Do I Need an Attorney to File Bankruptcy in California?
Bankruptcy is a legal procedure that goes through the court system and approves arrangements for debt relief in the form of a discharge. You must comply with the court requirements, which include providing accurate information and meeting submission deadlines. While you do not have to hire an attorney, having someone on your side who understands the Bankruptcy Code can take a lot of stress out of the process for you. It can also ensure that it goes smoothly so that you do not have to refile and start over if you miss a step, which could become costly.
How Do I Start the Bankruptcy Process?
Getting the most from bankruptcy in Rancho Cucamonga requires preparation. Regardless of whether you use an attorney, there are specific documents you will need to collect. They include:
- Asset Information – Pull together documents that contain information on any assets you have, such as:
- Vehicle value (Kelly Blue Book private party value)
- Bank accounts
- IRAs, 401(k)s and Pension
- Life insurance policies
- Previous Year’s Tax Returns – Up to four years may be required
- Six Months of Income Verification – This can include paystubs, retirement benefits, and unemployment payments.
These documents are necessary for the completion of your bankruptcy petition and schedules.
Complete California Bankruptcy Forms
Chapter 7 bankruptcy and chapter 13 bankruptcy each have their own forms package, each consisting of about 100 pages. The package contains all forms and schedules you’ll need, and you file them with the court under penalty of perjury.
Filing the petition and schedules is not free, unless you don’t use a lawyer and qualify for a fee waiver. You will have to pay credit counseling and debtor education fees as well. You will also have to provide the trustee assigned to your case with state and federal tax returns, as well as copies of your valid identification and acceptable proof of your social security number.
How Can a Rancho Cucamonga Bankruptcy Attorney Help?
When you hire an attorney, they can discuss your options, review the information you provide, and ultimately draft and file your petition. An attorney can submit documents and information to your bankruptcy trustee on your behalf, as well as represent you at your meeting of creditors during your examination by the trustee. This ensures your bankruptcy goes smoothly and helps you achieve your goals.
The Means Test
A bankruptcy discharge is known as the “fresh start”. To file chapter 7 bankruptcy, you must pass the “means test”. An attorney can help you determine if your income is below the state median level, what expenses you can claim and what is considered “special circumstances” before you submit the documentation. Also, not everyone who wants to file chapter 7 must take the means test. If you meet certain other criteria, you may be able to bypass the means test and complete your chapter 7 bankruptcy as a “business case”, regardless of your income.
Determine the Right Exemptions for You
Unlike chapter 7, chapter 13 is a repayment plan that typically takes at least three years to complete. Most remaining debt is discharged at the end of your plan if it is not paid during the plan. Bankruptcy in California does not mean you lose everything, and California has two exemption paths. You may be able to file chapter 7 and keep your house, primary vehicle and other critical assets, depending on which one you choose. If your assets are over the exemption limits, you may want to consider filing chapter 13 to pay back the non-exempt amount over a three or five year plan. An attorney can help you decide which exemption scheme is appropriate for you, ensure the paperwork reflects your choices, and is filed appropriately.
File your petition with the Court
When you have an attorney, they file the paperwork, so you don’t have to go to the courthouse to do it yourself. Your meeting of creditors will be scheduled to about 30 days after your case is filed. This meeting does not happen in a courtroom in front of a judge, but it is attended by the court-appointed trustee and potentially creditors. In this meeting, the trustee asks you to verify that:
- You have reviewed and understand the documents you signed in the forms package
- All information is accurate, to the best of your knowledge
- You listed all assets and creditors
The trustee may ask how you determined the value of your home and other assets.
Work with the Trustee
Bankruptcy trustees have oversight, supervision and administrative authority over the cases assigned to them. They check for the accuracy of your list of assets and creditors, determine which of your assets can be liquidated (non-exempt), and in Chapter 13 cases, administer repayment to your creditors. Unfortunately, not all bankruptcy cases run smoothly. With an attorney by your side, you do not have to worry about handling legal issues on your own, such as:
- Creditor negotiations
- Asset liquidation
- Discharge challenges
- Questions of fraud
- Avoidable asset transfers
An experienced California bankruptcy attorney can prepare you for the questions and help ensure it goes smoothly.
Creditors will call until you file bankruptcy. When you have counsel, you can tell creditors to contact your attorney, and your attorney will verify representation.
Experienced California Bankruptcy Attorney
An experienced bankruptcy attorney can help you determine which chapter(s) of bankruptcy you qualify for. This process will help you keep the property you want and ensure the case goes as smoothly as possible. An attorney can ensure you meet the deadlines and provide the required information in an appropriate format. Filing bankruptcy is stressful under the best circumstances, but you don’t have to go through the process alone or with uncertainty when you hire an experienced bankruptcy lawyer to help you.