Bankruptcy California Self-Help

Whether you want to request a partial debt repayment plan under Chapter 13 or forgiveness of pre-existing debts under Chapter 7 in California, you don't necessarily have to hire an attorney to represent you. But while you can use self-help resources to file bankruptcy, filing a case without an attorney is potentially difficult, warns the United States Bankruptcy Court Northern District of California. Before going about this complex legal process on your own, you should familiarize yourself with the different types of bankruptcy and learn what you can and cannot include in your debt relief case.

Chapter 7 Income Qualification

Not every California resident in financial trouble economically qualifies to file Chapter 7 bankruptcy, which eliminates legal obligations to repay existing debts such as credit card bills, most types of loans and medical bills. Before a Golden State resident can file a Chapter 7 petition, he must determine whether or not he earns less than the annual median income level correspondent to his household size. A single California resident could earn up to $48,140 a year while a family of four living in the state could bring in up to $79,477 annually, notes the U.S. Trustee Program. Californians earning more money must prove through a federally designed means testing formula that they can't reasonably repay creditors and support their families. Otherwise, they must partially repay debts in Chapter 13.

Asset Considerations

Californians risk losing some assets when they file bankruptcy, especially Chapter 7. But state asset exemption laws allow every Golden State resident to retain some of their property regardless of bankruptcy status. Disabled or elderly California residents could keep up to $100,000 of real estate equity while other residents could retain up to $75,000 in real estate, notes Bankruptcy Action. Other asset exemptions include all retirement accounts, pensions and bank deposits from the Social Security Administration.

Required Hearings

You must attend at least two hearings to complete your California bankruptcy case without the help of an attorney. The 341 meeting enables your creditors to have a voice in your Chapter 13 repayment plan or object entirely to any type of bankruptcy you filed. In most cases, creditors don't show up to a 341 meeting unless they believe you committed bankruptcy fraud. You also must attend a discharge hearing, where a California bankruptcy judge will decide whether or not to accept your case.

Ineligible Debts

Senate Bill 256, signed in 2005, changed the face of what debts you could include in bankruptcy. You cannot include tax bills that are less than three years old, child support, alimony, civil damages owed due to criminal activities, future debts or debts incurred right before filing bankruptcy. Don't count on including federally issued student loans unless a California bankruptcy judge approves a rare exception. Exceptions are granted for cases of serious and permanent disability or another situation like a college going out of business.

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References

• "How to File for Chapter 7 Bankruptcy"; Stephen Elias, Albin Renauer, Robin Leonard; 2009
• United States Bankruptcy Court Northern District of California: Filing Without an Attorney
• U.S. Trustee Program: Census Bureau Median Income
• Bankruptcy Action: California Bankruptcy Exemptions
• State of California Franchise Tax Board: Bankruptcy