Santa Ana Bankruptcy Attorney

Understanding the Bankruptcy Process: A Step-by-Step Guide

Navigating the complexities of bankruptcy can be overwhelming, but having a clear understanding of the process can empower you to make informed decisions. At Fitzgerald & Campbell, we believe in equipping our clients with the knowledge they need to feel confident every step of the way. Here’s a simplified breakdown of what to expect when filing for bankruptcy:

1. Initial Consultation: Begin with a free consultation where we assess your financial situation and discuss your options.
2. Gathering Documentation: Compile necessary documents, including income statements, debts, and assets, to prepare for filing.
3. Filing the Petition: Our experienced attorneys will help you file the bankruptcy petition with the court, ensuring all information is accurate.
4. Automatic Stay: Once filed, an automatic stay is enacted, halting most collection efforts and providing you relief from creditor harassment.
5. 341 Meeting of Creditors: Attend a meeting where creditors can ask questions about your financial situation, typically held a few weeks after filing.
6. Debt Discharge: If you qualify, your eligible debts will be discharged, giving you a fresh financial start.
7. Post-Bankruptcy Guidance: We provide ongoing support and resources to help you rebuild your credit and financial health after bankruptcy.

Understanding each stage of the bankruptcy process can alleviate anxiety and help you feel more in control. Our dedicated team at Fitzgerald & Campbell is here to guide you through every step, ensuring you have the support and expertise you need. Reach out today to learn more about how we can assist you on your path to financial freedom.

What Is the Bankruptcy Act of 2005?

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 went into effect on October 17, 2005, and provides the most significant (and controversial) overhaul of the bankruptcy system in over 25 years.

Backed by the credit card, retail, and banking industries, the new legislation makes it more difficult for people to erase all of their debts in bankruptcy while forcing others on payment plans instead.

What Is the Means Test?

The biggest impact of the 2005 law change was the “Means Test”. This test determines if debtors “qualify” for bankruptcy. The means test is a fairly complex mathematical formula that has been created, taking into consideration where you live and the costs related to your income to determine what your “Means” are. If you are above a certain level of “Means,” it is “presumed” that you do not qualify for bankruptcy. If you are below that number, you are presumed to qualify. 

As of 11/1/23, the maximum gross annual income limits to automatically qualify for Chapter 7 bankruptcy in California are:

• One Earner: $71,861
• Two People: $92,781
• Three People: $105,130
• Four People: $123,451

Chapter 7 & Chapter 13 Bankruptcy 

If you qualify and have no assets (of significant value) a Chapter 7 bankruptcy is a very effective (some debts wiped out entirely), relatively quick (3-4 months average), and financially painless process. 

Chapter 7 is often referred to as a “No Asset” case and is not terribly complex, although each case is different. The only real expense is attorney fees and court costs, so it is generally far less expensive than other alternatives.

Chapter 7 is often referred to as a “No Asset” case and is not terribly complex, although each case is different. The only real expense is attorney fees and court costs, so it is generally far less expensive than other alternatives.

A major hurdle for homeowners, and other secured debts like autos, is that their debts are not going to be forgiven unless they are willing to give up the house or car too. If you want to keep property attached to secured debt, generally you must pay for them.

You can seek bankruptcy protection, which is why many homeowners file a Chapter 13. In a Chapter 13 bankruptcy, a “Plan” is filed, argued, and so ordered by the judge. This Plan lays out what you are going to pay and to whom. They usually last for 3-5 years.