Chapter 7 Bankruptcy California: 3 Things You Need to Know

If you are dealing with debt, understanding your options is the first step towards getting back on track. Therefore, we've written this article to help you understand Chapter 7 bankruptcy in California and other possible alternatives. With that being said, if you are considering bankruptcy, here are some things to ask yourself:
Information in this article does not constitute legal advice, it is for informational purposes only, and may not constitute the most up-to-date information. Readers should contact their attorney for advice on any particular legal matter.
  1. Do I qualify for Chapter 7 bankruptcy, and if so, how much does it cost to go through that process?
  2. Are there any other alternatives that may better suit my situation?
  3. What are the specifics about Chapter 7 bankruptcy in California that may not apply to other states?

Throughout the rest of this article, we'll give you a well-rounded understanding of what you're getting yourself into. However, use our California Chapter 7 Calculator below to get straight to the point. That will help you estimate your bankruptcy qualifications and cost.

Table of Content

1) How Chapter 7 Bankruptcy Works in California

How Fast Do You Get Relief in A Chapter 7 Bankruptcy in California

It usually takes around 120 days to wrap up a no-asset Chapter 7 case in the state from start to finish. A "no-asset" bankruptcy means that you don't own any high-value houses or other valuable assets that might exceed the California bankruptcy exemptions. Therefore, if you're in a situation where you don't have an excess of assets, you could be looking at a relatively speedy resolution to your bankruptcy case.

How Much Does It Cost To File Chapter 7 Bankruptcy in California

Nationally, the cost of Chapter 7 bankruptcy does vary quite a bit. Most cases fall between $500 and $3000. The most significant factors when determining cost are location, attorney experience, and difficulty of your specific case.

Therefore, when filing in California, prices vary widely, even from one city to another. For example, in a city like Chula Vista, you could pay around $862, whereas in Bakersfield, you could be looking at up to $2,162.

With that being said, there are also situations where you may be able to reduce this fee by using a filing fee waiver. For further details, check out the California filing fee waiver.

How Do I Qualify For Chapter 7 Bankruptcy in California?

When reviewing whether you qualify for Chapter 7, you may want to check the Chapter 7 Bankruptcy California Income Limits. This test determines if you're eligible for a bankruptcy discharge (another way of saying your debts will be forgiven). If you pass the means test (you can estimate it below), Chapter 7 will cover most of your unsecured debts. Unsecured debts don't have any collateral, such as medical bills, personal loans, certain old income tax debts, old utility bills, credit card debts, and most personal judgments.

What about secured debts in Chapter 7?

If you want to wipe out secured debts such as car loans and mortgages, Chapter 7 bankruptcy might still be the answer. But the catch is that you'll have to give up the asset to the creditor, and the creditor will consider it as full payment for what you owe.

IMPORTANT: Chapter 7 Qualification via California Means Test

A tool to help you determine your eligibility for Chapter 7 bankruptcy in California is the Bankruptcy Means Test. This form will help calculate your average annual income based on your last six months of gross income. It will then compare that number to the median income of other households in California. If your median income turns out to be below the California median income, you might qualify for a Chapter 7 bankruptcy discharge.

Feel free to use the calculator below:

My Income Exceeded The Chapter 7 Means Test Allowable in California

If your income is higher than the median income in your state, you might need to dive into part 2 of the means test or explore an alternative option. We encourage you to check out this helpful resource: passing the Chapter 7 means test when income exceeds the median.

Chapter 7 Bankruptcy California Income Limits

If you're filing for bankruptcy in California on or after November 1, 2023, here are the limitations for income based on household size:

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Will I lose my belongings if I file Chapter 7 bankruptcy? Understand California bankruptcy exemptions.

Understanding Chapter 7 bankruptcy exemptions is crucial since it helps stop your essential assets from being possessed by creditors. Although there are federal bankruptcy exemptions, California only allows in-state exemptions. To make things easier, we've listed some relevant exemptions below.

First, and often most importantly, is the home equity exemption. This applies to any actual or personal property such as a house, condominium, mobile home, etc. The limit for this exemption is up to $600,000, regardless of age or marital status.

The second exemption is for motor vehicles such as cars, trucks, and motorcycles. This exemption covers up to $3,625.

Lastly, most tax-exempt pensions (public retirement benefits) and retirement accounts (private retirement plans) are also eligible for bankruptcy exemptions. In California, each individual can protect up to $1,512,350.

Chapter 7 Bankruptcy California Pros and Cons


  • The speed at which you can receive a discharge: In just about 120 days, you could be debt-free and on your way to building a fresh start.
  • Property exemptions: If you meet the threshold for exemptions, filing for Chapter 7 bankruptcy may allow you to keep a good percentage of your personal property.
  • Stopping debt collection lawsuits: Once you file, the court will issue an automatic stay, preventing legal action against you, including calls and letters from collectors.
  • Loan deficiency: When you owe more on a loan than the collateral is worth, you may be stuck with a deficiency. But with bankruptcy, that burden could be lifted.


  • Income requirements for qualification: To be eligible for Chapter 7 bankruptcy, you must meet specific income requirements.
  • Potential loss of home and belongings: If your assets exceed the exemption limit, there is a chance that you may have to part ways with some of your property.
  • Negative impact on credit report: Filing for Chapter 7 bankruptcy can have a lasting effect on your credit report. It stays on record for a decade, making securing future loans or favorable interest rates challenging.
  • Non-dischargeable debt: It's important to note that not all debts may be discharged through Chapter 7 bankruptcy. Specific obligations, such as student loans and child support payments, are typically not eligible for discharge.

2) Alternatives to Chapter 7 Bankruptcy in California

Chapter 13 Bankruptcy in California

If you earn more than the income limit for Chapter 7 bankruptcy, there's still a way to get some debt relief through Chapter 13 bankruptcy. A Chapter 13 Bankruptcy in California allows you to restructure your debts into a more manageable monthly plan. This restructuring can help you keep your home and vehicles, help stop foreclosure, and prevent repossession of your belongings. Furthermore, you might be able to reduce any unpaid child support, alimony, and car loan payments.

Can you afford Chapter 13 bankruptcy?

If you are considering a Chapter 13 bankruptcy, you can use this calculator to help estimate whether you can manage the monthly payment.

Debt Settlement/Relief

Debt settlement may also be another option aside from Chapter 7 and Chapter 13 bankruptcy. Once you pursue this option, the debt settlement company negotiates a lower amount on your total debt, saving you money in the long run. However, consider its impact on your credit score and research correctly to choose a well-reputable and transparent debt settlement company.

Debt Management

Another option is debt management. Whereas debt settlement companies work to lower the total amount of debt you owe, debt management companies work to lower your interest rates. These programs usually last 3 to 5 years and are pricier than debt settlement. Not all creditors may be willing to work with a debt management company.

However, if you're dealing with a bunch of high-interest credit card debt, this option may reduce that interest by around 10-20%. This could translate to an eventual 30-50% savings on the debt you currently owe and allow you to pay off these debts more efficiently. Considering your situation and determining which option makes the most sense financially is essential.

Debt Payoff Planning

The last alternative we'll mention is debt payoff planning. This strategy does take some effort and will require you to cut your expenses and save excess income to pay down as much debt as possible. However, you can make tangible progress every month by choosing the appropriate debt payoff plan. Another thing to remember is that as you begin to pay off your debts, you will be able to compound those payments towards the remaining debts, allowing you to pay things off faster and faster.


After reading this article, we hope you are not feeling more confident and informed about Chapter 7 bankruptcy, as well as other options you have at your disposal. Once again, if you would like a quick and easy way to check your eligibility and possible costs, please use our calculator below.

Lastly, although most individuals go through Chapter 7 bankruptcy with an attorney, we understand that some may want to save on the filing fees by doing it independently. If this seems like something you might be interested in, this article may shed more light on that process: filing bankruptcy without an attorney.

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