When you're feeling drowned in debt and aren't able to keep up on your payments, one of your options may be to file for bankruptcy in California. There are several debt relief options, depending on what you qualify for.
Who Can File For Bankruptcy in California?
Qualifications for bankruptcy depend on the bankruptcy chapter you will file for. The two most common chapters for individuals and couples are Chapter 7 and Chapter 13.
Chapter 7
To qualify for Chapter 7 bankruptcy, you generally can get all of your debts forgiven and you may be able to keep certain exempt assets. The debts that are not discharged in Chapter 7 bankruptcy are alimony and child support debts, tax debt and student loan debt.
You must have a regular income and make less per year than the median income in your state to qualify for Chapter 7. If you have filed for Chapter 7 or 13 in the past 180 days and were rejected, you may not file.
Chapter 13
Chapter 13 bankruptcy is for people with a larger annual income and those who do not want to give up any assets. Generally, this type of bankruptcy creates a structured payment plan that spans three to five years, after which the remaining debt is eliminated.
General Qualifications
In order to file for bankruptcy in California, you will have to completely divulge all of your assets, debts and income, and you will also have to participate in credit counseling classes. Generally, you must owe at least $1,000 and your debt must exceed the value of all of your assets.