If you are in financial trouble, you are not alone. Each year over a million Americans file bankruptcy.

If you are overextended, overwhelmed by debts, or afraid that the bank will foreclose on your home, you need to call bankruptcy attorney as soon as possible. Once a bankruptcy attorney files your case, you may be entitled to an automatic stay that will prohibit your creditors from taking any further action against you. Don’t let the situation continue to get worse or lose property unnecessarily. Your California bankruptcy attorney can help you decide whether Chapter 7 bankruptcy or Chapter 13 protection is right for you.

Bankruptcy is a legal process by which you can deal with your debts when you can no longer pay them. Bankruptcy allows you to get most, if not all, bills discharged. You can keep most, if not all, of your property. Creditors cannot try to collect debt or sue debtor during bankruptcy.

At Ensminger Law Offices, P.C. we have helped families, just like you, to find the legal solutions they needed to put their finances and their lives back on track. 

Feel free to call our office to set up a personal consultation at no charge. Remember, you will always be treated with respect and dignity.

California Bankruptcy Process

2005 Bankruptcy Act Credit Counseling
The 2005 Bankruptcy Act requires all individual debtors who file bankruptcy on or after October 17, 2005, to undergo bankruptcy credit counseling within six months before filing for bankruptcy relief and to complete a financial management instructional course after filing bankruptcy.

2005 Bankruptcy Act Means Test
Under the 2005 Bankruptcy Act you income and expenses will be analyzed to determine if you qualify to file a Chapter 7 Bankruptcy or if you must file Chapter 13 Bankruptcy. To apply the bankruptcy means test, the bankruptcy courts will look at your average income for the 6 months prior to filing bankruptcy and compare it to the median income for that state. If the income is below the median, then you may choose Chapter 7 bankruptcy. If your income exceeds the median, the remaining parts of the means test will be applied to determine if you can file Chapter 7 Bankruptcy or if you must file Chapter 13 Bankruptcy.

Gathering Bankruptcy Paperwork
To begin the bankruptcy process you must itemize your current income sources; major financial transactions for the last two years; monthly living expenses; debts (secured and unsecured); and property (all assets and possessions, not just real estate). You should also collect your tax returns for the last two years, deeds to any real estate you own, your car(s) titles, and the documents for any loans you may have.

Filing Bankruptcy
Once you have gathered this information, you should then determine which property you believe is exempt from seizure based on the California Exemptions. To actually file, you will need to file a petition and several other forms at your California District Bankruptcy Court. These forms, collectively are referred to as the schedules and ask you to describe your current financial status and recent financial transactions (typically within the last two years).

Bankruptcy Automatic Stay
Once you have filed your paperwork with the bankruptcy court, an automatic stay immediately goes into effect. This provision prevents creditors from making direct contact with you or staking a claim on any of your property from the day of filing forward. This will stop any foreclosure proceedings.

Bankruptcy Trustee
Upon filing, the court will assume legal control of your debts and property not covered by your California Exemptions. A trustee will be appointed to your case by the court. The job of the trustee is to see that your creditors are paid as much as possible. This person will thoroughly review your paperwork, particularly the assets you have in your possession and the exemptions you wish to claim, and can challenge any element of your bankruptcy case.

Bankruptcy 341 Meeting of Creditors
Approximately a month or two after filing, the bankruptcy trustee will call a first meeting of creditors, which the debtor must attend. This proceeding is also referred to as the § 341 meeting, named after the corresponding section of the bankruptcy code. Creditors rarely attend a Chapter 7 bankruptcy meeting. Objections are typically resolved by negotiation between the debtor or the debtor's counsel and the creditor. If a compromise can not be reached, a judge will intervene.

The bankruptcy meeting of creditors typically lasts about five minutes. You will receive notice of the location of the meeting but you may contact the court to confirm the address and time. Most Chapter 7 bankruptcy filings involve no non-exempt assets, however, if you filed for Chapter 7 bankruptcy and do have non-exempt assets; you will have to turn over non-exempt property (or its fair market value in cash) to the bankruptcy trustee after the meeting. The trustee will sell this property and distribute the proceeds to your creditors. If the property isn't worth a great deal or would be hard to sell, the trustee may decide to abandon the property (and return it to you). Bankruptcy Trustees and creditors have 60 days to challenge the debtor's right to a discharge. If there are no challenges, you will receive a notice from the court that your dischargable debts have been discharged within roughly three to six months.

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BANKRUPTCY FORMS