Filing for bankruptcy in California? Although most of bankruptcy (including the filing process) is governed by federal law, you also need to know some California-specific information in order to file for bankruptcy. But you can easily find most of this information online. Here's how.
(For more articles on the filing process, see Filing for Bankruptcy.)
Here’s what you need to know if you are filing for bankruptcy in California.
In order to file for Chapter 7 or Chapter 13 bankruptcy, you must participate in a credit counseling course provided through an agency approved by the U.S. Trustee in California within the six month period prior to filing. You’ll also have to take a debtor education course before you can get a bankruptcy discharge. (To learn more about this requirement, including the rare exceptions, see Credit Counseling & Debtor Education Requirements in Bankruptcy.)
Each state has a set of bankruptcy exemptions – these determine what property you get to keep in Chapter 7 bankruptcy, and play a role in how much you repay unsecured creditors in Chapter 13 bankruptcy. (To learn more, see our Bankruptcy Exemptions area.)
Some states allow you to use the federal bankruptcy exemptions, but in California you can only use the California exemptions. However, in California you can choose from two different sets of state exemptions (you must choose one set or the other, you cannot mix and match). The first option offers a generous homestead exemption while the second set has a large wildcard exemption that can be used for any type of property.
To learn about California’s exemptions for your home and car, see The Homestead Exemption in California and The Motor Vehicle Exemption in California. For a list of other common exemptions in California, see California Bankruptcy Exemptions.
When you file for Chapter 7 or Chapter 13 bankruptcy, you must complete a bankruptcy petition, a number of schedules containing detailed information about your finances, and several other forms, including a lengthy form known as the “means test” (for Chapter 7) and a similar form for Chapter 13.
For more information about each of the official forms, including how to find them, see Completing the Bankruptcy Forms.
When you file for bankruptcy in California, you must compare your income to the median income for a household of your size in California. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years). This is called the means test.
If your income is above California's median income, you still might qualify for Chapter 7, but you’ll have to provide detailed information about your expenses and payments on secured debts in order to find out. Most Chapter 13 filers also have to provide this information.
For information about each of these forms, see:
Here’s how to find the California-specific figures for these means test forms:
California median income figures. Currently, the median income in California is $47,683 for a single-person household, $61,539 for a household of two people, and more for larger families. These figures change periodically. You can find the most current figures for each household size here.
Example. Kim is a single woman. She lives alone and earns $40,000 a year. She passes the means test and qualifies for Chapter 7 bankruptcy without having to complete the entire means test form because her annual income is less than $47,683.
California standard deduction figures. Forms 22A and 22C list categories of living expenses such as housing, transportation, food, and childcare. For some of those categories (like childcare), you provide the actual amount you spend. For others, you plug in a predetermined amount -- sometimes that figure is a national standard, other times the number varies by county or region.
You can find all of the California county and region-specific figures you’ll need for Forms 22A and 22C on the U.S. Trustee’s website at www.justice.gov/ust. Click on “Bankruptcy Reform” and then “Means Testing Information.”
Example. Housing and utility expense standards can vary greatly by county depending on how expensive it is to live there. If you live in Mariposa County, your mortgage or rent deduction is $958 for a one-person household. But if you live in Marin County, the deduction becomes significantly higher at $2,458. You can find housing expense standards for each California county here.
Some judicial districts and bankruptcy courts require bankruptcy filers to complete additional “local forms.” To find out if your court requires additional forms, contact the bankruptcy filing clerk. Some courts post these forms online on the court’s website. (Below you’ll find links to California’s bankruptcy courts.)
There are four federal judicial districts in California (see below for links). You can file in either:
You can use the Court Locator tool on the U.S. Trustee’s website to find bankruptcy court locations and websites. The four district bankruptcy courts in California are: