How to File Bankruptcy for Free in California

Collect Your California Bankruptcy Documents

Much of the information the court needs to process your bankruptcy petition will come from the bankruptcy forms you fill out. You’ll need to look back at some of your financial documents to get the information for these forms. You’ll also need to gather additional documents to submit to the bankruptcy trustee during the bankruptcy process. The following are documents you’ll need at some point during the bankruptcy process, even if you hire an attorney:

• Paycheck stubs from the last 60 days.

• Income tax returns from the last two years.

• Recent bank statements.

The following is a list of other documents that are helpful to have during the bankruptcy proceeding:

• Bank statements from the past 6-12 months. These can help you calculate your current living expenses.

• Bills and statements from creditors and lenders.

• Any letters from collection agencies or other third-party debt collectors.

• Your credit report. Federal law entitles you to one free credit report each year from each of the three consumer credit reporting agencies (Equifax, Experian, and TransUnion). 

In addition to keeping an eye on your credit, credit reports will help you identify your debts and creditors. If you use Upsolve’s free filing tool to file your Chapter 7 bankruptcy, it will pull your credit report for you.

Take a Credit Counseling Course

The Bankruptcy Code requires that you complete a credit counseling course 180 days before you declare bankruptcy to the court. The purpose of this class is to inform you of other debt-relief options that are available. This class isn’t free, but it shouldn’t cost more than $50. If you shop around, you can often find a class that’s approved for California for less than that. In some cases, you can get a fee waiver and take the credit counseling course at no cost to you.

You’ll see that most of these classes can be completed remotely, either over the internet or by telephone. When you’re done with your class (which should only take a few hours), you’ll get a certificate of completion. You’ll submit this certificate to the court along with your other bankruptcy forms. 

Complete the Bankruptcy Forms

Most of the forms you’ll need to file bankruptcy are the same forms everyone else uses to file bankruptcy in the U.S. You can get these for free as fillable PDFs from the United States Courts website. There are also some local forms that are specific to the California district (Northern, Eastern, Central, or Southern) where you file your bankruptcy petition.

If you’ve hired an attorney to handle your bankruptcy, you probably won’t need to complete these forms yourself. Instead, you’ll probably hand over documents and fill out a questionnaire for your attorney. They will then fill out these forms for you. 

If you use Upsolve to file your bankruptcy, then you’ll complete an online questionnaire and Upsolve’s software will generate your bankruptcy forms based on the information you gave.

Get Your Filing Fee

When you file Chapter 7 bankruptcy, you have to pay a fee of$338.But if your income is less than 150% of the federal income poverty guidelines, then you qualify to apply for a fee waiver. To see what these guidelines are, you can scroll down to the California Fee Waiver Eligibility table below.

If you don’t qualify for the fee waiver and can’t afford to pay the $338 filing fee, you have another option: applying to the court to pay your filing fee in four installments within 120 days of filing bankruptcy. 

Taking advantage of the installment payment plan is best for situations where you need to file bankruptcy as quickly as possible to make use of the automatic stay. You might need to do this if you’re dealing with wage garnishment. But if you can wait to file, it’s usually a better idea to forgo paying the filing fee in installments. This way you don’t risk the court throwing out your case because of a missed payment.

Print Your Bankruptcy Forms

Many individuals choosing to represent themselves in their bankruptcy matter will be filing their bankruptcy forms in person or by mail. This means printing out hard copies of the completed bankruptcy forms. If you have access to a computer and printer, this shouldn’t be a major issue. If you don’t have access, you’ll need to find a library, copy shop, shipping store, or office supply store that can print the forms for you (often for a fee). Regardless of where you print your forms, keep the following requirements in mind:

• Print the forms in black ink, not color.

• Use white, letter-size paper (8.5” x 11”).

• Only print on one side.

If possible, print out two copies of your completed bankruptcy forms. Having a second copy for your records may come in handy. Also, many of the bankruptcy forms look the same or consist of multiple pages. So use a checklist to double-check your packet of forms to ensure they’re all there, in the proper order, and you signed all the necessary pages. 

If you use Upsolve’s filing too to prepare your forms, you’ll get your bankruptcy documents electronically with special dividers that tell you where you need to sign. If you’ve hired an attorney, they’ll most likely print out the forms for you or file your documents electronically. This means you don’t need to print them unless you want a copy for your records.

File Your Forms With the California Bankruptcy Court

California is divided into four districts. Each district has its own filing rules for individuals handling their bankruptcy cases without an attorney. In all districts, individuals can file by mail or in person. You can go yourself or have someone else drop off your forms for you. Also, the Central, Southern, and Eastern Districts allow individuals filing on their own to electronically file some or all of their bankruptcy forms. 

Each district may also have special rules in place for filing court documents during the coronavirus pandemic. These rules are constantly changing, so it’s best to check with the COVID-19 webpage of the Northern, Central, Southern, and Eastern Districts to check for the most up-to-date news about court operations.

Mail Documents to Your Trustee

Filing bankruptcy is the hardest part, but there’s still a little bit of work to do after your forms get filed. For example, you’ll get assigned a bankruptcy trustee, which is an independent party to the case. The trustee’s job is to help ensure the information you’ve provided is accurate and that creditors get paid from the sale proceeds of any non-exempt property. To help accomplish these tasks, you’ll need to send your trustee certain financial documents at least seven days before your 341 creditors’ meeting. These documents include:

• Bank statements for any bank account you had open when you filed for bankruptcy. These statements must cover a time period that includes the date you filed bankruptcy.

• Your two most recent federal income tax returns.

If you’re not sure what to send or who to send it to, don’t worry. You’ll most likely get a letter from your trustee explaining who they are and what they need from you.

Take a Debtor Education Course

To be eligible for bankruptcy discharge of your debts, you’ll need to take a second financial course that covers personal financial management topics. There’s some flexibility in when you must take this class, but you must finish it within 60 days of the 341 creditors’ meeting. If you fail to do so, the court could close your case without discharging any of your debts. Many organizations offer this class, but you’ll need to complete it from an approved provider.

Once your class is done, you’ll receive a certificate of completion. Depending on how the course provider operates, they’ll either file this certificate with the court for you or have you do it yourself.

Attend Your 341 Meeting

For most filers, the 341 meeting (also known as a 341 creditors’ meeting or meeting of creditors) will be the only time you need to go to court. That said, currently all courts are holding these meetings virtually due to the coronavirus pandemic.

Most in-person 341 meetings take place in a meeting room in front of your trustee with you and sometimes your creditors present. The purpose of this meeting is to let the trustee and creditors ask you questions. But most of the time, creditors won’t attend this meeting, so it’ll just be the trustee asking you questions about your case and finances. 

This might seem intimidating, but it shouldn’t be. As long as you’ve been honest on your bankruptcy forms and you answer the trustee truthfully, you should get through the 341 meeting without issue. 

To help make this meeting go according to plan, it might help to prepare for your 341 meeting. You also need to bring acceptable forms of identification and proof of your Social Security number. You’ll be done with your 341 meeting before you realize and ready for the next step in the bankruptcy process.

Dealing with Your Car

If you want to keep your car, California has exemptions in place that make it possible for most people to keep their car during bankruptcy. But even with applicable exemptions, how bankruptcy law deals with your car will largely depend on whether you want to keep it and how much it’s worth.

If your vehicle has a lease and you want to keep it, you’ll need to continue making your lease payments. You’ll also need to inform the court of your decision with a Statement of Intentions. If you don’t want the leased vehicle anymore, then the terms and procedures for returning your vehicle will depend on what your lease agreement says.

If your vehicle is paid off, then you can keep it as long as its fair market value is less than the exemption provided for personal vehicles under California law, which is $3,525, plus any available wildcard exemption. If you’re still paying on a car loan and you have positive equity — meaning your car is worth more than you owe on it — you can keep it as long as you stay current with your monthly payments and its equity is less than the available exemption.

If your vehicle is subject to a car loan, but its value is less than what you owe on it (it’s “underwater”), then you can surrender it if you don’t want it anymore. Surrendering lets you get rid of the vehicle along with its outstanding loan balance. This is a good approach if you can’t afford your current vehicle during bankruptcy, but you have plans to buy another one after your bankruptcy is over.

If you still want your underwater vehicle, then you can enter into a reaffirmation agreement. This requires you to continue making your monthly car loan payments. 

Finally, you can redeem your vehicle. This lets you keep your vehicle by letting you purchase it for fair market value instead of paying off the remaining balance on your car loan. This makes it possible to own your vehicle outright for less than what you’d have to pay for the car loan. The catch is that redeeming your vehicle requires you to pay for the vehicle in one lump sum.