Ahhh… California. The land of movie stars, wineries, and Disneyland. But it can also be the land of debt. Rather than spending your precious days off visiting Mickey Mouse, walking in the steps of old Hollywood, and wandering up and down the hills of San Francisco, you may instead be dodging creditors. Don’t let your debt pile up so high that you can’t enjoy the little things in life especially when your debt can be dissolved with a Chapter 7 Bankruptcy.
Get a Fresh Start in California Thanks to a Chapter 7 Bankruptcy
Creditors can wreak havoc on your paycheck and bank account, garnishing both to knock down your unpaid debt. They can damage your health too, since the stress of avoiding those that you owe money to and trying to live on what little is left after the garnishments are done can leave you with migraine headaches, nervous breakdowns and worse.
A Chapter 7 Bankruptcy, also known as a straight or liquid bankruptcy, because it wipes your slate clean, can solve these problems by wiping out most of your debt, leaving you with a clean slate. You’ll be able to stop hiding under your mountain of unpaid bills and start living (and enjoying) your life!
Think You Won’t Qualify California? Guess Again!
Filing for bankruptcy isn’t as easy as finding a lawyer and filling out a form. The entire process can take at around six months to complete the process, but once you file you won’t have to field phone calls from angry debt collectors in the meantime. (Your attorney will act as a mediator between you and your creditor during your Chapter 7 bankruptcy.
In order to qualify forChapter 7 in California, you must be at or under the following income limits or you must pass a means test:
- Family of 1 - $48,009
- Family of 2 - $62,970
- Family of 3 - $68,670
- Family of 4 - $78,869
- Family bigger than 4 - add $7,500 for each person
If you make more than the income levels listed in the table above, you still might be able to file for a Chapter 7 Bankruptcy thanks to the means test. According to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, if your income exceeds the specified limits for your state, your attorney can use the test to determine if your debts are excessive. This test uses a mathematical process with your fincanial information to determine your worthiness for bankruptcy. If your debts are high, you may still be able to file. If not, you may have to go with a Chapter 13 Bankruptcy.
Wait, What Gets Discharged and What Do I Need to File?
Debts like credit cards, medical bills and old tax debts, among others, will vanish once your Chapter 7 Bankruptcy is approved by the courts. However, some debts just can’t be discharged, no matter how low your income is and how well you qualify for a Chapter 7. These non-dischargeable debts include any alimony or child support, student loans, and certain types of recently filed tax debts or liens. Your bankruptcy lawyer will able to give you the specifics.
In order to file, you’ll need quite a few pieces of paperwork. Normally you’ll need to present your attorney with:
- Last year’s tax return, plus that of your spouse
- A list of every debt that you owe, whether they are dischargeable or not
- Past six months’ worth of your pay stubs
Your attorney will take all of this information and use it to fill out your Chapter 7 petition. The petition is a set of documents that is filed with the court. A judge and a trustee representing your creditors look it over to declare whether you can, indeed, go bankrupt.
You Can Keep Your Stuff Too!
Those considering bankruptcy like the idea of getting rid of debt, but what about all your assets and personal property? A common misconception is that you will have to get rid of everything you have ever worked for in your life. The Bankruptcy Reform and Protection Act put laws in place so that debtors filing Chapter 7 bankruptcy can keep some of their assets. Each state provides a specific type and amount that residents are allowed to keep. In California, bankruptcy laws are set up somewhat differently than most states.
There are two sets of exemption laws that debtors can choose from. In the first set debtors may claim the following exempt:
- Home: Up to $150,000 in value depending on age, marriage status, or disability.
- Automobile: Up to $2,300 in value for one vehicle.
- Group limit of the following items up to $6,075 in value:
- Jewelry
- Heirlooms
- Works of Art
- Personal property: All personal property including, household furniture, clothing and other personal effects are 100% exempt.
- Certain benefits - The following benefits are exempt from Chapter 7 bankruptcy:
- Unemployment
- Disability
- Worker’s compensation
- Social security
- Also some retirement plans and life insurance plan proceeds may also be exempt.
There is a second set of statutes that list similar assets; however, the amounts that are exempt vary. It is important to note that in California, married residents are not allowed to double up on exemptions. For the most accurate and up-to-date versions of the exemption laws, please see a California bankruptcy attorney.
Get back to enjoying the little things in life. Call an attorney today about bankruptcy, Chapter 7 to find out how you can free yourself from your debt once and for all.
California Bankruptcy Courts
Robert E. Coyle United States Courthouse
2500 Tulare Street, Suite 2501
Fresno, California 93721
Phone: (559) 499-5800
Edward R. Roybal Federal Building and Courthouse
255 East Temple Street
Los Angles, California 90012-3332
Phone: (213) 894-3118
1200 I Street, Suite C
Modesto, California 95354-0836
Phone: (209) 521-5180
United States Courthouse
1300 Clay Street, 3rd Floor
Oakland, California 94612-1425
Phone: (510) 879-3600
Ninth Circuit Bankruptcy Appellate Panel
Richard H. Chambers Court of Appeals Building
125 South Grand Avenue
Pasadena, California 91105-1621
Phone: (626) 229-7220
Ninth Circuit Bankruptcy Appellate Panel
3420 TWelfth Street, Room 345
Riverside, California 92501-3801
Phone: (951) 774-1034
3420 Twelfth Street
Riverside, California 92501-3801
Phone: (951) 774-1000
Ronald Reagan Federal Building and
United States Courthouse
411 West Fourth Street
Santa Ana, California 92701
Phone: (714) 338-5300
Robert T. Matsui United States Courthouse
501 I Street, Room 3-200
Sacramento, California 95814-7300
Phone: (916) 930-4400
Federal Building
1415 State Street
Santa Barbara, California 93101-2511
Phone: (805) 884-4800
Jacob Weinberger United States Courthouse
325 West F Street
San Diego, California 92101-6017
Phone: (619) 557-5620
235 Pine Street, 19th Floor
San Francisco, California 94104-2716
Phone: (415) 268-2300
Robert F. Peckham Federal Building and United States Courthouse
280 South First Street, Room 3035
San Jose, California 95113-3002
Phone: (408) 278-7500
United States Courthouse
99 South E Street
Santa Rosa, California 95404-6517
Phone: (707) 547-5900
Warner Center
21041 Burbank Boulevard
Woodland Hills, Calfornia 91367-6609
Phone: (818) 587-2900