Los Angeles Bankruptcy FAQ

Get answers to the most common questions about bankruptcy in Los Angeles. Our experienced attorneys have helped thousands of LA residents understand their options and navigate the bankruptcy process.

Expert answers • Local knowledge • Free consultation

Ask Your Question

Get personalized answers from our attorneys

This will open your email client to send the message to our attorneys.

General Bankruptcy Questions

Will I lose my house if I file bankruptcy in Los Angeles?

Not necessarily. In Chapter 7, you can keep your home if you're current on payments and the equity is within California's homestead exemption ($75,000-$175,000 depending on circumstances). In Chapter 13, you can keep your home and catch up on missed payments through your repayment plan. Many of our Los Angeles clients keep their homes through bankruptcy.

How long does bankruptcy stay on my credit report?

Chapter 7 bankruptcy stays on your credit report for 10 years, while Chapter 13 stays for 7 years. However, the impact on your credit score decreases over time, and many clients see significant improvement within 2-3 years. You can often qualify for new credit, including mortgages, within 2-4 years after bankruptcy.

Can I file bankruptcy if I have a job in Los Angeles?

Yes, having a job doesn't disqualify you from bankruptcy. For Chapter 7, your income must pass the means test (below median income for your household size in LA County). For Chapter 13, having regular income is actually required to fund your repayment plan. Many working people file bankruptcy due to medical bills, job loss, or other circumstances.

How long does the bankruptcy process take in Los Angeles?

Chapter 7 typically takes 3-4 months from filing to discharge. Chapter 13 takes 3-5 years to complete the repayment plan. The initial filing provides immediate protection through the automatic stay. Most clients feel relief within days of filing as creditor harassment stops immediately.

Los Angeles Specific Questions

What are the asset exemptions for Los Angeles residents?

California offers two exemption systems: System 1 (CCP 704) and System 2 (CCP 703). Most LA residents benefit from System 1, which includes: homestead exemption up to $600,000+ for primary residence, $8,000 for vehicles, $8,000 for household goods, and $8,000 for tools of trade. System 2 offers a $31,950 wildcard exemption. We'll analyze which system protects your assets best.

How does the LA County median income affect my bankruptcy case?

LA County median income determines Chapter 7 eligibility through the means test. For 2024: 1 person - $70,450, 2 people - $87,850, 3 people - $110,300, 4 people - $133,400. If your income is below these amounts, you automatically qualify for Chapter 7. Above these amounts requires additional calculations to determine eligibility.

Can I discharge my California state tax debt in bankruptcy?

Some California state taxes can be discharged in bankruptcy if they meet specific criteria: the tax return was due more than 3 years ago, the return was filed more than 2 years ago, and the tax was assessed more than 240 days ago. Recent taxes, payroll taxes, and fraud penalties typically cannot be discharged. We'll review your specific tax situation.

What happens to my car in Los Angeles bankruptcy?

In Chapter 7, you can keep your car if it's worth less than $5,850 (or $8,000 under System 1 exemptions) or if you're current on payments and the equity is protected. In Chapter 13, you can keep your car and catch up on missed payments. Many LA clients keep their vehicles, which is essential for work and daily life in Los Angeles.

Process & Legal Questions

Do I have to go to court for bankruptcy in Los Angeles?

You'll attend one meeting called the '341 Meeting of Creditors' about 30 days after filing. This isn't in a courtroom - it's an informal meeting with the bankruptcy trustee at the federal building downtown. Most meetings last 5-10 minutes with routine questions. Your attorney will prepare you and attend with you. Court appearances are rare unless complications arise.

Can I keep my retirement accounts (401k, IRA) in bankruptcy?

Yes, retirement accounts are generally fully protected in bankruptcy under federal law. This includes 401(k), 403(b), IRA, Roth IRA, and pension plans. These accounts are exempt regardless of value. However, recent contributions or withdrawals may be scrutinized. Don't cash out retirement accounts to pay debts before consulting with us.

What debts cannot be discharged in Los Angeles bankruptcy?

Non-dischargeable debts include: recent student loans, recent taxes, child support, alimony, criminal fines, debts from fraud or willful injury, and recent luxury purchases over $800. Most credit cards, medical bills, personal loans, and older taxes can be discharged. We'll review your specific debts to determine what can be eliminated.

How much does bankruptcy cost in Los Angeles?

Court filing fees are $338 for Chapter 7 and $313 for Chapter 13 (may be waived for low-income filers). Attorney fees vary based on case complexity. We offer affordable payment plans and free consultations. The cost is typically much less than continuing to struggle with debt payments. We'll provide transparent pricing during your consultation.

Still Have Questions?

Get Personalized Answers

Every bankruptcy case is unique. Our experienced Los Angeles bankruptcy attorneys will answer your specific questions and explain how bankruptcy law applies to your situation during a free, confidential consultation.

Quick Response

We respond to all inquiries within 24 hours

Confidential & Free

All consultations are protected by attorney-client privilege and completely free

Ready to Get Your Fresh Start?

Don't let debt control your life. Our experienced Los Angeles bankruptcy attorneys are here to help you explore your options and find the best path forward.