If you are in a situation in your life where you have concluded that filing for bankruptcy is the only way to allow you to get out of the financial hole that you are in, you may not know how to begin the process of filing. There are several steps that you will need to follow in California as well as in all of the other states across the country.
It is important for you to have an acquaintanceship with the bankruptcy process so that when you actually start the filing process, you will not be so overwhelmed and everything may go smoothly. You should follow the steps in order. They are as follows:
- 2005 Bankruptcy Act Credit Counseling: This act requires that all debtors who filed for bankruptcy to go through credit counseling within six months of filing for bankruptcy relief. They are also required to finish a financial management course after filing.
- 2005 Bankruptcy Act Means Test: If you file for bankruptcy, your expenses and your income will be carefully scrutinized to establish whether you qualify for Chapter 7 bankruptcy or if you need to file for Chapter 13 bankruptcy. The court will examine your average income for the last six months before filing and compare those numbers to the median California income. Your income must be lower than the median state income to qualify for Chapter 7 bankruptcy. However, if your income is above the median state income, the court will look at the other parts of the means test to establish whether you can apply for Chapter 7 or you must apply for Chapter 13.
- Collecting all of the necessary paperwork: One of the important documents that you will need to file for bankruptcy is an itemized list of all of the current sources of your income, significant financial transactions for the last two years, expenses (per month), secured and unsecured debts, and property. You will also need to show tax returns for the last two years, deeds to real estate that you own, car titles., and any loan documentation.
- Filing: Once you have all of your documentation, you will want to eliminate property that cannot be seized. To file, your attorney will need to file a two-page petition with the bankruptcy court. It is critical to be totally transparent on your bankruptcy filing because if you are not, it may put your bankruptcy ruling in danger.
Advice from a knowledgeable California bankruptcy attorney
Filing for bankruptcy can be complex and overwhelming. Having the support of a bankruptcy attorney can make the process far less overwhelming and easier to navigate. Instead of considering bankruptcy as failure, you should consider it a chance to start over and to build a bright future from scratch.