What are the steps involved in filing for bankruptcy in California, and how can a lawyer assist in the process?
By
The process for filing for bankruptcy in California involves several steps. First, the debtor (the person or entity seeking to file for bankruptcy) must complete credit counseling from an approved program within 180 days prior to filing. They must then file a petition for bankruptcy with the California Bankruptcy Court, which requires disclosure of all assets, liabilities, income, and expenses. The debtor must also provide copies of tax returns filed within the past two years, and a list of all creditors and the amounts owed.
After filing, an automatic stay goes into effect, which stops all collection efforts by creditors. A meeting of creditors is scheduled within 20-40 days after filing, where the debtor must answer questions under oath about their financial affairs. The trustee appointed to oversee the case may also investigate any potential fraud or other issues.
After the meeting of creditors, the debtor must complete a debtor education course before obtaining a discharge of their debts. A discharge relieves the debtor of most of their financial obligations, with a few exceptions such as certain tax debts or student loans.
A lawyer can assist with the bankruptcy process in several ways. They can provide guidance on which type of bankruptcy to file (Chapter 7, 11, or 13), help the debtor complete and file the necessary paperwork, attend the meeting of creditors with the debtor, and represent them in any disputes or challenges to the bankruptcy filing by creditors or the trustee. A lawyer can also advise the debtor on actions to take before and after filing to maximize the benefits of bankruptcy and avoid potential pitfalls.
It should be noted that there are certain limitations and exceptions to bankruptcy, and it may not be the best option for every individual or entity facing financial difficulties. In some cases, alternatives such as debt negotiation or settlement may be more appropriate. It is recommended to consult with a licensed attorney familiar with California bankruptcy laws to determine the best course of action.
