California Bankruptcy
Planning for a California bankruptcy is essential. All types of cases are protected by an
automatic stay after filing a petition. Thereafter, qualification for each chapter is different, as is the
relief available. All issues concerning exemptions, forfeiture of assets, if any, legality of past conveyances,
and qualification are properly consider before selecting a particular chapter. The options currently available
to individuals domiciled within the state are:
California bankruptcy under Chapter 7 remains the most popular chapter today for
individual debtors because it eliminates debts quickly and does not require full or partial payments. With
reform looming on the horizon since 1994, new restrictions are expected at any time which will eliminate chapter
7 options for all individuals who receive a salary equal to or above the state median income level.
California bankruptcy under Chapter 11 is the preferred choice for large
corporations and wealthy individuals. In exchange for an expensive administration, more lucrative options and
benefits are available. Ch. 11 filings decreased nationwide since 2001, while all other chapter filings
increased steadily both in number and as a percentage of the general population.
California bankruptcy under Chapter 12 applies only to family farmers.
Because of the seasonal nature of crops, special provisions allow reorganization payments to be tailored to
harvests.
California bankruptcy under Chapter 13 availability requires regular monthly
income. Subject to ceilings placed on total debt, employees and others who earn regular income may reorganize
payments, terms, and interest rates, as well as discharge the remaining portion of debts upon completion of
a plan.
Choosing the best chapter depends on personal goals. Each debtor's financial history is unique.
Each chapter provides for different treatment of arrearages, payments, if any, property retention, and the time
required under federal supervision. Success begins with a thorough understanding of all options available.
Restrictions on California Bankruptcy Lawyers
Special restrictions apply to California bankruptcy lawyers according to the rules of procedure adopted by California
bankruptcy courts. Attorney fees and filing fees are also subject to regulation. For more information, see:
Reform of the availability of federal debt relief is now under consideration by the U.S. Congress. A
new "abuse prevention act" is expected to pass into law at any time. Included within proposed regulations, Ch. 7
will not be available to many individuals, Ch. 13 payments will increase, judges will lose discretion on
individual cases, and mandatory new penalties and fines will be imposed in new circumstances, and become
mandatory upon the motion of any creditor. New laws
under consideration were proposed primarily by lobbies representing commercial lenders.
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