You may be wondering whether you can eliminate your debt through a Chapter 7 or Chapter 13 bankruptcy in California. Filing Chapter 13 is a big decision. You are committing to a bankruptcy repayment plan that could last for up to five years. This is why understanding the bankruptcy differences and understand your Chapter 13 plan payment is crucial to making the most informed decision.
Chapter 13 Bankruptcy vs. Chapter 7 Bankruptcy California
A Chapter 7 bankruptcy case is generally referred to as “straight bankruptcy” or “liquidation bankruptcy“. In this bankruptcy, you would not have a repayment plan. However, your assets could be sold to repay your unsecured debts. These assets could be sold if you have substantial equity in the assets above the allowed bankruptcy exemptions. A bankruptcy exemption protects a certain amount of equity in an asset. To understand whether you qualify for a Chapter 7 bankruptcy, there is means-testing. We will cover that later.
A Chapter 13 bankruptcy case is a repayment plan. You repay a portion of your unsecured debts over a three to the five-year bankruptcy plan. You can keep your assets and get rid of debts that would not go away in a Chapter 7 case by filing under Chapter 13. However, you must have a steady source of income to qualify for a bankruptcy discharge (forgiveness of debt) under Chapter 13. You are also subject to the bankruptcy court during the bankruptcy plan, so you cannot sell assets or incur debt without court approval. Let’s look a little more closely at Chapter 13 bankruptcy in California.
Calculating your Chapter 13 Bankruptcy Payments in California
Calculating a Chapter 13 plan can be complicated. Your Chapter 13 plan payment in California depends on your personal financial situation, which is why we build a California Chapter 13 Plan Payment calculator below that you can use to estimate your Chapter 13 plan payment.
Factors used when calculating a Chapter 13 plan include, but are not limited to:
- Disposable Income — The amount of income you have each month after subtracting allowable payroll deductions and allowable living expenses from your gross monthly income.
- Assets — In some cases, the value of your assets could increase the amount of your Chapter 13 plan if your assets have large amounts of non-exempt equity. We discuss California bankruptcy exemptions in more detail below and how exemptions impact your Chapter 13 plan.
- Debts — Some debts must be paid in full through the Chapter 13 plan (priority unsecured debts such as taxes, alimony, child support, and administrative costs). Other creditors may receive partial payments, including unsecured debts, such as medical bills, credit card debt, and personal loans. Chapter 13 plans typically include back mortgage payments and car loan payments.
- Recent Financial Transactions — Some recent financial transactions could impact your Chapter 13 plan.
Try the Chapter 13 calculator above to estimate the amount of your California Chapter 13 plan payment. You can also explore detailed information about Chapter 13 by reading our article entitled “Chapter 13 Bankruptcy – Everything You Need to Know.” For example, a Chapter 13 plan can catch up on back mortgage payments, lower car payments, pay domestic support arrearage (back child support and alimony payments), and resolve tax debt.
California Bankruptcy Exemptions
Bankruptcy exemptions allow debtors to keep their property when filing for bankruptcy relief. The exemptions protect net equity (value of assets after deducting liens) in property from the court and your creditors.
Some states allow debtors to choose between federal and state bankruptcy exemptions. Debtors in California must use California bankruptcy exemptions. However, there are two sets of California bankruptcy exemptions to choose from when filing Chapter 13. You must choose one or the other. A careful analysis of each set of exemptions is required to determine which set offers the best protection for property in bankruptcy.
Furthermore, California’s bankruptcy exemptions can be found in California’s Code of Civil Procedure §703 and §704. The bankruptcy exemptions in California are adjusted periodically. You should check with the bankruptcy court or a bankruptcy attorney for the most recent figures.
In a Chapter 13 bankruptcy case, net equity in the property can impact your bankruptcy plan payment. Therefore, claiming the correct bankruptcy exemptions helps reduce the amount of your California Chapter 13 plan payment.
Where are California Bankruptcy Courts Located?
California is a large state, so it has four bankruptcy districts. The Bankruptcy Districts for California are:
- Central District of California (Divisions – Los Angeles, Santa Ana, San Fernando Valley, Riverside, & Northern)
- Eastern District of California (Divisions – Modesto, Fresno, and Sacramento)
- Northern District of California (Santa Rosa, Oakland, San Jose, and San Francisco)
- Southern District of California (no separate divisions)
For example, within each district, you may have multiple divisions. The divisions are listed beside each of the above districts. Each division serves various counties within that division. The county in which you reside when you file a Chapter 13 case determines the district and division that handles your case.
Who are the California Chapter 13 Bankruptcy Trustees?
California has 13 standing Chapter 13 trustees. Each trustee is assigned to cases based on the district and division for the case.
A Chapter 13 trustee administers your Chapter 13 case. The trustee reviews your bankruptcy forms and bankruptcy plan. The Chapter 13 trustee is responsible for receiving your bankruptcy payments and paying your creditors according to the terms in your confirmed Chapter 13 plan.
The current list of Chapter 13 trustees in California can be found on the United States Trustee website. We have also added the table below.
|Central||Amrane Cohen||(714) 621-0200|
|Central||Nancy K. Curry||(213) 689-3014|
|Central||Rodney A. Danielson||(951) 826-8000|
|Central||Kathy Anderson Dockery||(213) 996-4400|
|Central||Elizabeth F. Rojas||(818) 933-5700|
|Eastern||David P. Cusick||(916) 856-8000|
|Eastern||Russell D. Greer||(209) 576-1954|
|Eastern||Michael Meyer||(559) 275-9512|
|Northern||Martha G. Bronitsky||(510) 266-5580|
|Northern||David E. Burchard||(650) 345-7801|
|Northern||Devin Derham-Burk||(408) 354-4413|
|Southern||Thomas H. Billingslea, Jr.||(619) 233-7525|
|Southern||David L. Skelton||(619) 338-4006|
Do I Have Alternatives to Filing Chapter 13 in California?
Yes, you could have several alternatives to filing Chapter 13 in California. You might be eligible for a bankruptcy discharge in Chapter 7 if you meet the income requirements. You might also want to consider a debt consolidation loan or other debt settlement options. The key is to explore all debt-relief options, weigh the pros and cons of each option, and choose an option that works best for you.
Ascend helps you explore ways to get out of debt. Our Debt Settlement Guide and Debt Consolidation Comparison allows you to explore various debt-relief options, including filing for bankruptcy relief. We have also created the video below to summarize a Chapter 13 bankruptcy in California.
Finally, you can also find more information about Chapter 13 bankruptcies in our blog. If you are ready to get out of debt and begin rebuilding your finances, click here to begin the Ascend process. We have also created this video to help summarize a Chapter 13 bankruptcy in California.