Bankruptcy in San Diego
If you are thinking about filing for bankruptcy here in San Diego, it is important to understand the process and what the different types of bankruptcy options are available. Bankruptcy can be a complicated and confusing process, so it’s important to know what you’re getting into before beginning.
As a leading bankruptcy lawyer in the county, we put together a guide to help you understand what a bankruptcy petition is, how the bankruptcy process works, what to expect out of bankruptcy court, and what you can do while filing for bankruptcy to get the best outcome for your situation.
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What is Bankruptcy?
Bankruptcy is defined as the process where a person or business can legally eliminate their debt by liquidating assets, negotiating with creditors, and making arrangements to pay back some or all of their debts. Bankruptcy is governed by federal law, not California law, and is designed to help people get a fresh financial start.
Bankruptcy is a viable option for anyone who is struggling to pay off their debts and can no longer afford to make payments, but it is important to understand that filing for bankruptcy does not erase all of your debt obligations, or make debts disappear though. Bankruptcy simply allows for a more manageable way to pay off debt and get back on track financially.
To file bankruptcy, you must create a petition to be submitted to the court. This petition will include details of your financial situation and allow the courts to determine what type of bankruptcy protection is available for you. It is important to understand that all types of bankruptcy are not equal and require different filing procedures.
The Different Types of Bankruptcy
When filing for bankruptcy as an individual in San Diego, you will need to choose a type of bankruptcy: Chapter 7 or Chapter 13 are the most popular choices for individuals. Both of these chapters offer different types of relief, and the one you choose will depend on your financial goals.
Chapter 7 Bankruptcy
Chapter 7 is a type of bankruptcy is sometimes referred to as “liquidation” or “straight bankruptcy.” It involves the selling of non-exempt assets to pay off some or all of your debt, and any debts that can’t be paid are discharged after the bankruptcy process. Unlike Chapter 13, there is no payment plan involved with this type of bankruptcy.
Chapter 13 Bankruptcy
Another type of bankruptcy is Chapter 13 bankruptcy, which is sometimes referred to as “reorganization” or “wage earner’s plan.” It involves you setting up a repayment plan with your creditors over a period of three to five years to pay off all or some of your debts. The amount and length of the payment term will depend on your income and expenses.
Other Types of Bankruptcy
There are two other common types of bankruptcy available in the bankruptcy code, although they are less commonly used. Chapter 12 Bankruptcy is for family farmers and fishermen, and Chapter 11 Bankruptcy is available for businesses (both small and large).
The Bankruptcy Filing Process
Once you’ve consulted with a lawyer and familiarized yourself with how bankruptcy works, it is time to begin the filing process. The paperwork required for filing for bankruptcy includes a petition, schedules of assets and liabilities, and other supporting documents. This starts an automatic stay that will prohibit creditors from taking any action against you or your property.
Then you will need to attend a mandatory credit counseling session and provide proof you completed it. We file our cases in the bankruptcy court in the Southern District of California (San Diego) and the court will assign a case number to our filing.
After this is complete, you must attend a hearing in front of a bankruptcy judge who will review your proposed repayment plan and either approve it or make changes before its final approval (which is also known as a “meeting of creditors”) and answer questions about your financial situation. If your bankruptcy is approved, you can then begin working on rebuilding your credit and financial future!
Tips From a Bankruptcy Attorney
Organize Your Finances
Having organized financial records is key when filing for bankruptcy. Get all your bills, bank statements, tax returns, pay stubs, etc., together so the court has an accurate picture of your finances and assets.
Stay Current On Your Payments
If you owe money and are able to make payments on any of your debts, you must continue doing so while filing bankruptcy. This will demonstrate to the court that you are making an effort to pay back what you owe and will also give you a better chance of getting your repayment plan approved during your bankruptcy case.
California Bankruptcy Exemptions
It’s important to familiarize yourself with the California bankruptcy exemptions that are available and how they will affect your case. Exemptions determine what property you can keep during a Chapter 7 liquidation or reorganization of assets in Chapter 13.
Get Professional Help
The process can seem overwhelming, but getting the help of a professional bankruptcy attorney can make it much easier for you. A bankruptcy lawyer can provide valuable legal advice and help guide you through the entire process from start to finish.
Chapter 7 vs Chapter 13 Bankruptcy
First, it is important to know the difference between Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy is often referred to as liquidation bankruptcy because it involves selling off assets to pay creditors. In contrast, Chapter 13 bankruptcy allows for debt repayment plans with more manageable payments over a three or five-year period. The type of bankruptcy that best suits your situation will depend on a variety of factors such as income, assets, and debts.
Frequently Asked Questions
Bankruptcy Court in San Diego
The US Bankruptcy Court in San Diego is located at:
Southern District of California – 333 West Broadway, San Diego, CA 92101
Phone Number: (619) 557-5620 | Hours of Operation: Monday to Friday 8:00 AM – 4:30 PM PST.
For information on court fees, the filing fee for bankruptcy forms, or other questions related to filing for bankruptcy in San Diego, you can also contact the court directly.
