Living in California has a lot of benefits, however, the high cost of living cannot be handled by many. Going into debt is fairly easy as most of your income goes into housing and transportation costs and you are left with little to no income.
There is nothing left to do other than file for bankruptcy. Filing for bankruptcy can be a fresh start for you. All of your debts will be stopped once you file for bankruptcy. You can seek either the chapter 7 bankruptcy or the chapter 13 bankruptcy.
It is not advisable to represent yourself in a bankruptcy case if you decide to file a bankruptcy case then these are some steps you can take:
2005 Bankruptcy Act Credit Counseling
The 2005 Bankruptcy Act requires all individual debtors who file bankruptcy are required to undergo credit counseling within six months before filing for a chapter 7 or a chapter 13 bankruptcy and to complete a financial management course after filing for bankruptcy.
2005 Bankruptcy Act Means Test
Your income and expenses will be analyzed to determine if you qualify for a chapter 7 or 13 bankruptcy. To apply for the means test, the bankruptcy court will look at your income and compare it with the median income of California. If your income is lower than the median income of California then you can qualify for a chapter 7 bankruptcy. If your income is above the median income then the other aspects of the means test will help determine if you qualify for chapter 7 or chapter 13 bankruptcy.
Gather the Necessary Documents
Documents that you need to complete our paperwork include:
- 6 Months of Pay Stubs or Other Income Verification
- Information of Debts that You Owe to Creditors
- Information of Assets
- Filed Tax Returns of the Last 2 Years
A bankruptcy attorney will help you know what documents you require and gather the documents you need. These documents are needed to complete your bankruptcy petition.
Completing a Credit Counseling Course
You will have to complete your credit counseling course 6 months before you file for bankruptcy according to the federal law no matter what kind of bankruptcy you are going for. This course can be done over the phone or internet and is around 1.5 hours long.
Complete Your Petition and Schedule
You will have to complete your petition and schedules and file them with the bankruptcy court. The location you have lived for the past 180 days will determine which court you can file your bankruptcy in.
A bankruptcy attorney will help you answer all your questions and make sure that all your forms are prepared. It’s very important that you review your documents before turning them in.
Attend 341 Hearing
After you file for bankruptcy, you will need to go for a 341 hearing aka.meeting of creditors. This is the only time a bankruptcy filer goes to court. You will meet a bankruptcy trustee in this meeting who will ask you questions about your case.
Some Questions that they will ask are:
- Did you check and review your documents?
- Is the information accurate on the documents provided?
- Are there any inaccuracies in the documents?
Filing for bankruptcy is a demanding and complicated process, but it could be the change you need to have a fresh start in life. It isn’t advisable to file a Chapter 7 and Chapter 13 bankruptcy yourself. A bankruptcy attorney in San Diego will help you know how to file a bankruptcy in California.