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Benefits of filing for bankruptcy California, and what all you can keep even under bankruptcy

Bankruptcy is like a financial restart, allowing you to eliminate most of your overwhelming debt, and emerge as a more effective user and a wiser user of your financial resources. Filing for bankruptcy in California can stop creditors’ collection activities, and ultimately discharge or eliminate many of your current debt. However, it will not eliminate all of your debts. Some debts that cannot be eliminated after filing bankruptcy California include child alimony and support, government penalties, and taxes. However, before filing bankruptcy California, you may want to consider alternative options, such as debt consolidation, debt management plans, debt settlement, and nonprofit credit counseling.   

You should consider hiring an experienced bankruptcy attorney for filing bankruptcy in California, who will decide which type bankruptcy will be better suited for your circumstances. If your debts have become overwhelming and you cannot repay them despite your best efforts, your experienced bankruptcy attorney at Recovery Law Group may file bankruptcy California under Chapter 7 of the US Bankruptcy Code. To qualify for Chapter 7 bankruptcy, your average monthly income should be less than the average median income in California for the size of your household.   

However, some assets will remain exempt under Chapter 7 bankruptcy, which include:  

  • A certain amount of home equity  

  • Clothing and many household items  

  • Car of a certain value   

  • Tools of trade  

  • Most insurance benefits  

  • Spousal or child support  

  • Most public benefits, and   

  • Retirement accounts  

Reorganization plan under Chapter 13 bankruptcy   

However, if you have a regular source of income, and are left with a significant amount of money each month to repay your creditors, you may be advised for filing bankruptcy California under Chapter 13. Under Chapter 13, you will be given an extended period of three to five years to repay your outstanding debts. Any debts remaining after Chapter 13 bankruptcy will be discharged or eliminated. However, you will be required to attend a credit counseling meeting with your creditors from a recognized counseling agency.   

Uniform Fraudulent Transfers Act (UFTA)  

While filing bankruptcy California, you have to keep certain things in mind; transferring assets is one of them. The court does not look kindly to any kind of transfer of property (like jewelry, car, home, etc.) being made within two years prior to a bankruptcy filing California. In case you have transferred an heirloom piece of jewelry to your child and due to some misfortunate turn of events you had to file for bankruptcy (chapter 7) the court will observe this transfer of jewelry as an act of hiding assets. According to Los Angeles-based law firm Recovery Law Group, U.S. Bankruptcy Code 11 section 548 views such transfers as fraudulent if the reasonable value of the asset is not provided to the debtor on its transfer. As per California state law, there exists an additional 4-year lookback period (not longer than 7 years) under its Uniform Fraudulent Transfers Act (UFTA).   

If you wish to file for bankruptcy in California, you need to pay attention to any transfer of assets made within the last four years. In case you have gifted your kids, friends or relatives any jewelry, ensure that you get it back before filing bankruptcy California. If there exists a contract or a document trail for any transfer of assets get it annulled or get another contract drawn to have the assets transferred back to your name. Having any or all assets back in your name is essential if you want to be in the good grace of the bankruptcy court.

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