How Filing For Bankruptcy Works

Filing for bankruptcy can often be one of the best ways that you can take control of your finances and be ready to start a new chapter on your financial future. Starting the process of bankruptcy may seem intimidating but with the help of a legal professional, the process can be simplified. In this article, we will teach you a little bit more about how bankruptcy works, the assets that you are able to hold onto, and what you can expect in the process of filing for bankruptcy.

Bankruptcy Filing Forms

The filing forms are one of the first aspects of your bankruptcy and on these forms, you have to disclose every aspect of your financial situation. You can find these forms downloadable on the U.S. Bankruptcy Court forms webpage. After filling out these bankruptcy forms, you are filing paperwork at a local bankruptcy court along with a filing fee or fee waiver depending on your current financial situation. 

Information Specific To California

Even though California is governed by federal law as are the bankruptcy courts in California, there are specific amendments to the law in California and you need to follow specific procedures to complete the forms. Make sure that you are checking into the hours of the four main bankruptcy courts in California, check into the fees and local forms are required by each court, file the paperwork with the court clerk and make sure that you are attending meetings with the bankruptcy trustees on time. 

The 341 meetings with your creditors and your bankruptcy trustees will be a must-attend aspect of your bankruptcy. It’s likely that you’ll be summoned to one of the four main bankruptcy courts in the area and you will be responsible for negotiating with your creditors. It’s often advantageous to have a legal professional with you during these appointments so that you can experience improvements to the negotiation process. 

Means Testing And Counseling

The US trustee website has a list of credit counseling providers that you will be responsible for meeting with during your bankruptcy. The website will also include testing information on whether you will qualify for Chapter 7 bankruptcy or Chapter 13 bankruptcy with your current financial situation.

Means testing: This means testing is an essential process and before you can wipe out your debt under Chapter 7 bankruptcy, you need to meet the income qualifications first. Under a means test, you will provide your family income and if it exceeds the median income for your state with your expenses subtracted, you will likely need to proceed with a chapter 13 bankruptcy. 

Credit Counseling

Anyone filing a consumer bankruptcy in the state of California will have to complete some form of credit counseling. Credit counseling consists of two credit counseling ing and debt management courses one before you file for your bankruptcy and one that will take place after the bankruptcy. Under the credit counseling and debtor education column on the bankruptcy district website, you’ll find a list of approved counselors in your area.

Exemptions

It’s often advantageous to see get a chapter 13 bankruptcy so that you can qualify for more exemptions from your creditors and the repayment of your debts. You won’t lose all of your property when you file for a chapter 7 bankruptcy, California gives you the option to provide a separate list of assets that you can exempt or use a series of two exemption schemes to choose the assets you would like to protect. The non-exempt assets that you have under Chapter 7 bankruptcy will be sold off by a trustee to pay down your debts. In a chapter 13 bankruptcy, you’ll be able to exempt most of your assets but renegotiate a repayment plan equal to the value of a portion of your current debt. 

Working With a Legal Professional

In order to handle the process of a bankruptcy and to decide on the best path with your finances its often advantageous for you to speak to a legal professional. Contact us today for assistance in your bankruptcy.