Bankruptcy: Debt Relief Agency
Trusts and Estate Practice
Bankruptcy Practice
Bankruptcy Practice
| LAW OFFICE OF ALICE H WARE |
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This page is provided as a resource to laws and Bankruptcy forms
require such legal advice, please contact our office.
require such legal advice, please contact our office.
WHAT CAN I DO IF I CAN'T PAY MY DEBTS? (State Bar of CA)
U.S. Bankruptcy Court - Eastern District of California
FTC "Facts for Consumers - Debt Collection FAQ's"
U.S. Federal Courts "Bankruptcy Basics", Chapter 7, and many more
resources
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| LAW OFFICE OF ALICE H WARE |
Filing for Bankruptcy in California
If you're consistently unable to pay your bills and do not foresee making good on your debts,
then you may want to consider filing bankruptcy. California provides consumers with several
methods for filing for bankruptcy. Although these won't waive all debt, they can reduce your
debt to a point where it becomes manageable.
The purpose of filing for bankruptcy is to allow those who can no longer make payments on
their debts to get a fresh start. This fresh start can occur in one of two ways: either by selling
off belongings to pay back some of these debts or by developing a repayment plan.
When filing for bankruptcy, California law states that some of your debts will remain and
cannot be "discharged." These debts include:
Under California statutes, there are primarily two types of bankruptcy that a consumer can
declare: Chapter 7 bankruptcy and Chapter 13 bankruptcy. There is also Chapter 12, which
is reserved for farmers and fishermen as defined under bankruptcy law, as well as Chapter 11.
I will focus on Chapter 7 Bankruptcy in this newsletter. In my next newsletter, I will provide
additional details regarding Chapter 7 and provide an overview of Chapter 11 and Chapter
13 bankruptcies.
California and Chapter 7 Bankruptcy
In California, Chapter 7 bankruptcy is when a trustee collects and sells your non-exempt
property and uses the proceeds to pay off your creditors. A creditor is someone to whom
you owe money. Non-exempt property can include a number of items including:
However, California has a very liberal wild card exemption as one of their plans and it
can be used to protect some, if not all, of these assets. The majority of Chapter 7
bankruptcy filings are known as "no-asset" cases, which means the debtor does not have any
non-exempt property to sell off.
Your Chapter 7 proceedings begin when you file a Volunteer Chapter 7 Petition with
Schedules with the proper California bankruptcy court. These documents must show all
your debts, including back taxes owed, your mortgage, and auto loans. You must also list the
names and addresses of all creditors and compile a list of all your assets.
Once these documents are filed, all creditors will immediately be put on notice to stop
collection attempts. The trustee then will collect any non-exempt assets you may have and
sell them to pay your creditors.
The 341 Hearing
After filing for bankruptcy in California, you must appear before all your creditors in what is
called the 341 hearing. This allows the trustee and the creditors to ask you any questions
regarding your debts and assets under oath.
California Exemption Schemes
California provides those filing for Chapter 7 with two exemption schemes. These schemes
allow you to keep certain assets. Although the following list is not exhaustive, the first
exemption scheme allows you to keep:
• Your home, depending on how much equity you have in the house
• Building materials to improve your home, up to a certain monetary limit
• Your motor vehicle, depending on the amount of equity in it
• Necessary appliances, furnishings, clothing and food
• Jewelry, family heirlooms, and art up to a certain amount
• Burial plots
• Health aids
• Alimony
• Government benefits, including:
The second exemption plan parallels the first, except monetary limits and equity limits are
different. In addition, the second scheme allots a certain amount of money as a wild card
exemption that can be used toward any property.
Monetary limits on these exemptions change over time. If you would like to know more
about these exemptions, you should contact our office: (916)-781-3355.
California and Chapter 11 and Chapter 13 Bankruptcies
In 2005, bankruptcy laws across the country underwent a dramatic change with the passage
of the Bankruptcy Abuse Prevention and Consumer Protection Act. This act set fairly strict
limits on who can and cannot file for Chapter 7. Under the act, if you cannot prove that you
are eligible to file for Chapter 7, then you may file for Chapter 11 or 13.
Chapter 13 bankruptcy allows a debtor to reorganize to pay off his or her debts over a span
of five years. To file for Chapter 13, you will need a stable income, as well as money left over
after basic necessities are paid for.
The court will then apply a test to determine how much money you can reasonably put
toward paying off your debts. Along with the necessary bankruptcy petition, you will also
need to file a five-year debt payment plan with the court. This plan must address the
repayment of priority claims, such as back taxes.
The court-appointed trustee will then review this plan and distribute it to your creditors who
may object to the plan.
Bankruptcy law does set monetary limits for those wishing to file Chapter 13. If your debts
exceed a certain threshold, you will not be able to file for Chapter 13. In such cases, you may
want to file for Chapter 11 bankruptcy. Often used by businesses, Chapter 11 allows debtors
who exceed the statutory limitations of Chapter 13 to reorganize their debts.
If you would like to know whether you and your family might benefit from a Bankruptcy
filing, call our office for a complimentary Chapter 7 consultation.
(916-781-3355)
If you're consistently unable to pay your bills and do not foresee making good on your debts,
then you may want to consider filing bankruptcy. California provides consumers with several
methods for filing for bankruptcy. Although these won't waive all debt, they can reduce your
debt to a point where it becomes manageable.
The purpose of filing for bankruptcy is to allow those who can no longer make payments on
their debts to get a fresh start. This fresh start can occur in one of two ways: either by selling
off belongings to pay back some of these debts or by developing a repayment plan.
When filing for bankruptcy, California law states that some of your debts will remain and
cannot be "discharged." These debts include:
- Alimony as a result of a divorce decree
- Child support
- Your most recent back taxes if any are owed
- The majority of student loans
- Payments for luxury goods that exceed $550 and were purchased within 90 of filing
- Any fines or penalties owed to government agencies
- Cash advances of more than $825 made within 70 days of filing
Under California statutes, there are primarily two types of bankruptcy that a consumer can
declare: Chapter 7 bankruptcy and Chapter 13 bankruptcy. There is also Chapter 12, which
is reserved for farmers and fishermen as defined under bankruptcy law, as well as Chapter 11.
I will focus on Chapter 7 Bankruptcy in this newsletter. In my next newsletter, I will provide
additional details regarding Chapter 7 and provide an overview of Chapter 11 and Chapter
13 bankruptcies.
California and Chapter 7 Bankruptcy
In California, Chapter 7 bankruptcy is when a trustee collects and sells your non-exempt
property and uses the proceeds to pay off your creditors. A creditor is someone to whom
you owe money. Non-exempt property can include a number of items including:
- Cash and investments, such as stocks and bonds
- A second car
- A second home
- Family heirlooms and antiques
- Collections, such as stamp or coin collections
- Musical instruments
However, California has a very liberal wild card exemption as one of their plans and it
can be used to protect some, if not all, of these assets. The majority of Chapter 7
bankruptcy filings are known as "no-asset" cases, which means the debtor does not have any
non-exempt property to sell off.
Your Chapter 7 proceedings begin when you file a Volunteer Chapter 7 Petition with
Schedules with the proper California bankruptcy court. These documents must show all
your debts, including back taxes owed, your mortgage, and auto loans. You must also list the
names and addresses of all creditors and compile a list of all your assets.
Once these documents are filed, all creditors will immediately be put on notice to stop
collection attempts. The trustee then will collect any non-exempt assets you may have and
sell them to pay your creditors.
The 341 Hearing
After filing for bankruptcy in California, you must appear before all your creditors in what is
called the 341 hearing. This allows the trustee and the creditors to ask you any questions
regarding your debts and assets under oath.
California Exemption Schemes
California provides those filing for Chapter 7 with two exemption schemes. These schemes
allow you to keep certain assets. Although the following list is not exhaustive, the first
exemption scheme allows you to keep:
• Your home, depending on how much equity you have in the house
• Building materials to improve your home, up to a certain monetary limit
• Your motor vehicle, depending on the amount of equity in it
• Necessary appliances, furnishings, clothing and food
• Jewelry, family heirlooms, and art up to a certain amount
• Burial plots
• Health aids
• Alimony
• Government benefits, including:
- unemployment
- Social Security
- workers' compensation
The second exemption plan parallels the first, except monetary limits and equity limits are
different. In addition, the second scheme allots a certain amount of money as a wild card
exemption that can be used toward any property.
Monetary limits on these exemptions change over time. If you would like to know more
about these exemptions, you should contact our office: (916)-781-3355.
California and Chapter 11 and Chapter 13 Bankruptcies
In 2005, bankruptcy laws across the country underwent a dramatic change with the passage
of the Bankruptcy Abuse Prevention and Consumer Protection Act. This act set fairly strict
limits on who can and cannot file for Chapter 7. Under the act, if you cannot prove that you
are eligible to file for Chapter 7, then you may file for Chapter 11 or 13.
Chapter 13 bankruptcy allows a debtor to reorganize to pay off his or her debts over a span
of five years. To file for Chapter 13, you will need a stable income, as well as money left over
after basic necessities are paid for.
The court will then apply a test to determine how much money you can reasonably put
toward paying off your debts. Along with the necessary bankruptcy petition, you will also
need to file a five-year debt payment plan with the court. This plan must address the
repayment of priority claims, such as back taxes.
The court-appointed trustee will then review this plan and distribute it to your creditors who
may object to the plan.
Bankruptcy law does set monetary limits for those wishing to file Chapter 13. If your debts
exceed a certain threshold, you will not be able to file for Chapter 13. In such cases, you may
want to file for Chapter 11 bankruptcy. Often used by businesses, Chapter 11 allows debtors
who exceed the statutory limitations of Chapter 13 to reorganize their debts.
If you would like to know whether you and your family might benefit from a Bankruptcy
filing, call our office for a complimentary Chapter 7 consultation.
(916-781-3355)
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| 916-781-3355 |
Contact Information:
Telephone: (916) 781-3355
Facsimile: (916) 781-3331
Office address:
6930 Destiny Drive, Suite 700
Rocklin, CA 95677-2987
Telephone: (916) 781-3355
Facsimile: (916) 781-3331
Office address:
6930 Destiny Drive, Suite 700
Rocklin, CA 95677-2987