Step 1. Learn What to Do
To file for bankruptcy, first you need to learn enough to know where to start.
This site helps you do that. It will give you an overview of the bankruptcy process and connect you with a wide variety of resources (information, products, services, and lawyers) that can help you through the bankruptcy maze.
This site is free. Unlike other bankruptcy sites, you don't need to register or provide any identifying information to use the means test calculator. If you want to contact an advertiser, that's up to you, but this website isn't after your name or email address.
Do you need to file for bankruptcy?
You may not need to file for bankruptcy.
Chapter 7 bankruptcy is the neutron bomb of debt management and asset protection. A Chapter 7 is quick (a few months), and quite complete when it comes to wiping out unsecured debt like credit card and medical debts. You may want to save it for when you really need it--you can use Chapter 7 bankruptcy only once every seven years.
On the other hand, your particular combination of debt, income, and property may be a perfect fit for bankruptcy protection. The vast majority of people who end up filing for bankruptcy really do need it.
A lot has been written lately about whether bankruptcy makes sense for people, in light of the economic downturn, including these articles:
- NPR/Talk of the Nation: Sometimes, Filing For Bankruptcy is Best - (April 20, 2009. Jane Bryant Quinn explains why it makes sense to go bankruptcy to preserve your retirement accounts and other exempt assets. Know your rights!)
- The New York Times: Debt Settlers Offer Promises but Little Help (April 19, 2009)
- The New York Times: Bankruptcy as a Step to Solvency (Jan 23, 2009)
- Jane Bryant Quinn in Newsweek: When Bankruptcy Makes Sense (Jan 3, 2009)
- Credit Slips Blog on "Should I File for Bankruptcy" (Jan 23, 2009) ('rules of thumb' about when it's appropriate to file).
- More news...
Tasks involved in filing for Chapter 7 bankruptcy
The typical bankruptcy filer is a person already in fragile economic circumstances, often with large amounts of credit card debt, who then suddenly faces a spate of hard luck (loss of job, injury, divorce, uninsured medical expenses), resulting in mounting penalties and an unpayable amount of debt.
Bankruptcy law is designed to help people just like this, who need assistance in making a clean break -- a "fresh start" on life, rather than spend the rest of their lives being crushed by the burden of unpayable debt.
Even if you're facing unpayable debt, you still may not need bankruptcy to protect your assets. Under the Exemption Laws of California, you may already be "judgment-proof." If so, you need not fear credit card companies simply because you owe them. Unsecured creditors (like credit card companies) can't take your stuff if it's exempt. If there are harassing phone calls, you can stop them with a simple phone call or letter. (However, interest and penalties on your debt will continue to accumulate and bankruptcy will put a stop to that.)
But exemption laws do not protect property from all types of debts or all types of creditors. For example, exemption laws typically do not protect you against collection of child support or tax debts. And if you bought property and pledged it as collateral for the purchase-money loan (for example, a car loan or mortgage), the lender can take the property regardless of any exemption law.
Finally, there are some kinds of debts that bankruptcy simply cant get rid of. These are called "nondischargeable" debts. This generally includes child support, most student loans, and most tax debts.
Where to Find More Information
There's much more to be said about this topic than can be said on a Web page. Any decision to file for bankruptcy versus other alternatives requires a thorough, systematic review (by you or someone you hire) of your income, debts, and property.
For less than $30, you can purchase and/or download Nolo's book, How to File for Chapter 7 Bankruptcy, which I wrote with attorney Steve Elias and Robin Leonard. Chapter 1 will walk you through a self-analysis of your situation and explain your options in plain English. The rest of the book offers step-by-step discussions of exempt property, keeping your home, and how to prepare and file your bankruptcy forms. The book includes line-by-line instructions for the official bankruptcy forms, complete with filled-in examples. Throughout the book, you are alerted to situations that are particularly troublesome and should not be handled without an attorney. (See Amazon.com reviews [here] and press reviews [here].)
This website supplements the information in the book by providing quick access to local (county-by-county) information and services.
For more money, there are other types of help available:
If you just need help with preparing the forms, you can hire a bankruptcy petition preparer.
If you want legal advice and analysis of the details of your specific situation, you can hire a California bankruptcy lawyer to advise you. You'll find listings in the Lawyers section of this site. These listings are not endorsements. They are simply designed to help you quickly connect with service providers in your area.
Whether you decide to do it yourself or hire professional help, this site will help you become a smarter, better-informed consumer and help you steer clear of shoddy services.
Info is not advice
However, this website cannot answer whether you, specifically, should or should not file for bankruptcy.
If you have questions about whether bankruptcy is right for you, you may want to seek credit counseling from a reputable agency or consult a lawyer. A free or low cost consultation with an experienced credit counsellor or attorney can help you identify the relevant factors of your specific financial situation that ultimately determine whether bankruptcy is an appropriate, financially prudent option at this point in your life.
What kind of bankruptcy do you qualify for?
There are two main types of bankruptcies for consumers:
Chapter 7 allows you to eliminate most unsecured debts in a matter of months in return for giving up all "non-exempt" property -- if you have any.
Most people who file for Chapter 7, have no available non-exempt property or equity. Whatever they still own by the time they file is either protected by exemption laws, or pledged to a secured creditor as collateral for a debt, and therefore not available to pay off unsecured creditors.
These are known as "no asset" bankruptcies, and most Chapter 7s are of this type.
Chapter 13 takes 3 to 5 years. Instead of giving up property, you repay a portion of your debts and live within a strict budget that is monitored closely by the bankruptcy court trustee. If you can't make the required monthly payments, your Chapter 13 bankruptcy fails and your debts will remain (unless you convert to a Chapter 7 bankruptcy).
Chapter 13 is commonly used by people who are behind on secured debt payments (e.g., mortgages) and want to propose a Chapter 13 plan to catch up on these payments over time.
Under the new bankruptcy law, which took effect in October 2005, a mathematical formula called the "means test" establishes an initial determination of the kind of bankruptcy you qualify for: Chapter 7, Chapter 13, or either. This formula takes into account:
- your monthly income
- the amount and kind of your debts, and
- other aspects of your financial situation.
If your annual income is less than the California median income for your household size, then you can file for Chapter 7 or Chapter 13, (assuming you meet other qualifications). If your income is higher than the state median, you must first complete a long list of expense deductions to estimate what your 'disposable income' will be over the next five years. The result of this calculation determines whether you can file for Chapter 7, or are left with Chapter 13 as your only option.
Although this form is rather long and complicated, the free, online Bankruptcy Means Test Calculator on this website can do the math for you and tell you how you would fare under the means test. This calculator is free and anonymous; you do not need to disclose your name, your email address, or any other identifiable personal information.
California Median Income
|Persons in Household|
Source: U.S. Trustee, U.S. Department of Justice (for bankruptcy cases filed on or after November 1, 2019)
Note. The means test is but one of several hoops you must jump through. Even if your income is low, a judge can prevent you from filing Chapter 7 if it appears that you have enough income to repay a substantial portion of your debts in a 3-year Chapter 13 plan.
More info & resources...
- Means Test Calculator for Alameda County (based on Official Form 22A; helps determine whether you meet the threshold requirements for Chapter 7? (most people do..) and incorporates official spending allowances used in the bankruptcy means test for Alameda County)
Where to file for bankruptcy
If you have lived in California for at least 91 of the past 180 days (six months), you may file at the court described below. If you've moved recently, you may have to file at the court that served your old zip code.
The 94540 zip code and all of Alameda County are in the jurisdiction of the
California Northern District Bankruptcy Court
Most of your interactions (including the filing of your forms) can be done by mail. However, you will need to go the courthouse, in person, at least once for a meeting with the bankruptcy trustee. (There's more about that meeting in Chapter 7 of How to File for Chapter 7 Bankruptcy.)
See the list below for more information about your court, including addresses and maps to the courthouse(s).
Check the court website for updates to this information before relying on it.
Humboldt County Location:
3140 Boeing Ave.
McKinleyville, CA 95519
U.S. Bankruptcy Court Post Office Box 2070 Oakland, CA 94604-2070 U.S. Bankruptcy Court 1300 Clay Street Oakland, CA 94612
United States Bankruptcy Court 1000 South Main, Room 214 Salinas, CA 93901
U.S. Bankruptcy Court Post Office Box 7341 San Francisco, CA 94120-7341 U.S. Bankruptcy Court 235 Pine Street, 19th Floor San Francisco, CA 94104
United States Courthouse, Room 3035 280 South First Street San Jose, CA 95113-3099
99 South "E" Street Santa Rosa, CA 95404
Official Website for the California Northern District Bankruptcy Court:
What to look for there:
Here are a few basic things to look for on any court website:
- The local rules
- Local forms
- Some kind of web page, or downloadable plain English information about bankruptcy in its most general terms.
- Some kind of plain English information about court filing requirements.
- Specific instructions on how the court wants you to prepare and format a "mailing matrix" of creditor addresses.
Is your court willing to help someone without a lawyer?
Most bankruptcy court websites make some effort to help non-lawyers and provide important information in plain English. .
Steps 2 & 3. Buy What You Need & Get Help If You Need It
What bankruptcy costs
The cost of filing for bankruptcy is more than just the filing fee. There are fees for:
- mandatory pre-filing credit counseling
- mandatory debt management 'education'
- advice and information to help you decide whether to file
- preparing your forms for filing, making the required number of copies, and assembling them in the proper order
- other court procedures that may be required or beneficial.
Here's a rundown of the costs you're likely to incur:
Time and Money for ...
$0 to 35
Research (Figuring Out What You Need to Do)
It's what you're doing now -- surfing the Web for information.
Surfing the Web is fine, but not all that efficient. To get up to speed faster, you can buy a step-by-step book that lays out the bankruptcy process and includes worksheets and forms.
Depending on where you live, you might be able to get some free bankruptcy help and information from the court, specifically for people filing bankruptcy without an attorney. An increasing number of courts offer such materials and you'll find links to those resources on the bankruptcy court page. Most bankruptcy courts used to offer little or no real help to non-attorneys. (There were a few happy exceptions to this general rule, but only a few.)
Even so, this information goes only so far. Court clerks still can't answer most questions or offer advice, but most now do offer some sort of self-service packet or people filing without an attorney, or who are at least curious about what is involved, before they decide to hire an attorney.
You may want to consult a bankruptcy lawyer early on, if you can get a free consultation.
Many people find that it's cost-effective to do some combination of both:
- First, spend few bucks on a high quality book. Take an evening or two to learn about bankruptcy. Learn what bankruptcy can and can't do for you, and what a bankruptcy attorney can and should do for you.
- Then use the free consultation with the attorney do discuss the more difficult aspects of your case that the book couldn't answer.
This approach helps you make the most of your time with the attorney, and helps you evaluate whether the attorney really knows bankruptcy law.
Bankruptcy is a specialized area of law. If you hire a lawyer, you want want one who really knows the subject and is familiar with local bankruptcy court rules and customs.
Chapters 1 through 5 of How to File for Chapter 7 Bankruptcy
$25 to $100*
* If your income is low, the bankruptcy law says that you are entitled to free counseling or reduced rates but the law doesn't say who pays for it.
Mandatory Pre-Filing Credit Counseling
Before you file for bankruptcy, you must participate in a credit counseling session and get a certificate proving that you have done so. This typically costs around $50 to $75 and takes about 90 minutes, and can be done online or over the phone. If you are planning to file jointly with your spouse, you can both attend the same counseling session, but each of you must get a separate certificate.
The new bankruptcy law states that these agencies must provide credit counseling services without regard to a client’s ability to pay and must disclose the possibility of a fee waiver or fee reduction before beginning the counseling session.
Many critics of the new bankruptcy law see the credit counseling requirement as just another bureaucratic obstacle for already-desperate debtors. Perhaps so. But try to make the most of this 90-minute session by getting as much free information as you can. Use it as a way to get a second opinion about your financial situation, to gauge whether bankruptcy is, indeed, the right choice for your situation. However, by law, a credit counselor cannot actually advise you whether you should file for bankruptcy.
So far (since the credit counseling requirement began in October 2005), counselors are reporting that of the vast majority of the debtors they're seeing are in such dire financial shape that bankruptcy is the only realistic option left for them.
Chapters 1 and 6 of How to File for Chapter 7 Bankruptcy
$35 to 1,800*
* If you qualify for legal aid or have a legal plan through your union or employer, they will fill out the forms for you.
Preparing and Assembling Your Bankruptcy Papers
Filing for bankruptcy requires you to fill in 50+ pages of forms detailing all of your current debts, assets, income, and expenses, as well as your intentions regarding loans that are secured by collateral (such as car loans).
In addition to providing this information, you're required to make decisions about what you plan to do about your secured debts (that is, debts that are secured by property you own).
The cost of this phase depends on whether you hire professional help.
Do-it-yourself - under $30
With some diligence, you can prepare all these forms yourself... but if you're not the careful, diligent type, self-help might not be for you. Bankruptcy rules can be unforgiving, and became more so since the passage of the 2005 law. There was a time when incomplete filings could be easily amended once the errors were called to the filers attention.
Under the new law, it's extra important to have all your ducks in a row before you file -- and there are quite a few ducks... in the form of many pages of forms to fill in and supporting documentation that you must gather and organize before you're ready to file.
You must be willing to take the time to read a good step-by-step instruction manual and follow the instructions carefully. Such materials cost under $30.
Professional Help - $150 to $1800
If you prefer not to handle it yourself, you can find listings of local bankruptcy lawyers on this website, in the yellow pages and on online lawyer directories, such as the National Association of Consumer Bankruptcy Attorneys (NACBA).
In a few areas you may also find businesses run by non-lawyers, known as Bankruptcy Petition Preparers (BPPs), who can fill out your forms but not offer legal advice.
Chapter 6 of How to File for Chapter 7 Bankruptcy
$150 - $2,500*
* If you qualify for legal aid or have a legal plan through your union or employer, they will fill out the forms for you.
Getting Professional Legal Advice
As mentioned in the previous section, at some point in the bankruptcy process, you may decide to hire someone to help you. If you just want help with the mechanical task of completing the forms and do not need legal advice, you can hire a Bankruptcy Petition Preparer (BPP).
If you have questions about how to interpret a particular form, or want an opinion about how bankruptcy law, state exemption laws or federal tax laws apply to your particular situation, you may want to hire a bankruptcy lawyer, at least for an initial consultation.
A good bankruptcy lawyer should be able to advise you on strategies to maximize the economic benefit of your bankruptcy filing, and be familiar with the local practices of the court. On the other hand, if your bankruptcy is a simple matter of too much unsecured credit card debt, and all of your assets are exempt, you may not need all that much help to get through your bankruptcy.
When you go for credit counseling, ask your counselor whether your situation seems routine, and what risks you face in fling for bankruptcy -- in your particular case. They're prohibited by law from giving you advice about whether you should file, but you may be able to get a pretty good sense of whether your case is simple or unusual, and whether your situation is so dire that bankruptcy is your best remaining alternative.
Chapter 10 of How to File for Chapter 7 Bankruptcy
See also, this study of the effect on bankruptcy reform on attorneys fees which documents attorneys fees in every judicial district in the US.
* Low income households may qualify for fee waivers or reduced fees.
Filing Your Papers With the Bankruptcy Court
There are several fees to pay when you file for Chapter 7 bankruptcy:
- $245 filing fee
- $46 administrative fee
- $15 trustee surcharge.
- TOTAL $306
Chapter 13 is slightly less.
- $235 filing fee
- $46 administrative fee.
- TOTAL $281
Chapters 6 and 7 of How to File for Chapter 7 Bankruptcy
Amended Bankruptcy Schedules
Adversary Proceeding Fee
Title 11 Administrative Fee
Record Retrieval Fee
Returned Check Fee
Notice of Appeal fee
Meeting with Trustee and Creditors (341 Meeting)
Within 20 to 40 days after you file your papers, you'll have a "meeting" with the bankruptcy court trustee. It's not a meeting in the traditional sense. You show up at a certain time, with a bunch of other people who have their meeting that day, and sit and wait for your name to be called.
At this meeting the trustee can ask you questions about the information you put on on your forms. Creditors can ask questions and object to or challenge the applicability of exemptions you are claiming.
How to File for Chapter 7 Bankruptcy, Chapter 7: Handling Your Case in Court (Routine Bankruptcy Procedures, Amending Your Bankruptcy Papers, Filing a Change of Address, Special Problems)
Tampa, FL Bar Association video walks you through the filing process and including the 341 hearing. Now also includes versions of the video in Spanish and Creole.
Before he recenly passed away, Arizona attorney Joseph C. McDaniel made an excellent series of videos about the bankruptcy process including this one about what to expect at the 341 hearing. These videos are still available, as part of his "bankruptcy homework" series. Parts of it are specific to Arizona (like the exemption amount you'd get if the trustee sells your car free and clear).
Filing Motions & Responding to Creditor Objections
Depending on your circumstances these are two things you may or may not need to do.
Filing Motions (Requests) With the Court
There may be some liens (creditors' claims against your property) that you can have removed by filing some extra paperwork after your original bankruptcy forms have been filed. (More information on this subject in Chapters 6 and 7 of How to File for Chapter 7 Bankruptcy)
Responding to Objections
Creditors or the trustee have 30 days after the 'close' of the creditors' meeting object to something on your forms. You may (but are not required to) respond before the court has a hearing on the matter. Depending on the objection you may need to hire some lawyer to properly respond to it.
Tip: If you are hiring an online service to prepare your bankruptcy papers, be sure to ask whether the standard fee includes filing motions for lien avoidance, or responding to the trustee's or a creditor's objection, or whether that costs extra.
Chapters 6 and 7 of How to File for Chapter 7 Bankruptcy
California Northern District Bankruptcy Court :: Local Rules ::
Mandatory "Debtor Education" Debt Management Course
As if you don't have enough hoops to jump through already, when you've completed all the other parts of your bankruptcy, you still don't get that magic piece of paper called the "discharge" until you complete a course in debt management.
This is yet another requirement motivated by Congress's assumption that people who file for bankruptcy wouldn't be broke if they weren't so careless with their money. Chances are, you really are broke, so you should see if you qualify for free or reduced rates. The law says you're entitled to it. Demand it.
Chapter 7 of How to File for Chapter 7 Bankruptcy
Total Cost to File Bankruptcy
The actual total cost of your bankruptcy will depend on:
1. Whether you qualify for a fee waiver.
2. Whether you are lucky enough to qualify for free legal aid services that happen to be available where you live.
3. Whether you handle the form preparation and filing yourself or pay someone to help you or do it for you.
4. How complicated your financial situation is -- for example, whether you're facing imminent foreclosure, whether your debts involve child support or back taxes, and whether you have valuable assets that are not fully protected by an exemption, such as a home.
The costs listed here do not include the value of any property you may need to give up in a Chapter 7 bankruptcy, or the amount you would have to pay over three to five years into a Chapter 13 plan. This is only the cost of going through the filing process.
How to File for Chapter 7 BankruptcyHow to File for Chapter 7 Bankruptcy (Renauer & O'Neil :: Nolo, 2017)
Where to Find These Resources
To simplify your search for the bankruptcy resources you need, whatever they might be, this website offers of a wide range of free information, tools, and links to useful bankruptcy products and services.
Listings of required forms and links to free downloadable files all federal bankruptcy forms.
Links to local rules and information from your court specifically designed for non-lawyers. Free downloadable files all federal bankruptcy forms.
Based on Official Form 22A, this calculator will give you a sense of whether you qualify for bankruptcy based on the official formula stated in federal law (11 U.S.C. 707(b)). The calculator applies local expense standards published by the U.S. government.
When you fill out your bankruptcy forms, you are asked what property you claim as exempt -- and the citation for it. This page gives you those citations and exemptions in summary fashion.
Step 4. Get on With Your Life
Congress changed the bankruptcy laws to make it harder for people to file. I created this website to make it easier.
The "Bankruptcy Reform and Consumer Protection Act of 2005" (BAPCPA) is a bad law. Some lawyers and law professors have taken to calling it the "Bankruptcy Abuse Reform Fiasco" (BARF). It's based on false assumptions about why people get into financial trouble and imposes additional rules and paperwork on people already overwhelmed by bad luck and unpayable debt.
Despite these new obstacles, bankruptcy law still provides valuable benefits to those who need it. It helps you get on with your life. Indeed, "getting on with your life" is the whole point of bankruptcy -- to put your debts behind you and go forward with a "fresh start." This website helps you learn about the benefits of bankruptcy and how to obtain them. It lists relevant and affordable products and services that can help you file for bankruptcy with a minimum of expense and hassle.
Information is not advice. Although this website will give you a lot of information about bankruptcy law and procedure, it does not -- and cannot -- tell you, specifically, how this information applies to your exact situation. Nor can it advise you which course of action is right for you.
Likewise, the listings of bankruptcy products and services are not endorsements. They are intended to expose you to the full range of tools and services that can help you file for bankruptcy. Think of these listings as a phone book, not a referral. It is up to you to evaluate the quality of those products or services and make your own purchasing decisions. If there are third-party reviews of products or services, I attempt to quote or link to them.
Remember to bookmark this website if you have found it helpful so far. You won't find a more comprehensive collection of bankruptcy resources and information anywhere on the Web. Make it your starting point for your bankruptcy research. And tell your friends.
Best of luck to you as you traverse your financial troubles,
co-author of How to File for Chapter 7 Bankruptcy, (Renauer & O'Neil :: Nolo, 2017)