Chapter 7 Bankruptcy in California

A Fresh Start for Californians Seeking Financial Freedom

If overwhelming debt has become a daily struggle, Chapter 7 bankruptcy could give you the fresh start you deserve. It’s a powerful legal tool that eliminates most unsecured debt while protecting your home, car, and essential assets.

At Bankruptcy Near Me, we proudly serve clients across Southern California — including Los Angeles, Orange County, and the Inland Empire — through our Santa Ana office. We also provide low-bono (reduced-fee) legal assistance for individuals who need quality representation but can’t afford traditional private attorney rates.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy (often called “liquidation bankruptcy” or “straight bankruptcy”) allows qualified individuals to eliminate unsecured debts like:

  • Credit cards and medical bills

  • Personal loans and payday advances

  • Utility bills

  • Most collection accounts

  • Older repossessions or judgments

  • Pay Later Installment Plans (Affirm, Klarna, AfterPay, Sezzle, etc.)

  • Apartment eviction or surrender balances

  • SBA Loans (with heightened review and scrutiny from the US Trustee and Chapter Trustee)

A bankruptcy trustee reviews your case to see if you have any non-exempt property that can be sold to repay creditors. In most California cases, clients keep everything they own because their assets are protected by California’s generous exemption laws.

Most cases are completed within 3 to 4 months, ending with a discharge that erases eligible debts and gives you a clean slate.

Who Qualifies for Chapter 7 in California?

Eligibility depends primarily on the means test, which compares your average income from the last six months to California’s median income for a household your size.

Household Size Median Income Threshold for 2025

*1 person~$75,235

2 persons~$98,857

3 persons~$111,799

4 persons~$133,558

5 persons~$143,458

6 persons~$153,358

Add $9,900 for each additional person—

*Updated periodically by the U.S. Trustee Program.

If your income is below the median, you qualify automatically. If it’s higher, a second calculation examines your allowable living expenses to see if you have any disposable income left. Many Californians with moderate incomes still pass this step.

The Chapter 7 Process in California — Step by Step

  1. Credit Counseling (Pre-Filing Requirement)
    Before filing, you must complete a short credit counseling course from an approved provider. We’ll direct you to affordable options (most cost less than $30).

  2. Prepare Your Case
    We gather pay stubs, tax returns, bank statements, and a list of your debts and property. Our office handles all court paperwork to ensure accuracy and compliance.

  3. File With the Bankruptcy Court
    Once filed, the Automatic Stay goes into effect, immediately stopping creditor lawsuits, wage garnishments, and harassing phone calls. Your ability to rebuild your credit starts here.

  4. Meeting of Creditors (341 Meeting)
    About 4–6 weeks later, you attend a brief meeting with the trustee (usually via Zoom). Creditors rarely appear. We attend with you and handle all trustee questions.

  5. Debtor Education Course
    After filing, you complete a financial management course before receiving your discharge.

  6. Discharge & Fresh Start
    About 60 days after your 341 meeting, your eligible debts are officially wiped out - you get your fresh start!

What Debts Are Discharged?

Dischargeable Debts:

  • Credit cards and medical bills

  • Personal loans and payday advances

  • Utility bills

  • Most collection accounts

  • Older repossessions or judgments

  • Pay Later Installment Plans (Affirm, Klarna, AfterPay, Sezzle, etc.)

  • Apartment eviction or surrender balances

  • SBA Loans (with heightened review and scrutiny from the US Trustee and Chapter Trustee)

Non-Dischargeable Debts:

  • Child support and alimony

  • Most student loans unless you retain our firm to provide various strategies in having them reduced or eliminated

  • Certain taxes and government fines

  • Fraud-related debts or recent luxury purchases

  • Borrowing against your 401k

  • Claims arising out of injuring someone while intoxicated

  • Certain income taxes

  • Fines and penalties

  • Debts incurred through fraud or intentional misconduct

    California Bankruptcy Exemptions — Protecting What You Own

    California offers two sets of exemption laws, and debtors must choose one:

    System 1 (C.C.P. §704)

    • Current Home equity protection up to $499,741–$722,507 (depending on your county’s median home price)

    • Vehicle equity up to $8,625.00

    • Personal property (furniture, clothing, appliances)

    • Retirement accounts and pensions

    • Tools of trade

    • Benefits for reasonably necessary support and separate maintenance

    • Money in deposit account up to minimum basic standard of adequate care for a family of four

    • Financial Aid by a charitable organization or fraternal benefit society

    • Family Cemetery Plot

    • Life Insurance Policies

    • Incarcerated Inmate Deposits held by a Public Agency

    • Health Aides

    System 2 (C.C.P. §703.140)

    • Homestead exemption: up to $36,750.00

    • Wildcard exemption: up to $1,950 + any unused portion of homestead (totaling to $38,700)

    • Vehicle exemption up to $8,625

    • Household goods and jewelry exemptions

    • Health Aids

    • Benefits

    • Paid Time Off up to $8,625.00

    • Settlements from Debtor’s Employer

    • Personal Injury Compensation ranging from $31,750.00 to unlimited

    At Bankruptcy Near Me, we’ll determine which system provides the best protection for your property.

    California Bankruptcy Judges

    The U.S. Bankruptcy Court for the Central District of California — the largest bankruptcy district in the nation — covers Los Angeles, Orange, Riverside, San Bernardino, Ventura, Santa Barbara, and San Luis Obispo Counties.

    Judges serving within the Central District include:

    • Albert, T. (Santa Ana)

      Barash, M. (San Fernando Valley, Northern)

      Bason, N. (Los Angeles)

      Bluebond, S. (Los Angeles)

      Brand, J. (Chief Judge) (Los Angeles)

      Clarkson, S. (Riverside, Santa Ana)

      Clifford III, R. (Northern)

      Houle, M. (Santa Ana)

      Kaufman, V. (San Fernando Valley)

      Klein, S. (Los Angeles)

      Kwan, R. (Los Angeles)

      Mund, G. (San Fernando Valley)

      Reyes Bordeaux, M. (Riverside)

      Russell, B. (Los Angeles)

      Saltzman, D. (Los Angeles, Northern)

      Smith, E. (Santa Ana)

      Tighe, M. (San Fernando Valley)

      Yun, S. (Riverside)

      Zive, G. (Los Angeles)

      Zurzolo, V. (Los Angeles)

    California Chapter 7 Trustees

    Each case is randomly assigned to a Chapter 7 panel trustee, who oversees your meeting of creditors and reviews your paperwork. The Central District maintains a roster of professional trustees such as:

    • Wesley H. Avery (Pasadena)

      Lynda T. Bui (Riverside)

      Thomas H. Casey (Rancho Santa Margarita)

      Arturo M. Cisneros (Riverside)

      Charles W. Daff (Irvine)

      Carolyn Anne Dye (Sherman Oaks)

      Howard Marc Ehrenberg (Los Angeles)

      Jeremy W. Faith (Encino)

      Todd A. Frealy (Riverside)

      Jeffrey I. Golden (Costa Mesa)

      Amy L. Goldman (Los Angeles)

      Rosendo Gonzalez (Los Angeles)

      David M. Goodrich (Costa Mesa)

      David Keith Gottlieb (Woodland Hills)

      Weneta M. A. Kosmala (Newport Beach)

      Brad D. Krasnoff (Los Angeles)

      Sam S. Leslie (Los Angeles)

      Richard A. Marshack (Irvine)

      Peter J. Mastan (Los Angeles)

      Sandra K. McBeth (Atascadero)

      John J. Menchaca (Los Angeles)

      Elissa D. Miller (Los Angeles)

      Karen S. Naylor (Lake Forest)

      John P. Pringle (City of Industry)

      Jason M. Rund (El Segundo)

      Larry D. Simons (Riverside)

      Robert S. Whitmore (Riverside)

      Timothy J. Yoo (Los Angeles)

      Nancy J. Zamora (Los Angeles)

    California Bankruptcy Courthouse Locations

    Central District of California – Divisions:

    • Los Angeles Division: 255 E. Temple St., Los Angeles, CA 90012

    • Santa Ana Division: 411 W. Fourth St., Suite 2030, Santa Ana, CA 92701

    • Riverside Division: 3420 Twelfth St., Riverside, CA 92501

    • Northern Division: 1415 State St., Santa Barbara, CA 93101

    • San Fernando Valley Division: 21041 Burbank Blvd., Woodland Hills, CA 91367

    Your case will be filed in the division where you live. Our office handles filings throughout Southern California, with primary service in the Santa Ana Division.

  • Filing Fees and Costs

    • Chapter 7 filing fee: $338

    • Credit counseling & debtor education: typically $30–$60 combined

    • Attorney flat fees: depend on complexity

    We offer low-bono representation — reduced-fee services for clients who qualify based on income and financial hardship.

    Low-Bono Program at Bankruptcy Near Me

    Our California office provides affordable Chapter 7 assistance for individuals and families who earn too much for legal aid but cannot afford full private rates.
    Low-bono services include:

    • Discounted flat fees

    • Payment plans before and after filing

    • Complete case management from filing through discharge

    • Direct representation at your 341 meeting

    📞 Call our California office: 714-798-2544
    📧 Email: info@bankruptcynearme.org

    Why Work With Bankruptcy Near Me?

    • Local Experience: We know California’s trustees, judges, and exemption systems.

    • Focused Practice: We handle low-income, no-asset Chapter 7 cases every day.

    • Personalized Support: Direct attorney access — no call centers or paralegals handling your case alone.

    • Affordable Options: Sliding scale and low-bono representation available.

    Led by Attorney Iris Kwon, our Santa Ana, California office has helped hundreds of individuals eliminate debt, stop collections, and regain peace of mind.

    Frequently Asked Questions

    How long does Chapter 7 take in California?
    Typically 3–4 months from filing to discharge.

    Will I lose my house or car?
    In most cases, no. California’s strong exemptions protect equity in homes, vehicles, and retirement accounts.

    Will bankruptcy ruin my credit?
    It stays on your report for 10 years, but many clients start rebuilding their credit within months.

    Can I file jointly with my spouse?
    Yes — joint filings are common for married couples.

    Can I file again if I’ve filed before?
    Yes, but there are waiting periods (usually 8 years after a prior Chapter 7 discharge).

    Take the First Step Toward Financial Freedom

    If you’re ready to stop creditor calls, wipe out debt, and start fresh, we can help.
    At Bankruptcy Near Me, you’ll get experienced, affordable, and compassionate legal support from start to finish.

    📍 California Office (Santa Ana):
    901 W Civic Center Drive, Suite 200
    Santa Ana, CA 92701
    📞 714-798-2544
    🌐 www.bankruptcynearme.org/contact

    Let’s build your path to peace, financial freedom, and a truly fresh start.