you have a copy for your own files. If youâre filing without any help, remember there are a lot of different forms that make up the full filing package, so having a checklist will come in handy.
California Code Of Civil Procedure Section 704730 Californias Homestead Exemption Statute
Effective January 1, 2021, California Code of Civil Procedure Section 704.730 now reads:
The amount of the homestead exemption is the greater of the following:
The countywide median sale price for a single-family home in the calendar year prior to the calendar year in which the judgment debtor claims the exemption, not to exceed six hundred thousand dollars .
Three hundred thousand dollars .
The amounts specified in this section shall adjust annually for inflation, beginning on January 1, 2022, based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations.
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What Does It Cost To File A Bankruptcy Case In California Attorney Mark Markus
Contents
Household Furnishings Apparel Personal Effects
These items are exempt if they are ordinarily and reasonably necessary to, and personally used or procured for use by, the judgment debtor and members of the judgment debtors family at the judgment debtors principal place of residence. Cal. Code Civ. Proc. 704.020. However, if an item is not ordinarily found in a household or it has extraordinary value, it may not be exempt.
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Will I Lose My Belongings If I File Chapter 7 Bankruptcy Understand California Bankruptcy Exemptions
Bankruptcy exemptions protect the equity in your property in a bankruptcy case. Likewise, property not protected by bankruptcy exemptions may be sold in a Chapter 7 liquidation case. Note also that for Chapter 13 cases, non-exempt equity in the property can increase the bankruptcy plan payment.
The most important asset most people like to protect is their home. See the California bankruptcy homestead exemption below.
The homestead exemption is often broken down by age and whether you are married.
- Single and under 65: $600,000
- Single is 65 or older: $600,000
California specific homestead bankruptcy exemption text: “New Language as of January 1, 2021: Gavin Newsome signed into law the Assembly Bill CA 1885 that passed on September 18, 2020, the updated language: 704.730. The amount of the homestead exemption is the greater of the following: The countywide median sale price for a single-family home in the calendar year prior to the calendar year in which the judgment debtor claims the exemption, not to exceed six hundred thousand dollars . Three hundred thousand dollars . The amounts specified in this section shall adjust annually for inflation, beginning on January 1, 2022, based on the change in the annual California Consumer Price Index for All Urban Consumers for the prior fiscal year, published by the Department of Industrial Relations.”
It is important to review additional California bankruptcy exemptions and choose those exemptions that best protect your assets.
Which One Should I Choose
Chapter 7 is, by far, the more popular form because its cheaper, quicker and effective at relieving responsibility for debt if you qualify! And thats a big if. You must pass a means test, meaning your disposable income is under the median income in your state. If you dont qualify for Chapter 7, you can always fall back on Chapter 13.
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Means Test Options: Median Income Vs Full Means Test
To be eligible to file for bankruptcy under Chapter 7, you must satisfy the Means Test. The easiest way to qualify for Chapter 7 is to have an income below the state median. Even debtors whose household income is above the state median may qualify for Chapter 7 by going through the more thorough, full Means Test.
Can I File A Different Chapter Of Bankruptcy After My First Bankruptcy
In the instance that you would like to file a different type of bankruptcy the second time around, the rules will differ:
Chapter 7 then Chapter 13: Consumers must wait four years from the original filing date of a successful Chapter 7 case to be eligible for a discharge under Chapter 13 in a second bankruptcy.
Chapter 13 then Chapter 7: Consumers must wait six years from the original filing date to be eligible for a Chapter 7 discharge. Exceptions may be granted on a case-by-case basis if 70% of the debt from the Chapter 13 repayment plan has been satisfied or you attempted the plan in good faith.
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A Chapter 13 Bankruptcy In California
For those who make above the income limit for Chapter 7, debt relief can still come through a filing a Chapter 13 bankruptcy. A Chapter 13 Bankruptcy in California case allows you to restructure your debts into an affordable monthly plan. By restructuring debts, many people can afford to keep their homes and vehicles under Chapter 13.
Chapter 13 stops foreclosures, repossessions, and wage garnishments. Chapter 13 bankruptcy also allows you to pay back mortgage payments, past-due car payments, and tax debt over three to five years through a bankruptcy plan. In addition, California may also allow you to reduce unpaid child support and alimony. However, you must resume your normal domestic support payments to remain in Chapter 13.
In a Chapter 13 plan, some debtors can lower their car loan payments and erase second mortgages, if they meet certain requirements.