- You can file bankruptcy with "bare bones" paperwork and follow up with a fully completed paperwork packet detailing your assets, income and debts, notes the United States Bankruptcy Court Southern District of California. This immediately stops creditors from contacting you, suing you or seizing your collateral, such as a vehicle or a house. But if you don't submit the full information, your case will be dismissed.
- If you have a lot of assets and want to file bankruptcy, you probably need to hire a qualified attorney to assist you. As of 2011, California offers several types of asset exemptions. The first option allows residents to keep up to $75,000 of real estate and personal property and unlimited pensions, insurance policies, disability benefits and related awards. The other available option enables Golden State residents to preserve up to $20,275 of real estate equity, all retirement and wrongful death benefits, up to $20,275 of personal injury awards and as much as $3,300 in motor vehicle equity.
- To file Chapter 7, you must either earn less than California's annual median income level or pass a federal means testing formula to prove economic hardship. As of 2011, the annual median income figure for a single resident living in California was $48,140, while the level for a couple was $64,878, according to the U.S. Trustee Program. Families of three could bring in up to $70,890 a year, while a household of four could earn as much as $79,477 annually.
- You must attend a 341 hearing of creditors or your case will be dismissed, warns the United States Bankruptcy Court Southern District of California. Creditors can show up and object to your case, but this rarely happens unless they believe you lied to get credit or hid assets to file bankruptcy, according to the book "How to File for Chapter 7 Bankruptcy." You or an attorney must also attend the discharge hearing where a California bankruptcy judge will rule whether or not your bankruptcy case was accepted.
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