Filing for bankruptcy in California follows federal Chapters 7, 11 and 13 as well as California bankruptcy law. These laws apply to individual and corporate bankruptcy proceedings, including liquidation, insolvency, reorganizations, and debt consolidation. Federal law dictates that in bankruptcy proceedings, the debtor's assets are liquidated or reorganized under court supervision, which benefits creditors. The debtor's eligible property becomes part of the bankruptcy estate and is subject to bankruptcy proceedings. While federal law covers most aspects of bankruptcy, state laws can differ on exempted assets and property rights, so consulting a local attorney is advised.

1. Bankruptcy in California
Filing for bankruptcy in California follows Chapters 7, 11 and 13 of the California bankruptcy
law. These legal provisions apply to individual and corporate bankruptcy, liquidation,
insolvency, reorganizations, and debt consolidation, among others. Aside from these specific
items, California bankruptcy law are also applicable to credit after bankruptcy, re-establishing
credit, credit card debt, foreclosures, repossessions, and garnishments, taxes and bankruptcy.
You will also find specific rules on discharge of personal debts as well as corporate asset
liquidation and reorganization.
In every bankruptcy proceeding as dictated by federal law, the debtor goes through a liquidation
of assets or reorganization under the supervision of the court. This will tend to be beneficial for
the creditors or those whom the debtor owes money from. The debtor is then stripped of his debt
by virtue of a "discharge". This means that the debtor's property that will be known as "the
bankruptcy estate" will then fall under bankruptcy proceedings.
The law that covers most of the bankruptcy process is known as "the Bankruptcy Code". The
cases are filed with the federal court in all states to ensure uniformity of actions. There may be
some distinctions in each state especially to those referring to exempted assets as well as to the
nature and extent of a interest and other matters relating to the debtor's property. It is thus best to
consult with a local bankruptcy attorney to explain the applicable laws to your particular
situation.
Chapter 7 bankruptcy in California requires that the debtor voluntarily file the case. But there
may be instances where creditors are allowed to resort to involuntary bankruptcy cases against
their debtors. This is especially true for debtors who fail to pay debts on time. But involuntary
bankruptcy cases do not occur often, as these are only available when there are 3 or more
creditors with at least $10,000.00 total amount of debts. These can also be filed in cases where
there are about 12 total numbers of creditors, which enables one creditor who is collecting about
$10,000.00 to file the involuntary bankruptcy case.