Navigating the complex world of bankruptcy regulations can feel overwhelming, especially when facing financial difficulties. Understanding the intricacies of California bankruptcy laws, including how often can you file bankruptcy in California, is crucial in determining the best course of action for your unique financial situation. This blog post provides a comprehensive overview of California bankruptcy laws, timeframes for filing, consequences of multiple filings, and alternative debt relief options to help you make an informed decision.
- California Bankruptcy Laws provide two types of bankruptcies for individuals (Chapter 7 and Chapter 13) with varying eligibility requirements, timelines, and processes.
- Filing multiple bankruptcies in California can have a range of negative consequences. Successful second filings require planning and evaluation.
- Alternatives to bankruptcy such as free legal aid organizations are available in California to assist filers with navigating regulations.
California Bankruptcy Laws: An Overview
In California, the two most common types of bankruptcies for individuals are Chapter 7 and Chapter 13, which both address unsecured debts. Chapter 7 bankruptcy involves liquidating assets to clear debts, while Chapter 13 allows for the retention of assets and the restructuring of debt into a feasible payment schedule, catering to specific financial situations. To be eligible for Chapter 7 bankruptcy, one must complete an approved credit counseling course and pass the means test, both of which are integral to the bankruptcy process.
However, filing for bankruptcy too frequently may result in the court refusing to grant a discharge, negatively impacting the current bankruptcy case. Hence, knowing the process and the timelines for bankruptcy filings significantly augments the likelihood of success.
Timeframes for Filing Bankruptcy in California
The duration between bankruptcy filings in California depends on the type of bankruptcy previously filed, ranging from 2 to 8 years. Considering the waiting periods is necessary for a successful discharge and to handle any claims filed by creditors.
The next sections outline the waiting periods for different combinations of bankruptcy filings, providing a guide on the timelines to consider when filing for bankruptcy in California.
Chapter 7 to Chapter 7
Filing for Chapter 7 bankruptcy again requires an 8-year waiting period from the previous filing date. This waiting period, outlined in Bankruptcy Code Section 727(a)(8), ensures that individuals are given a reasonable amount of time to address their financial situation and make a fresh start before seeking bankruptcy protection again.
Attempting to file a Chapter 7 bankruptcy in California before the end of the 8-year waiting period may result in the dismissal of the case and the potential forfeiture of bankruptcy protections, including having debts discharged. Hence, adhering to the waiting period ensures a successful bankruptcy filing.
Chapter 7 to Chapter 13
To file for Chapter 13 bankruptcy after Chapter 7, a 4-year waiting period is required. However, under certain circumstances, individuals can bypass the waiting period if they agree that their debt cannot be discharged under Chapter 7 and devise a payment plan for any debt that would not be fully discharged under their Chapter 7 filing.
Chapter 13 bankruptcy after Chapter 7 can address debts related to willful and malicious injury to property, certain tax debts, and domestic support obligations such as alimony and child support. This offers a viable option for individuals looking to manage their remaining debts after a Chapter 7 discharge.
Chapter 13 to Chapter 7
A 6-year waiting period is required to file Chapter 7 bankruptcy after Chapter 13, but it can be waived under certain conditions. Waiving the waiting period is possible if the individual has paid all of their unsecured creditors in full during the initial Chapter 13 bankruptcy payment plan.
This option provides flexibility for those who have successfully managed their debts under the Chapter 13 repayment plan but still find themselves in financial distress, opening up the possibility of further debt relief through Chapter 7 bankruptcy.
Chapter 13 to Chapter 13
Filing for Chapter 13 bankruptcy again requires a 2-year waiting period, but completing the repayment plan is necessary, except for unexpected hardships. The filer’s intent to file repeatedly for Chapter 13 bankruptcy is to lower payment amounts on their tax debts. This helps them keep the payments at a rate they can manage..
Fulfilling the repayment plan for Chapter 13 bankruptcy is necessary, barring unexpected situations. Following the waiting period and completing the repayment plan significantly increases the chances of a successful second Chapter 13 filing.
Consequences of Multiple Bankruptcy Filings in California
Filing for bankruptcy multiple times in California can have several consequences, including:
- Loss of automatic stay
- Damage to credit score
- Difficulty meeting financial criteria for items such as mortgages and additional credit cards
- Both filings will be visible on your credit report for the specified period.
Submitting multiple bankruptcies in rapid succession could lead to the forfeiture of the advantages of an automatic stay order, as well as a decrease in one’s credit score. Weighing the consequences before considering multiple bankruptcy filings is of utmost importance.
Strategies for Successful Second Bankruptcy Filings
In order to ensure a successful second bankruptcy filing in California, it is advisable to:
- Plan and gain an understanding of the process.
- Work with an experienced attorney.
- Be aware of the waiting periods between filings.
- Evaluate if the prior bankruptcy was submitted in good faith.
- Comprehend the particular requirements and exemptions in California.
These are crucial aspects of the bankruptcy filing process when a creditor filed in bankruptcy court.
Consultation with a bankruptcy attorney can offer helpful perspectives into the judge’s rulings and possible outcomes of bankruptcy filing, especially if you have a previous bankruptcy case. Guidance from a competent legal professional can greatly enhance the probability of a successful second bankruptcy filing.
Double Filing (Chapter 20 Bankruptcy) in California
Chapter 20 bankruptcy, or double filing, involves filing for Chapter 13 immediately after a Chapter 7 bankruptcy discharge in California. This strategy offers both advantages and disadvantages, depending on the individual’s financial situation and goals. Double filing can help address remaining debts that were not discharged under Chapter 7 and provide additional time to repay secured debts, such as mortgage arrears or car loans.
Consulting with a bankruptcy attorney to confirm the accuracy of the filing and to avoid filing in bad faith is advisable. Comprehension of the implications and possible advantages of Chapter 20 bankruptcy aids individuals in making informed choices about their debt relief strategy.
Alternative Debt Relief Options in California
If bankruptcy is not a viable option, alternative debt relief options in California may include debt consolidation, settlement, and credit counseling. Debt consolidation involves evaluating your debt, investigating consolidation possibilities, verifying your credit, contrasting choices, submitting an application for a loan, and settling your debts.
Debt settlement, also known as debt negotiation, involves negotiating with debt collectors to pay a lesser amount than the total amount owed, enabling individuals to settle their unsecured debt and avoid bankruptcy. Free financial counseling may also be beneficial in effectively managing your financial situation and ensuring success in the future.
Finding Legal Assistance in California
Securing legal assistance in California is important when dealing with bankruptcy regulations. When choosing a bankruptcy lawyer, consider:
- Attorneys with relevant experience
- Practitioners with local knowledge
- Referrals from trusted sources like friends, family, or your personal attorney.
In addition to consulting with a bankruptcy attorney, seeking help from legal aid organizations can provide valuable guidance and support. Upsolve, for example, is a free legal aid organization in California that provides assistance for bankruptcy cases.
Frequently Asked Questions
How much does it cost to file bankruptcy in California?
It typically costs $338 to file a Chapter 7 bankruptcy in California, though fee waivers may be available for those with an income below 150% of the federal poverty guidelines. For those who cannot afford the fee, other options are available.
How often can you file for bankruptcy in California?
You can file for bankruptcy as many times as you want in California, but you can only receive a discharge every eight years if filing under Chapter 7.
What is the difference between Chapter 7 and Chapter 13 bankruptcy in California?
Chapter 7 bankruptcy involves liquidating assets to clear debts, while Chapter 13 allows for the retention of assets and restructuring debt into a manageable payment plan.
How long do I have to wait to file bankruptcy again in California?
You must wait between 2 to 8 years, depending on the type of bankruptcy previously filed, before filing for bankruptcy again in California.
What are the consequences of multiple bankruptcy filings in California?
Filing for bankruptcy multiple times in California can lead to the automatic stay being lost, as well as cause a significant drop in credit score.