Bankruptcy Requirements in California
- When considering bankruptcy, it is important to learn about the specific requirements and laws in your state.calculator image by jedphoto from Fotolia.com
Whether you elect to file for Chapter 7 or Chapter 13, you must meet certain bankruptcy requirements in California and all other states before you can file and present your petition for bankruptcy to a judge for approval. While federal law regulates bankruptcy requirements, laws about time restrictions and exemptions are slightly different in each state. Learning about these requirements is the first step in determining whether or not filing for bankruptcy is a good option for you. - Bankruptcy requirements in California state that if your median income is less than or equal to the median income for a family the size of your own, you are eligible to file for Chapter 7 (liquidation). If your median income exceeds the median income requirements, you may not be eligible to file for Chapter 7 but may still be able to file for Chapter 13 (repayment), depending on your total debt-to-income ratio.
- Before you can file for bankruptcy in California or any other state, you must successfully complete a credit counseling course. The course must be approved by the United States Trustee's office and is intended to educate and inform you about your options when it comes to bankruptcy versus an informal repayment plan.
- Debtors in California who have had a previous Chapter 13 are required to wait to at least four years to file for Chapter 7, and debtors with a previous Chapter 7 discharge must wait at least eight years to file for a subsequent Chapter 7. Debtors who have a previous Chapter 13 are required to wait at least two years before filing for a subsequent Chapter 13.
- Bankruptcy requirements in California dictate that in order to file for bankruptcy and to qualify for state exemptions, debtors must show proof of California residency for the past two years.
- Bankruptcy exemptions outline what a debtor is allowed to keep in a bankruptcy. In California, there are two systems of exemptions that eligible debtors can choose from, depending on their filing status, (individual or jointly) income, and other factors. With both options, debtors are almost always allowed to keep their primary vehicles and residences. Consulting a bankruptcy attorney is the best way to ensure that you make the right choices when it comes to filing for bankruptcy.
