Bankruptcy is being unable to pay your obligations,
expenses or long term debts.
What can you do about being bankrupt?
- You can try to make agreements with your creditors to extend or reduce payments that are due.
- You can seek the assistance of the federal bankruptcy court system.
What are the advanatages of the bankruptcy court system over creditor arrangements?
- Creditors are prevented by law from all efforts to collect debts unless they get permission of the bankruptcy court.
- You can create a repayment plan which will allow you to pay off your unsecured debts in three to five years.
- You may be able to discharge your unsecured debts without paying anything.
are the "Chapters" in bankruptcy?
7 permits debtors whose net earnings
are less than the State median income*
and corporations to discharge unsecured
debts without payment.
13 permits individual debtors whose
net earnings are greater than the State
median income and who owe less than
about $350,000 in unsecured debt and
less than about $1,000,000 in secured
debt to make a plan to discharge the
unsecured debt in three to five years
and reduce some "underwater" debt
secured by certain kinds of property.
- Chapter 11 permits individual debtors whose
debts exceed the limits for Chapter 13 and
corporations to make a plan to restructure
What kinds of debt are recognized by the bankruptcy courts?
- "Priority" debt
includes obligations for federal, State
and local taxes, child support and alimony
and certain less common debts.
- "Secured" debt
includes debts for which you have agreed
to permit the creditor to seize specific
property if you do not pay. Usually
the security is real property or an
automobile, but can include crops,
securities (stocks and bonds) and money
other people owe you.
- "Unsecured" debt
is money you owe because of agreements
with creditors that do not contain
provisions to seize property if you
do not pay. The most common unsecured
debt is credit card debt and bills
you owe service providers (doctors,
hospitals, dentists, lawyers, auto
do I "declare bankruptcy?"
- Comply with the requirements of the U.S.
Bankruptcy Code (Title 11 U.S. Code) preparatory
- Reside within the United States.
- Complete a brief course of instruction in debtors' remedies, which may be obtained from a commercial provider by telephone or on line.
information about your assets, debts, income and expenses.
- Prepare and file a Petition with the bankruptcy
court where you live and pay court filing
11 $1,046.00 ($1,213.00 after November
Prepare and file with the Petition Schedules listing assets and debts
- Schedule A - Real Property
- Schedule B - Personal Property
- Schedule C - Property Claimed as Exempt (see
Cal. Code of Civil Procedure 703.140)
- Schedule D - Creditors Holding Secured Claims
(deeds of trust, security agreements)
- Schedule E - Creditors Holding Unsecured
Priority Claims (taxes, domestic support
orders, wages and salaries payable)
- Schedule F - Creditors Holding Unsecured
Nonpriority Claims (credit cards, revolving
accounts, personal loans)
G - Executory Contracts and Unexpired Leases
(car and business leases, HOA dues, patent & copyright
- Schedule H - Codebtors (other than spouse
- Schedule I - Current Income of Individual
Debtors (both debtor and spouse)
- Schedule J - Current Expenditures of Individual
Debtors (both debtor and spouse)
- Summary of Schedules and Declaration (under
penalty of perjury) Concerning (truthfulness
and completeness) Schedules
- Statement of Financial Affairs (listing bank
accounts, safe deposit boxes, business
interests and other financial matters)
- For Chapter 13 filers, prepare a repayment Plan,
which must be filed within 10 days of the
Chapter 7 and 13 filers, attend a "Creditor's Meeting" presided
over by an appointed bankruptcy trustee.
Chapter 11 filers, attend an instructional
session with the U. S. Trustee
on preparing monthly operating
- For Chapter 11 filers, attend a Creditor's Meeting presided over by the U.S. Trustee.
- For Chapter 11 filers, prepare a
repayment Plan and Disclosure Statement which
must be submitted to creditors and the bankruptcy
court judge for approval.
- Complete a brief course of instruction in budgeting, which may be obtained from the same provider who gave the debtors' remedies program, by telephone or on line.
What may I expect for attorneys' fees?
Chapter 7, $750 to $2,500, depending
on whether a business and/or an owned
residence with equity is involved
Chapter 13, $2,000 to $6,000 and
more, depending on whether a business,
taxes and multiple parcels of real
estate are involved.
Chapter 11, fees range upwards of
The fillable form used to compute whether
you may file under Chapter 7 or Chapter
attached here. 2012 Cal Median
Income is as follows:
Family of 1