Bankruptcy | California Courts | Self Help Guide (2024)

FAQs

How long does bankruptcy take in CA? ›

A Chapter 7 bankruptcy will usually take three to six months, and involve the following sequence of events: Completion of a credit counseling class within six months of filing. These classes are usually conducted over the Internet or by phone.

Each of the 94 federal judicial districts handles bankruptcy matters, and in almost all districts, bankruptcy cases are filed in the bankruptcy court.

The 2-4-6-8 Rule of Filing Bankruptcy Again

Two Years – Two years between a prior Chapter 13 bankruptcy case and a new Chapter 13 Case. Four Years – Four years between a prior Chapter 7 bankruptcy case and a new Chapter 13 case. Six Years – Six years between a prior Chapter 13 bankruptcy case and a new Chapter 13 case.

Priority Regained: Freeze Rule in Bankruptcy

In bankruptcy, the freeze rule freezes the priority of a security interest as of the petition date, which will remain the priority throughout the bankruptcy case.

Not only are the fees of Chapter 7 bankruptcy lower, but you also end up paying less to your creditors.

The bankruptcy case trustee, U.S. Trustee, or other parties can ask the court to deny a discharge of debts if a debtor provides false information. This may result in the loss of property and dismissal of a bankruptcy case without a discharge and loss of the bankruptcy case filing fee.

US bankruptcy filings by year

The number of U.S. corporate bankruptcy filings so far in 2024 is “higher than any comparable figure in the prior 13 years,” according to data from S&P Global Market Intelligence.

With more than 39 million residents, California is the most populous state in America. It also has the highest number of bankruptcy filings in the nation. There were 38,597 bankruptcy cases filed in the state in 2023.

What is the difference between Chapter 7 and 13? ›

A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.

Chapter 13 – See Bankruptcy Code Section 1307 – A debtor has a right to dismiss its Chapter 13 bankruptcy case if the bankruptcy began as a Chapter 13 case, but the court may place restrictions on a debtor's ability to file a subsequent bankruptcy case.

Your Credit Score Will Likely Suffer

Bankruptcy is recorded on your credit reports and remains there for seven years from the filing date for Chapter 13, or 10 years from the filing date for Chapter 7. A bankruptcy on your credit reports has a deep, long-lasting negative impact on your credit scores.

A bankruptcy under Part IV of the Bankruptcy Act can be made in two ways: Debtor's Petition - an application by the debtor. On the date the application is accepted, the person is made bankrupt and their details are registered on the NPII. Creditor's Petition - an application by a creditor to make a debtor bankrupt.

The most common types of bankruptcy are chapter 7, which are liquidating bankruptcy, and chapter 13 cases, often used by individuals who want to catch up on past due mortgage or car loan payments and keep their assets.

Creditors holding the highest priority claims, most likely 1^st lien debt (e.g., term loans and revolvers), must be paid out first before subordinate claim holders next in line such as bondholders receive any share of the proceeds.