Claiming bankruptcy in California is the same as in the rest of the U.S. as the Bankruptcy Court follows federal, not state law. As such, the process to be followed, and the forms to be filled in are the same. There are, however, a few small differences involving the exemptions and allowances for personal bankruptcy filings. This is due to California following state exemptions, rather than federal ones. Prior to filing bankruptcy in California, it would be wise to consult a qualified bankruptcy attorney who is familiar with state law, as well as with the U.S. Bankruptcy Code. If you are married or hold joint property, the process can become even more complicated as California is one of the nine Community Property States in the U.S.
The process of filing a traditional Chapter 7 liquidation bankruptcy in California starts with a Means Test that calculates your eligibility based on your income and expenses, compared to the median income in your area of residence. In California, the combined household income of both spouses will be used, not just the income of the individual opting for file for bankruptcy. If you do not have an excess of disposable income, you will be able to go ahead with a Chapter 7 filing, without having to consider a Chapter 13 repayment plan.
The state of California requires that all persons claiming bankruptcy in California complete a credit counseling course prior to filing. The certificate of completion must be included with all other paperwork and submitted upon payment of the non-refundable fee of $299. You will then have 45 days to complete a second mandatory financial education course before attending your Creditor’s Hearing, where any of your creditors may object to your bankruptcy petition. If no issues are brought forth, your bankruptcy should be finalized and your debts discharged a couple of months later.
The personal bankruptcy process is rather straight-forward; however it is always recommended to consult a qualified attorney who can best advise you how to minimize your loses and take advantages of all the benefits that claiming bankruptcy in California has to offer.
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