If you’re considering filing bankruptcy in Los Angeles, CA, you’ll need to understand the types, costs, as well as some helpful advice to finding good attorneys.

Am I Qualified for Bankruptcy?

Filing for bankruptcy is a complex legal process that allows individuals or businesses to seek relief from overwhelming debt by either restructuring their debts or obtaining a fresh start through the discharge of certain debts. Bankruptcy laws in the United States, including those in Los Angeles, California, are governed by federal law but can vary depending on the specific chapter of bankruptcy you intend to file under.

1. Chapter 7 Bankruptcy Eligibility:

Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” is available to individuals and businesses, but eligibility is determined by a means test. The means test assesses your income, expenses, and family size to determine if you have sufficient disposable income to repay your debts. Here’s a breakdown of Chapter 7 eligibility:

• Means Test: To qualify for Chapter 7, your income must be below the median income for your household size in Los Angeles County. If your income exceeds this threshold, you may still be eligible if you can demonstrate that you have minimal disposable income after covering necessary expenses. An experienced bankruptcy attorney can help you navigate the means test.
• No Recent Discharge: If you’ve received a Chapter 7 discharge within the past eight years, you may be ineligible for another Chapter 7 discharge. However, you may still be able to file for Chapter 13 bankruptcy, which involves a repayment plan.
• Completing Credit Counseling: Before filing for Chapter 7 bankruptcy, you must complete a credit counseling course from an approved agency within 180 days of filing.

2. Chapter 13 Bankruptcy Eligibility:

Chapter 13 bankruptcy, often called “reorganization bankruptcy,” allows individuals to create a repayment plan to pay off their debts over three to five years. Unlike Chapter 7, there are no strict income limits for Chapter 13, but other eligibility requirements include:

• Stable Income: You must have a regular source of income to create and maintain a feasible repayment plan.
• Debt Limits: There are limits to the amount of secured and unsecured debt you can have and still be eligible for Chapter 13.
• Completing Credit Counseling: Similar to Chapter 7, you must complete credit counseling before filing for Chapter 13 bankruptcy.

3. Chapter 11 Bankruptcy Eligibility:

Chapter 11 bankruptcy primarily applies to businesses and individuals with substantial debts. It allows for the reorganization of debts and business operations. Eligibility requirements include:

• Debt Threshold: There is no specific debt limit to file for Chapter 11, but it’s typically used by entities with significant debt, such as corporations or individuals with substantial assets.
• Viability of Reorganization Plan: To qualify, you must demonstrate that you have a viable plan to reorganize and repay your debts.
• Credit Counseling: As with other chapters, you must complete credit counseling before filing for Chapter 11 bankruptcy.

It’s essential to consult with an experienced bankruptcy attorney in Los Angeles to assess your unique financial situation and determine the most appropriate chapter of bankruptcy for your needs. Bankruptcy laws can change, so it’s crucial to stay informed about any updates or modifications to eligibility criteria.

Additionally, keep in mind that certain debts, such as child support, alimony, most student loans, and certain tax obligations, may not be dischargeable through bankruptcy.

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Do You Need a Lawyer to File For Bankruptcy in Los Angeles, CA?

Filing for bankruptcy in Los Angeles, California, or anywhere else in the United States is a complex legal process that involves numerous forms, documentation, and court proceedings. While it’s not mandatory to hire a lawyer to file for bankruptcy, having an experienced bankruptcy attorney can greatly benefit you in several ways, making the process smoother and increasing the likelihood of a successful outcome.

1. Understanding Bankruptcy Laws: Bankruptcy laws are intricate and subject to change. A knowledgeable attorney can help you navigate the legal complexities, ensuring that you understand your rights, obligations, and the implications of your decisions. They will also guide you in selecting the appropriate chapter of bankruptcy (Chapter 7, 13, or 11) based on your specific financial situation.

2. Assessment of Eligibility: Determining whether you meet the eligibility criteria for bankruptcy can be challenging. A skilled attorney will conduct a thorough evaluation of your income, assets, debts, and other financial factors to determine your eligibility and help you choose the most advantageous chapter for your situation.

3. Completing and Filing Paperwork: Bankruptcy involves extensive paperwork, including schedules, statements, and petitions. An attorney will assist you in accurately completing these documents, ensuring that they are filed correctly and on time. Errors or omissions in your paperwork can lead to delays, dismissals, or even accusations of bankruptcy fraud.

4. Protection from Creditors: Once you file for bankruptcy, an automatic stay goes into effect, preventing creditors from pursuing collection actions like lawsuits, wage garnishments, or repossessions. Your attorney will communicate with creditors on your behalf, providing you with immediate relief from creditor harassment.

5. Asset Protection: Depending on the chapter of bankruptcy you file under, there may be exemptions that protect certain assets from being sold to repay creditors. An attorney can help you maximize your exemptions, potentially allowing you to retain more of your property.

6. Creation of a Repayment Plan: If you file for Chapter 13 bankruptcy, you’ll need to develop a feasible repayment plan that spans three to five years. An attorney can help you create a plan that meets court requirements while still allowing you to manage your financial responsibilities.

7. Legal Advocacy: In bankruptcy court, you may need to attend hearings, negotiate with creditors, and defend your interests. An attorney will act as your advocate, ensuring your rights are protected and helping you achieve the best possible outcome.

8. Avoiding Common Pitfalls: Bankruptcy has many rules and regulations, and individuals who represent themselves often make mistakes that can harm their cases. A seasoned attorney will guide you away from common pitfalls and ensure your case proceeds smoothly.

9. Post-Bankruptcy Guidance: After your bankruptcy is complete, an attorney can provide advice on rebuilding your credit and managing your finances responsibly. They can help you develop a plan for a fresh financial start.

10. Expertise in Local Rules: Bankruptcy procedures and practices can vary by jurisdiction. A local attorney in Los Angeles will be familiar with the specific rules and practices of the local bankruptcy court, ensuring that your case is handled in accordance with local standards.

While you’re not legally required to hire a lawyer to file for bankruptcy in Los Angeles, it’s highly advisable to do so. The expertise, guidance, and protection that an experienced bankruptcy attorney provides can be invaluable throughout the bankruptcy process, helping you achieve a more favorable outcome and a smoother financial recovery.

Cost to File Chapter 7 Bankruptcy in Los Angeles, CA

The cost to file for Chapter 7 bankruptcy in Los Angeles, California, involves several components, including court filing fees, attorney fees (if you choose to hire an attorney), and the cost of mandatory credit counseling and debtor education courses. Here’s a breakdown of these expenses:

1. Court Filing Fees: The standard court filing fee for Chapter 7 bankruptcy in the Central District of California, which includes Los Angeles, is approximately $395. This fee is subject to change, so it’s crucial to check the most current fee schedule on the official website of the U.S. Bankruptcy Court for the Central District of California or consult with a bankruptcy attorney.

2. Mandatory Credit Counseling and Debtor Education Courses: Before you can file for Chapter 7 bankruptcy, you are required to complete two courses: a credit counseling course and a debtor education course. These courses typically cost between $30 to $62 each. However, low-income individuals may qualify for fee waivers or reduced fees. It’s essential to select courses approved by the U.S. Trustee Program to ensure they meet the bankruptcy court’s requirements.

3. Attorney Fees: While it’s possible to file for Chapter 7 bankruptcy without an attorney (pro se), many individuals choose to hire a bankruptcy attorney to guide them through the process and ensure their rights and interests are protected. Attorney fees can vary widely based on factors such as the complexity of your case and the attorney’s experience. In Los Angeles, attorney fees for Chapter 7 bankruptcy often range from $1,720 to $2,850 or more. Some attorneys offer payment plans or reduced fees for low-income individuals.

4. Miscellaneous Costs: In addition to the above expenses, you may incur other costs related to your bankruptcy case, such as fees for obtaining credit reports, mailing, photocopying, or transportation to court hearings. These costs can vary depending on your specific circumstances.

5. Special Considerations: If you are unable to afford the court filing fee and other associated costs due to financial hardship, you may be eligible for a fee waiver. To request a fee waiver, you’ll need to submit a formal application to the bankruptcy court, demonstrating that you meet the income and expense criteria.

While bankruptcy can provide relief from overwhelming debt, it’s essential to carefully consider the costs and potential consequences of filing for Chapter 7 bankruptcy. Bankruptcy can impact your credit score and financial future, so it’s recommended to consult with an attorney to determine whether bankruptcy is the right option for your specific situation and explore alternative solutions if appropriate.

Cost to File Chapter 11 Bankruptcy in Los Angeles, CA

Filing for Chapter 11 bankruptcy in Los Angeles, California, involves a complex and costly process, primarily because Chapter 11 is typically used by businesses or individuals with substantial debts who aim to reorganize their financial affairs. The cost of filing for Chapter 11 bankruptcy can vary significantly depending on the complexity of your case, the size of your business, and the fees associated with legal representation. Here’s a breakdown of the main costs involved:

1. Court Filing Fees: The initial filing fee for a Chapter 11 bankruptcy case in the Central District of California, which includes Los Angeles, is substantial. However, these fees are subject to change, so it’s essential to check the most current fee schedule on the official website of the U.S. Bankruptcy Court for the Central District of California.
2. Attorney Fees: Chapter 11 bankruptcy is highly complex and typically requires legal representation. Attorney fees for Chapter 11 cases can vary significantly based on the size and complexity of the business or individual’s financial situation. They can range from tens of thousands to hundreds of thousands of dollars. It’s essential to consult with experienced bankruptcy attorneys in Los Angeles to obtain accurate estimates and understand the scope of legal services included in the fees.
3. Fees for Other Professionals: In many Chapter 11 cases, businesses or individuals hire other professionals, such as financial advisors, accountants, and appraisers, to assist with the bankruptcy process. These professionals may charge significant fees based on their services and expertise.
4. U.S. Trustee Fees: In Chapter 11 cases, the U.S. Trustee may assess quarterly fees based on the debtor’s disbursements or the value of the debtor’s assets. These fees can add up over the course of the bankruptcy case.
5. Administrative Costs: Chapter 11 cases can involve administrative costs such as court-appointed examiners, trustees, or other professionals, whose fees may be paid from the bankruptcy estate.
6. Plan Confirmation Fees: If you propose a reorganization plan, there may be additional court fees associated with plan confirmation proceedings.
7. Miscellaneous Costs: There may be additional expenses related to your specific Chapter 11 case, such as costs for filing motions, obtaining credit reports, or conducting appraisals. These costs can vary widely.
8. Ongoing Operational Costs: During the Chapter 11 process, the business or individual must continue to operate, which may involve ongoing operational expenses and financial obligations.

Given the substantial costs involved in Chapter 11 bankruptcy, it’s crucial to carefully assess whether Chapter 11 is the right option for your financial situation. It’s recommended to consult with experienced bankruptcy attorneys and financial professionals to determine the feasibility of a successful reorganization.

Additionally, some provisions of the Small Business Reorganization Act (SBRA) may make Chapter 11 more accessible and affordable for certain small businesses, simplifying the process and reducing costs. It’s advisable to discuss these provisions with your attorney if you qualify as a small business debtor.

Cost to File Chapter 13 Bankruptcy in Los Angeles, CA

Filing for Chapter 13 bankruptcy in Los Angeles, California, involves several costs and fees, including court filing fees, attorney fees, credit counseling and debtor education fees, and potential plan administration fees. Here’s a breakdown of the primary costs associated with Chapter 13 bankruptcy:

1. Court Filing Fees: The court filing fee for a Chapter 13 bankruptcy case in the Central District of California, which includes Los Angeles, is approximately $390. This fee may be subject to change, so it’s essential to verify the most current fee schedule on the official website of the U.S. Bankruptcy Court for the Central District of California.
2. Attorney Fees: While it’s possible to represent yourself (pro se) in a Chapter 13 bankruptcy case, many individuals choose to hire an experienced bankruptcy attorney to guide them through the process. Attorney fees for Chapter 13 cases can vary depending on factors such as the complexity of your case and the attorney’s experience. Typically, attorney fees for Chapter 13 bankruptcy range from around $3,800 to $6,950 or more. Some attorneys offer payment plans to make their services more accessible.
3. Credit Counseling and Debtor Education Fees: Before filing for Chapter 13 bankruptcy, you are required to complete a credit counseling course and a debtor education course from approved agencies. These courses usually cost between $28 and $67 each. Some agencies offer fee waivers or reduced fees for low-income individuals.
4. Plan Payments: In a Chapter 13 bankruptcy, you’ll propose a repayment plan to pay off your debts over three to five years. The monthly plan payments are a significant cost, as you’ll be required to make regular payments to the bankruptcy trustee, who will distribute the funds to your creditors according to the approved plan.
5. Plan Administration Fees: In some jurisdictions, there may be a nominal plan administration fee that the trustee deducts from your plan payments. The specific fee can vary, so it’s important to consult with your attorney and the trustee to understand any applicable fees in your case.
6. Miscellaneous Costs: There may be additional expenses related to your Chapter 13 case, such as fees for obtaining credit reports, notary services, or photocopying documents. These costs can vary depending on your specific circumstances.

Ultimately, while Chapter 13 bankruptcy does involve costs, it can be an effective way to address overwhelming debt while maintaining control of your assets and working toward a more stable financial future. The assistance of an experienced attorney can be invaluable in achieving a successful Chapter 13 repayment plan.

Reliable Bankruptcy Attorneys in Los Angeles, CA

Below is a list of reputable bankruptcy attorneys in Los Angeles, CA. They can help you with both personal and business bankruptcy information.

Bankruptcy Attorney
554 S San Vicente Blvd suite 160-f, Los Angeles, CA 90048, United States

Wadhwani & Shanfeld
714 W Olympic Blvd #702, Los Angeles, CA 90015, United States

The Attorney Group, Professional Law Corp
3435 Wilshire Blvd Suite 1111, Los Angeles, CA 90010, United States

The Law Office of Attorney Frank Guilardi
1605 W Olympic Blvd # 9102, Los Angeles, CA 90015, United States

Bankruptcy Law Firm of Jasmine Firooz
1605 W Olympic Blvd Ste 9021, Los Angeles, CA 90015, United States

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