How to File Bankruptcy from Arcadia, Step by Step

Filing bankruptcy from Arcadia follows the same federal steps as anywhere in the country: a credit counseling course, a petition filed with the U.S. Bankruptcy Court for the Central District of California, a meeting with the trustee, and a financial management course before discharge. Most Chapter 7 cases for San Gabriel Valley residents finish in about four months from filing. Chapter 13 cases last three to five years.

Here is what each step involves and what you will need to bring.

Step 1: Decide which chapter fits

Chapter 7 wipes out most unsecured debt, such as credit cards, medical bills and personal loans, in a few months. To qualify, your household income must be below the California median for your household size, or you must pass the means test after allowed expenses.

Chapter 13 is a three-to-five-year repayment plan. It is usually the better choice if you are behind on a mortgage or car loan and want to keep it, if your income is above the median, or if you own property worth more than California’s exemptions protect.

Step 2: Take the credit counseling course

Federal law requires a credit counseling course from an approved provider within 180 days before you file. It takes about an hour online or by phone. The provider gives you a certificate that is filed with your case.

Step 3: Gather your documents

• Pay stubs for the last six months
• Your most recent federal and state tax returns
• Bank statements
• A list of everyone you owe, with account numbers if you have them
• Any lawsuit papers, garnishment orders, foreclosure notices or repossession letters
• Your car registration and a recent mortgage statement if you own a home

Step 4: File the petition

Your attorney prepares the petition and schedules listing your income, expenses, property, debts and exemptions, then files them electronically. Cases for Arcadia, Pasadena and the rest of the San Gabriel Valley are generally handled by the Los Angeles Division of the Central District. The moment the case is filed, the automatic stay takes effect and most collection stops, including wage garnishments, lawsuits and scheduled foreclosure sales.

Step 5: Attend the meeting of creditors

About three to six weeks after filing, you meet with the bankruptcy trustee and answer questions under oath about your paperwork. Creditors rarely attend. Your attorney prepares you beforehand and attends with you.

Step 6: Complete the second course and receive your discharge

Before the discharge, you take a short financial management course. In a typical Chapter 7 case, the court enters the discharge about two months after the meeting of creditors. In Chapter 13, the discharge comes after you complete your plan payments.

Common questions from Arcadia filers

Do I have to go to court in downtown Los Angeles?

Most filers never see a courtroom. The meeting of creditors is the main event, and we will tell you in advance whether yours is by video or in person.

Will I lose my house or car?

Usually not. California’s exemptions protect a large amount of home equity in Los Angeles County, a limited amount of vehicle equity, household goods and retirement accounts. We check your numbers before filing.

Where to go from here

If you live in Pasadena, Alhambra, Temple City or another San Gabriel Valley city, the steps above are the same. Read more about bankruptcy options in Arcadia, or call for a free consultation.

Talk to an attorney in Arcadia. Free consultation at 255 E Santa Clara St, Suite 210, Arcadia, CA 91006. Call (626) 593-1558 or use the form below.

This article is general information, not legal advice for your situation.