If you need to file bankruptcy in California, it is important that you know what the process is. Each state will have a different process and you need to be aware of this. There are certain laws that affect how you file for bankruptcy in California that you should know about and certain documents that are required.
The 2005 Bankruptcy Act Credit Counseling And Means Test to File Bankruptcy In California
All individual debtors in California who want to file bankruptcy will have to have credit counseling within the 6 months before they file. They will also be required to complete a financial management instruction course after they have filed. The means test of the Bankruptcy Act will analyze your income and expenditure to determine if you qualify for Chapter 7 bankruptcy or if you have to file Chapter 13.
For the means test, the court will look at your monthly income in the 6 months leading to your filing and compare this to the average income for the state of California. If your income is below the median, you will be eligible for Chapter 7 bankruptcy. If your income is more than the median additional tests will be completed to determine if you can file for Chapter 7 or if you have to file Chapter 13 bankruptcy.
The Documents You Need
To file bankruptcy in California, you will need to itemize all your income sources. You will also need to create a listing of all major financial transaction for the past 2 years, your monthly expenses, your debts both secured and unsecured as well as any property and assets you have. You should also look at getting copies of your tax returns for the past 2 years and any documents showing your assets or debts. This will include deeds to property and documents for loans.
File Bankruptcy In California Important Points
Once you have all the documentation, you will need to determine which of your property could be exempt from seizure based on exceptions in California law. It is recommended that you consult with bankruptcy attorney moreno valley at this point because they will know which properties would be exempt. Once you know this, you or your attorney can file for bankruptcy by completing a 2-page petition and additional forms at the California district bankruptcy court.
The forms you need to complete are called the schedules. They will ask you to describe your financial status and financial transactions for the last 2 years. It is important that you are completely honest when completing these forms as your petition could be jeopardized if the court or your creditors find out you have lied.
If you are filing for Chapter 13 bankruptcy, you will need to include a potential repayment plan with your schedules. The plan will need to include the amount each month that you will have left to repay your debts as well as how the money will be split. Priority claims such as child support and taxes must be paid in full while unsecured debts can be paid in part.