The Procedure

Time frame of a typical Bankruptcy

Bankruptcy Attorneys in Oakland on typical time line of a Bankruptcy

The entire length of a typical bankruptcy case is approximately four to six months. After the bankruptcy petition is being filed the court notifies your creditors about your bankruptcy. A bankruptcy trustee is being assigned to your case. The trustee will review your petition in light of how much non-exempt assets he can take from you and liquidate for the benefit of your creditors. A well prepared bankruptcy petitions avoids any surprises by allocating the available exemption amounts appropriately to protect all of your property. It takes experience to know how to interpret the bankruptcy exemptions to gain maximum protection. Normally there will be only one court hearing. At this so-called creditor’s meeting the trustee can question you about the documents you filed and about any particular charges or transfers you made within a certain time frame before you filed for bankruptcy see Section 523 (a) (C)(i)(I)(II). It is important to know when to file the bankruptcy petition because a filing that is too early may cause the dismissal of the case or a filing that is too late may disqualify you under the means test in certain situations.

Creditors must cease collections

Once the court has notified the creditors of your bankruptcy your creditors must stop collections. The bankruptcy filing creates an immediate automatic stay which however can be lifted upon request by a creditor or by the trustee. The automatic stay plays an important role today in foreclosure proceedings because it stops any scheduled trustee sale or any other foreclosure action. The lender can file a motion with the court to request relief from the automatic stay but it takes time to get such a motion approved. This often will give the homeowner time to figure out what to do or even to renegotiate the mortgages.

The Bankruptcy Trustee

Bankruptcy trustees are appointed by the bankruptcy court. Some courts have full time and other courts have rotating trustees. Some of the trustees are also lawyers, CPA’s or other professionals.

It is the job of the trustee to examine your bankruptcy petition for mistakes or inconsistencies and to make sure that your creditors get paid as much as possible. Therefore the trustee is especially interested in your assets and in how much he can take from you and give to the creditors. It is the job of the bankruptcy lawyer to help you exempt and protect as much of your belongings as possible. The trustee gets paid a percentage out of the assets he recovers from you for the creditors and in addition receives a flat fee for each case he handles. You will receive the name and contact information for the trustee who is handling your case in the official notice of filing a few days after your bankruptcy petition has been filed.

Non-Exempt Assets

California has its own exemption system which determines what type of property and how much a person filing for bankruptcy is allowed to keep and what has to be turned over to the bankruptcy trustee.

When you file for bankruptcy it is your responsibility to claim property as exempt so that the trustee will not take it. In order to know what is exempt and what is non-exempt it is important to understand California’s exemption laws. All property is non-exempt and cab be taken away by the trustee unless it falls under an exemption category laid out in California Code of Civil Procedure 703 and 704.

Whether you can use California’s exemption rules depends on how long you have lived in California before you filed for bankruptcy and can become very complicated in some instances.

Exemption Amounts

The current exemption amounts can be found on the California Judicial Council website at: California has two exemption systems one of which you have to chose. System one and system two exempt different types and amounts of your property and your choice should be based on a thorough review and inventory of all of your property. A rule of thumb is that if you have substantial equity in your home you will chose exemption system 1. If on the other hand you are a renter or do not have extensive equity in your home you may protect more of your property by choosing exemption system 2. The exemption of property is one of the most difficult and complicated areas in bankruptcy law and should be handled by a California bankruptcy lawyer who knows the state specific laws.

Please click here to read a brief description of the most important facts about the two exemption systems.

We are bankruptcy attorneys in Oakland, San Francisco, Contra Costa and Sacramento. We serve clients in the counties of Contra Costa, Solano, Sacramento, Alameda and San Francisco.