To file for bankruptcy in California, you complete a required credit counseling course, decide between Chapter 7 and Chapter 13, choose one of California’s two state exemption systems, and then file a petition with supporting schedules in the federal bankruptcy court for the district where you live. After filing, you attend a short meeting with the trustee, finish a second financial education course, and receive your discharge if everything checks out. The process runs on federal bankruptcy law, but California’s own exemption rules decide what property you get to keep, and picking the wrong set can cost you thousands.
Choose Between Chapter 7 and Chapter 13
Most individual filers in California use one of two chapters. Chapter 7 is liquidation: a court-appointed trustee reviews your assets, sells anything not protected by an exemption, and pays creditors from the proceeds. In return, most unsecured debt is wiped out. The case usually wraps up in about four months from filing.1United States Courts. Discharge in Bankruptcy – Bankruptcy Basics In practice, most consumer Chapter 7 cases in California are “no-asset” cases, meaning your exemptions cover everything and the trustee has nothing to sell.
Chapter 13 is a repayment plan. You propose a three-to-five-year plan and make monthly payments to a trustee, who distributes the money to creditors.2United States Courts. Chapter 13 Bankruptcy Basics Remaining qualifying debts are discharged at the end. Chapter 13 is the usual choice if you’ve fallen behind on a mortgage or car loan and want to catch up while keeping the property.
Chapter 7 Means Test
Chapter 7 eligibility depends on the means test, which compares your household income to California’s median. For cases filed on or after April 1, 2026, the California figures are:
- 1 person: $79,253
- 2 people: $102,797
- 3 people: $116,541
- 4 people: $139,071
- Add $11,100 for each additional person
If your income is below the median for your household size, you qualify. If it’s above, a second calculation subtracts allowable expenses to see whether you have enough disposable income to fund a repayment plan. Where that monthly figure multiplied by 60 clears certain thresholds, the court presumes a Chapter 7 filing would be abusive and you’d need to file Chapter 13 instead.3United States Department of Justice. Means Testing4Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion
Chapter 13 Debt Limits
Chapter 13 has its own gate. For cases filed between April 1, 2025, and March 31, 2028, your secured debts can’t exceed $1,580,125 and your unsecured debts can’t exceed $526,700. Above those limits, Chapter 13 isn’t available and you’d need to look at Chapter 11.
Complete Credit Counseling and Gather Documents
Before you file, you must complete a credit counseling session with a nonprofit agency approved by the U.S. Trustee’s office. The session has to happen within 180 days before your filing date, or the court will dismiss your case.5United States Department of Justice. Credit Counseling and Debtor Education Information It covers budgeting basics and alternatives to bankruptcy, and you get a certificate of completion that gets filed with your petition. Most approved agencies offer the session online or by phone, and fees typically run $15 to $50.
You’ll also need a substantial paper trail before you can complete the forms accurately. Federal law requires you to provide the trustee with your most recent federal tax return or transcript at least seven days before the creditors’ meeting.6GovInfo. 11 USC 521 – Debtors Duties Beyond that, gather:
- Pay stubs for the past six months, tax returns for the last two years, and records of any freelance or self-employment income
- Statements from every creditor, including credit cards, medical bills, personal loans, and collection accounts
- Bank statements, retirement account statements, vehicle titles, real estate deeds, and insurance policies
- Monthly expense records: mortgage or rent, utilities, and court-ordered obligations like child support
Incomplete records are where cases go sideways. Understating assets or leaving out a creditor can mean debts survive the discharge or the case is dismissed. The official bankruptcy forms are available on the U.S. Courts website.7United States Courts. Bankruptcy Forms
Pick a California Exemption System
California opted out of the federal exemption list under 11 U.S.C. § 522(d) and created two separate state systems. You choose one or the other. You cannot combine them, and joint spouses must use the same system.
System 1 (CCP § 704)
System 1 is generally better if you own a home with meaningful equity. Its homestead exemption protects equity in your primary residence equal to the greater of the countywide median sale price for a single-family home (capped at $600,000) or a floor of $300,000, adjusted annually for inflation.8California Legislative Information. California Code of Civil Procedure 704.730 Other notable protections include up to $8,625 in vehicle equity, up to $10,950 in tools of the trade, and up to $8,625 in accrued wages or vacation pay.
System 2 (CCP § 703.140)
System 2 tends to fit renters or filers without much home equity. The homestead exemption is only $29,275, but System 2 offers a wildcard exemption of $1,550 plus any unused portion of that homestead figure, which effectively gives you over $30,000 to apply to any property you choose.9California Legislative Information. California Code of Civil Procedure 703.140 System 2 also covers up to $7,500 in vehicle equity, up to $8,725 in tools of the trade, and up to $1,750 in jewelry.
A homeowner in Los Angeles with $400,000 in equity needs System 1. A renter with $20,000 in savings and no real estate will almost always do better under System 2’s wildcard. Getting the choice wrong can mean losing property you could have kept, so it’s worth working through the math carefully before you file.
File Your Petition
Which District
California has four federal bankruptcy court districts: Northern (San Francisco, Oakland, San Jose, Santa Rosa), Eastern (Sacramento, Fresno, Modesto), Central (Los Angeles, Riverside, Santa Ana, Santa Barbara), and Southern (San Diego). You file in the district where you’ve lived for the greater part of the last 180 days.
Filing Fees
The Chapter 7 filing fee is $338 ($245 base, $78 administrative, $15 trustee surcharge). Chapter 13 is $313 ($235 base plus $78 administrative).10United States Courts. Bankruptcy Court Miscellaneous Fee Schedule You can request to pay in installments if you can’t cover the fee at filing. In Chapter 7, the court can waive the fee entirely if your household income is below 150% of the federal poverty guidelines.11United States Bankruptcy Court – Central District of California. Filing Fee, What If I Cannot Afford To File For Bankruptcy Fee waivers are not available in Chapter 13.
Attorneys file electronically through the court’s ECF system. If you file without a lawyer (pro se), you can file in person or by mail at the clerk’s office. Attorney fees for a California Chapter 7 case typically run $800 to $3,000 depending on complexity, and many attorneys offer payment plans.
The Automatic Stay
The moment your petition is filed, an automatic stay takes effect. It’s a court order that immediately halts most collection activity: lawsuits, wage garnishments, collector phone calls, utility shutoffs, and repossessions all have to stop.12Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay For most filers, this is the first tangible relief they feel.
The stay has limits. It won’t stop criminal proceedings, most tax audits, or family law matters like custody hearings and child support orders. If a prior bankruptcy was dismissed within the past year, the stay in a new case lasts only 30 days unless the court extends it. A third filing within a year gets no automatic stay at all unless the court grants one specifically. Creditors can also ask the court to lift the stay on particular property, which is common with car loans when payments are badly behind.
The 341 Meeting and Debtor Education
A few weeks after filing, you’ll attend the meeting of creditors, known as the 341 meeting. Creditors rarely appear. The trustee runs the meeting, not a judge, and it usually takes 10 to 15 minutes. You answer questions under oath about your finances, your petition, and your assets.13United States Department of Justice. Section 341 Meeting of Creditors The trustee is checking that your paperwork matches reality. Answer honestly; surprises at the 341 meeting are what trigger deeper investigations.
After filing but before you receive your discharge, you must complete a second course on personal financial management from an approved provider. It’s separate from the pre-filing credit counseling session. Skip it and you don’t get your discharge, no matter how well everything else went.5United States Department of Justice. Credit Counseling and Debtor Education Information
In a Chapter 7 case, the trustee identifies any nonexempt assets, sells them, and distributes the proceeds according to the priority rules in the Bankruptcy Code.14United States Courts. Chapter 7 – Bankruptcy Basics In a Chapter 13, the trustee collects your monthly plan payments and pays creditors over the plan’s life.
If you want to keep a car or another item securing a loan, you may need to sign a reaffirmation agreement, which is a voluntary agreement to keep paying that specific debt and remove it from your discharge. You keep the collateral, but you stay personally liable for the balance even if the property loses value.15United States Bankruptcy Court – Central District of California. Reaffirmation Agreements Don’t sign one out of reflex; run the numbers first.
Debts That Won’t Be Discharged
A discharge eliminates your personal liability on covered debts and permanently bars creditors from collecting on them.1United States Courts. Discharge in Bankruptcy – Bankruptcy Basics Certain categories survive any bankruptcy:
- Child support and spousal support
- Most recent income taxes, and tax debts where a return was never filed or was filed late
- Student loans, unless you prove “undue hardship” in a separate court proceeding, a notoriously difficult standard
- Debts obtained through fraud or misrepresentation, if the creditor proves it
- Personal injury debts from drunk driving
The full list is longer. A creditor who believes a specific debt is nondischargeable must typically file a complaint within 60 days of the 341 meeting to challenge it.16Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
What Not to Do Before You File
Trustees examine your recent financial history, not just today’s balance sheet. If you transferred property or paid off a favored creditor shortly before filing, the trustee can claw those transactions back. The lookback runs 90 days for payments to ordinary creditors and a full year for payments to “insiders” like family members, business partners, or close associates. Even legitimate repayment of a real debt can be reversed if the timing gave one creditor an unfair edge.
Deliberately hiding assets is far worse. Concealing property from the trustee, destroying financial records, or lying on your petition is a federal felony carrying up to five years in prison and fines up to $250,000.17Office of the Law Revision Counsel. 18 USC 152 – Concealment of Assets Beyond criminal exposure, fraud can result in your entire discharge being denied, leaving you with every debt you filed to escape.
After Discharge: Credit, Work, and Filing Again
A Chapter 7 stays on your credit report for up to 10 years from the filing date. A Chapter 13 may drop off after seven years.18United States Bankruptcy Court. How Many Years Will a Bankruptcy Show on My Credit Report The score drop is severe at first, often 100 points or more, but it fades over time as you rebuild with secured credit cards and on-time payments.
Federal law prohibits government employers at every level from denying you a job, firing you, or demoting you solely because you filed for bankruptcy.19Office of the Law Revision Counsel. 11 USC 525 – Protection Against Discriminatory Treatment Private employers face the same restriction for existing employees; they can’t terminate or punish you for filing. Federal law does not clearly bar private employers from considering a bankruptcy in hiring decisions, and a background check may reveal the filing.
One other tax point matters. Debt canceled through bankruptcy is excluded from your gross income, so you won’t owe tax on discharged credit card balances the way you would on ordinary debt forgiveness.20Internal Revenue Service. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments You report the exclusion on Form 982 with your tax return for the year of discharge.
If you’ve filed before, waiting periods apply before you can receive a discharge in a new case:
- Chapter 7 after Chapter 7: eight years from the prior filing date
- Chapter 13 after Chapter 7: four years from the prior filing date
- Chapter 7 after Chapter 13: six years, unless you repaid at least 70% of unsecured claims in good faith (or 100%)
- Chapter 13 after Chapter 13: two years from the prior filing date
These periods run filing date to filing date, not from discharge date.21United States Bankruptcy Court – Central District of California. Prior Bankruptcy – If I Had a Prior Bankruptcy How Soon Can I Get Another Discharge22Office of the Law Revision Counsel. 11 USC 727 – Discharge File too soon and you go through the entire process with no discharge at the end.