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How To File Chapter 7 Bankruptcy In California

Chapter 7 Bankruptcy California Income Limits

Do I qualify for a California chapter 7 bankruptcy MUST SEE!

The California median income figures for the Means Test are adjusted periodically, based on IRS and Census Bureau data. California median income for bankruptcy cases filed on or after May 15, 2021, is:

# of People
9 $151,530

For California households with more than 9 members, add $9,000 for each additional family member. You should always double-check the US Trustees website for the most current figures when calculating the Means Test.

What Are You Getting For Your Money

We all like to think that all attorneys and doctors are equally competent, but it is simply not true. There are good doctors and hopelessly bad doctors and the same is true of attorneys. Im not suggesting that just because an attorney charges lower fees that he is incompetent. I merely point out that the overriding decision on who to select should not be based solely on the fees charged.

There are a lot of bankruptcy attorneys out therejust like there are a lot of doctors. What amazes me is that people would almost never go to a doctor who charges bargain basement prices for something serious.

Wouldnt that make you skeptical?

So, why would you do that with an attorney who is essentially helping your financial future? I dont know the answer to that, but I get all kinds of calls from people who are trying to discharge $50,000 or more debt and will go elsewhere to save $200 on the attorneys fees.

Those same people, and others, often return to me later after filing their bankruptcy with an incompetent attorney or paralegal and then want to hire me to fix the problems, if possible .

How Often Can You File Bankruptcy

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In a Nutshell

You can file more than one bankruptcy in a lifetime. How many times depends on how long it’s been since your last bankruptcy case and what type of bankruptcy you filed. We’ll break it down for you.

Written byAttorney Andrea Wimmer.

Have you filed bankruptcy in the past but are faced with a financial situation that you canât resolve despite your best efforts? If youâre facing a possible wage garnishment due to unexpected medical bills, unpaid tax debts, or any other type of debt youâre no longer able to pay, you can ask the court for bankruptcy protection a second time.

Know that youâre not alone. A 2006 paper on a found that 8% of bankruptcy filers end up filing bankruptcy again. The 2005 changes to the Bankruptcy Code, intended to reduce overall filings, have not had much of an impact on this number.

Bankruptcy is a legal way for individuals who can no longer afford to pay their debts to get permanent debt relief through a bankruptcy discharge. The Bankruptcy Code provides for three types of consumer bankruptcies known as Chapter 7 bankruptcy, Chapter 11 bankruptcy, and Chapter 13 bankruptcy.

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Make The Bankruptcy System Work For You

People often think of bankruptcy as a dirty or shameful word, but this could not be further from the truth. Bankruptcy is a legitimate way to clear your debts and begin again with a clean slate.

Business owners, especially, should not be afraid to use these tools. As the U.S. Bureau of Labor Statistics says, a closed business is not an anomaly. Bankruptcy does not equal failure it allows former business owners to move on with their lives and try something new.

Keeping Your Property In Bankruptcy

Chapter 7 Bankruptcy

One of the most common questions people ask before filing for bankruptcy is, can I keep my property? The short answer is that it depends on the type of bankruptcy you file , along with the type of property and the value of said property at the time of the bankruptcy. We previously wrote about the differences between Chapter 7 and Chapter 13 bankruptcy. In this article, we will discuss what real or personal property can be kept when filing Chapter 7 or Chapter 13 bankruptcy.

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Wrapping It Up What Happens After Filing For Bankruptcy

You can expect your creditors to stop bothering you once you have filed for bankruptcy. It might take several days before the court informs your creditors about the automatic stay order preventing them from asking you to pay. Once this takes place, you:

  • Hand over your financial documents proving the legal statements made in your filed paperwork.
  • Attend the mandatory 341 meeting of creditors
  • Complete the necessary debtor education and credit counseling course. From here, you need to file the completion certificate.

All of these steps need to take place before you gain a Chapter 7 discharge. Chapter 13 filers are also required to attend a repayment hearing and complete this payment plan to receive their discharge in Los Angeles.

Bankruptcy law can be complex, which is why its always best to hire an attorney in Los Angeles. We can help. Contact us today to learn why you need a bankruptcy lawyer now!

California Bankruptcy Process How To File Bankruptcy In California

2005 Bankruptcy Act Credit Counseling The 2005 Bankruptcy Act requires all individual debtors who file bankruptcy on or after October 17, 2005, to undergo credit counseling within six months before filing for bankruptcy relief and to complete a financial management instructional course after filing bankruptcy.

2005 Bankruptcy Act Means TestUnder 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. To apply the means test, the courts will look at the your average income for the 6 months prior to filing and compare it to the median income for California. If the income is below the median, then you may choose Chapter 7. If your income exceeds the median, the remaining parts of the means test will be applied to determine if you can file Chapter 7 or if you must file Chapter 13.

Gathering PaperworkTo begin the bankruptcy process you must itemize your current income sources major financial transactions for the last two years monthly living expenses debts and property . You should also collect your tax returns for the last two years, deeds to any real estate you own, your car titles, and the documents for any loans you may have.

The cost for filing a Chapter 7 bankruptcy is $306. This fee may not be waived but you may be able to pay it in installments. The fee of $281 for a Chapter 13 bankruptcy cannot be waived.

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Qualifying For Bankruptcy In California

If you’ve never filed for bankruptcy before, you’ll meet the initial requirement. Otherwise, check whether enough time has passed to allow you to file again. The waiting period varies depending on the chapter previously filed and the chapter you plan to file. Learn more about multiple bankruptcy filings.

You’ll also need to meet specific chapter qualifications.

You’ll qualify for Chapter 7 bankruptcy if your family’s gross income is lower than the median income for the same size family in your state. Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee’s website .

Want an easy way to do this online? Use the Quick Median Income Test. If you find that you make too much, you still might qualify after taking the second part of the “means test.” If, after subtracting expenses, you don’t have enough remaining to pay into a Chapter 13 plan, you’ll qualify for Chapter 7.

Qualifying for Chapter 13 can be an expensive proposition because the extra benefits come at a hefty price, and many people can’t afford the monthly payment. To qualify, you’ll pay the larger of:

Alternatives To Chapter 7

What to expect in a Chapter 7 Bankruptcy

Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.

In addition, individual debtors who have regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. A particular advantage of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to “catch up” past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707.

Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.

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Recovery Of Preferential Payments

Payments made to or on behalf of any relatives within twelve months prior to filing your bankruptcy case are recoverable by the Trustee in your case.

Thats right.

If you repaid money during that period to your brother, or made payments on a credit card that your mother let you use, they may have to pay back that money to the Bankruptcy Trustee.

The Trustee will then distribute it equally to all your creditors.

This is one of the biggest mistakes people make, often innocently, because they dont know they will be filing a bankruptcy.

But thats the law.

Its designed to prevent debtors from preferring one creditor over another.

The same is true for non-relatives, although the lookback period for them is only ninety days.

How To File Bankruptcy In California: A Complete Checklist

The concept of erasing debt sounds fantastic but you might be unaware of how exactly to file bankruptcy. Understanding what is required of you and what debt relief you could gain helps see whether this process is worthwhile or not. Here are the significant steps you need to consider when partaking in your bankruptcy journey:

  • Consider what chapter you would like to file. Its always a good idea to learn about Chapters 7 and 13.
  • Check to see what debt you can erase when you file for California bankruptcy.
  • Find out if you can keep your property after you file bankruptcy.
  • Determine if you qualify.
  • Understand if it would be worthwhile to hire a bankruptcy lawyer.
  • Stop paying any qualifying debt.
  • Collect all the necessary bankruptcy forms and financial documents.
  • Undergo a credit counseling course.
  • Complete and file the necessary paperwork.
  • Hand over the required financial documents.
  • Attend the 341 creditors meeting.
  • Attend the necessary confirmation hearings and create payment plans .
  • File a debtors education course certificate and receive the debt discharge.

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Finn Construction Involved In Three Court Cases In Ventura County

Dating back to June of 2016, the bankrupt Finn Construction has been tied to three separate complaints in civil court, according to records from the Ventura County Clerks office.

The most recent complaint regarding collections was filed on July 29, 2019 by American Express against Finn Construction. One month later on August 29th, the case was dismissed.

On January 22, 2019, Granite State Insurance filed a complaint for collections. On March 22, 2019, Granite State Insurance received a judgment award of $24,014.94.

Finn Construction was also involved in an unlawful detainer case that was filed on June 3, 2016 from plaintiff SRGMFII Country Club Simi Valley LLC. According to Ventura County records, the plaintiff was awarded $4,130.40 via a judgement verdict on October 12, 2016.

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Qualifying For Chapter 7 Bankruptcy

What Is Chapter 7 Bankruptcy in California?

If a households gross income is less than the median income of the same-size family in Los Angeles, the debtor can qualify for Chapter 7 bankruptcy. To find out if you qualify, you can add your gross income earned in the last six months. From here, you should multiply this number by two. Compare this amount to the income charts found on the US Trustee website by selecting Means Testing Information.

In some instances, you might find that you make too much to qualify for Chapter 7. However, you can perform the second part of the means test by subtracting your expenses. After this, if you cant afford to pay with a Chapter 13 plan, you can qualify for Chapter 7 bankruptcy.

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Discharge In Prior Case

You are eligible to receive a discharge in Chapter 7 Bankruptcy even if you previously received a Chapter 7 Bankruptcy discharge, as long as the prior Chapter 7 case in which you received a discharge was filed at least eight years before the filing of your new Chapter 7 case.

You can also receive a Chapter 7 discharge in your current case if you previously filed for Chapter 13 Bankruptcy, so long as the prior Chapter 13 case in which you received a discharge was filed at least six years before the filing of your new Chapter 7 case.

Chapter 7 And Chapter 1: Know The Difference

Before we hop into the timing specifics, lets review the two types of personal bankruptcy available to you.

Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. With this type of filing, many of your debts can be eliminated through a discharge .

However, not all debts go away with a Chapter 7 filing. Student loans, child support, and certain tax debts are some examples of debts that dont go away with Chapter 7. Talk to your attorney to get more specifics on what debts are eligible for discharge.

Chapter 13 bankruptcy, also called a wage earners plan, doesnt actually get rid of your debts. It creates a more realistic payment plan that will allow you to keep your assets and continuing paying your debts. This plan only works if you have sufficient income to make the debt payments on the new plan.

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Central District Of California Requirements

One of the required documents in this district is a you received in the 60 day period before filing your California bankruptcy case. All required forms and their instructions are made available for free on the Central District of California court’s website.

The Central District of California is home to the largest bankruptcy court in the United States and has court locations in Los Angeles, Riverside, Santa Ana, Santa Barbara and in the San Fernando Valley. It stretches from the Central Coast area across the entire state to the state border. Folks filing for Chapter 7 bankruptcy in California who live in the counties of Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, Ventura, and San Luis Obispo will have their case heard in the Central District.

California Bankruptcy Exemptions And Law

How Do I Know if I Qualify for Chapter 7 Bankruptcy? Long Beach Bankruptcy Attorney Laura Claveran

By FindLaw Staff | Reviewed by Bridget Molitor, J.D. | Last updated April 14, 2021

Financial stress is an unfortunate part of life for most Americans. High credit card bills and other unsecured debts, like student loans, cause much of this stress. Delinquent secured debt accounts, like past-due mortgage payments, add to it. For many California families, filing bankruptcy is a way out.

The Bankruptcy Code offers a fresh start for honest yet unfortunate debtors like you. A voluntary petition enables families to retake control over their own finances. And with the help of a bankruptcy lawyer, most families quickly recover from bankruptcy, so they can move on with their lives.

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Can You File Bankruptcy If You Are Unemployed In California

If you are unemployed and are considering filing for bankruptcy in California, there are considerations that can determine if your bankruptcy filing is successful, or not. Being unemployed means your funds are limited, and filing bankruptcy seems like a sound financial move. But, because some courts may consider unemployment compensation as income, instead of being excluded as social security income it is best to obtain the services of an experienced bankruptcy attorney in LA, to determine your best course of action.

At issue is whether the court that accepts your bankruptcy filing believes that Federal mandates enacted by Congress should take the greater authority in these cases, or if they are willing to consider legislative intent and apply a case by case ruling. In either case, if you are unemployed, it is to your advantage to consult with a lawyer to discuss your options in the state of California.

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