Once you know the facts about filing bankruptcy, you'll be amazed at how beneficial it actually is!

101 TOP BANKRUPTCY FACTS SPECIFIC TO CALIFORNIANS. (Read this and then consult with an attorney in your state regarding your state's laws. )

1. You don't automatically lose your possessions. In fact, most personal possessions such as furniture, electronics, clothes, etc. can be exempted.

2. Given the current economic climate, very few people have any equity in their homes or cars. That means the trustee has no interest in taking these assets from you, as long as you have the means to make the payments.

3. Home owners are allowed between $75,000 and $125,000 in equity before their home's equity becomes an issue.

4. If your home has no equity or you don't own a home, you are entitled to up to $21,875.00 in wildcard assets, meaning whatever assets you have and want to protect.

5. Great news on eliminating traffic ticket debt. If your tickets have gone to collections, you can put that debt into your bankruptcy!

6. Tax debts owed to either the IRS, the state or the Franchise Tax Board can be eliminated for 2006 and before, as long as you have been filing your returns on time.

7. Personal bankruptcy filings in California are up 400% since 2006.

8. Think it will be 8-10 years until you can rebuild your credit? Not anymore!  Between secure credit cards, specialty auto loans and apartment leases, you can get your credit back to fair to good standing within approximately 18-24 months of your bankruptcy's discharge.

9. Lawsuits & Judgments can be eliminated through bankruptcy along with debts that are in collections. Just don't wait too long to get your bankruptcy filed or you might get hit with a garnishments.

10. The majority of garnishments stemming from unsecured debts can be stopped as soon as your bankruptcy is filed.

11. If you are hit with more than one garnishment, it is legal for your employer to fire you!

12. Been sued by a bail bond company for helping an ungrateful friend or relative? Don't worry. The debt can be eliminated in a Chapter 7 BK!

13. Debt Negotiation companies will often tell you that debts discharged in bankruptcy still must be repaid. This is almost virtually never the case in a Chapter 7 filing as long as you don't have assets over the wild card or home equity amounts allowed. It's only in a Chapter 13 Filing that most debtors repay approximately 10-20% of their debts over a 3 to 5 year period.

14. Many people deplete their 401K's in a futile attempt to pay down debts and avoid bankruptcy. They often just end up with serious tax penalties, still have to file and wish they'd consulted with a bankruptcy professional before touching their pensions.

15. Most of those debt negotiation companies you hear on the radio are probably about to disappear. Per the FTC, as of October 27th, 2010, no more upfront fees. As most of these companies require 3 month's payments before they allow your payments to be escrowed, don't expect most of them to keep their doors open.

16. Embarrassment, shame, loss of pride. These are all things that keep people from making the rational move to file bankruptcy. Given the fact that 170,000 Californians will file BK in 2010, just what is it that you're embarrassed about?

17. If you list the credit reporting bureaus, (Equifax, Experian & TransUnion) as creditors, they'll be notified about your bankruptcy & ultimate discharge.

After your discharge, send a copy of the bankruptcy discharge notice to the credit bureaus along with a letter stating, " Here's a list of the unsecured creditors discharged in my case, which you were already notified about. If any of these creditors are continuing to report a balance due, I'm disputing the debt and am requesting that you make an inquiry." If any of your discharged debts reappear, your attorney can then sue the creditor under the Fair Credit Report Act.

18. Do-It-Yourself Bankruptcy can save people the cost of hiring a law firm and ultimately, end up costing them everything. Investing in a quality bankruptcy lawyer could save you thousands, if not hundreds of thousands of dollars by preventing the unnecessary loss of assets.

19. Bankruptcy is written into our Constitution and is one of your fundamental rights.

20. A Bankruptcy means test, taken online, can you give you an inaccurate sense of what Bankruptcy Chapter you qualify for. The means test is best done by an experienced law professional who truly understands the nuances of bankruptcy law.

21. Modern American bankruptcy law started with the Bankruptcy Act of 1898. This law allowed for the voluntary and involuntary filing of bankruptcy, allowed the debtors to claim some exemptions and also removing most barriers for eliminating all debts. Prior to this change, debt was considered a criminal act and debtors could not only lose most of their assets, they could be imprisoned.

22. If you bank where you currently have debts that are in default, your bank may levy your bank account without notice. And, its completely legal!

23. While 1st mortgages rarely trigger lawsuits in an anti-deficiency state such as California, in the case of a foreclosure or default, you may be 1099'd for the forgiven debt. While your accountant can file paperwork to request that the tax be eliminated, you may need to file bankruptcy to show sufficient hardship to qualify.

24. Bankruptcy is not a la carte. You don't get to keep the credit cards you like and eliminate the ones you don't. All cards currently showing a balance must be included in the bankruptcy. Some people attempt to hang onto cards by paying down the balance to zero, prior to filing, but, the creditor may close the account anyway, once the bankruptcy appears on your credit file.

25. Beware attorneys who advertise "Lien Strips" for eliminating second and third mortgages. Yes, this can be done, but, it requires filing a Chapter 13 Bankruptcy. This means paying all your discretionary income to the trustee for 3 to 5 years and, if you're like 70 to 90% of people, potentially having your Chapter 13 Bankruptcy fail, having to pay for a conversion to a Chapter 7 and having the trustee seize & sell off your assets.

26. Don't try to transfer property or assets when you've finally decided to file. Any transfers made within 2 years of filing can be reversed by the trustee. This may make your bankruptcy appear to have been filed in bad faith, and could cause the case to be dismissed, or worse.

27. If you do qualify for Chapter 13, you may be able to reduce the amount you owe on certain secured debts. For example, if you owe $25,000 on a car that's currently worth $15,000, you can request the debt be reduced to $15,000 and then make equal installments over  the life of the Chapter 13 plan. This process, called a "cram down," requires that you have had the asset and respective secured loan for a period of at least 2 1/2 years.

28. Make sure you disclose pending tax refunds to your bankruptcy attorney. The firm can then potentially exempt the refund, under the wildcard rule, and protect it from being seized by the trustee.

29. Don't attempt to hide assets from your bankruptcy attorney. Creditors can do asset searches and if they turn up anything that has not been properly disclosed, can compel the trustee to dismiss your bankruptcy case, or worse.

30. Court imposed fines and restitution cannot be discharged through bankruptcy.

31. Cash advances & balance transfers taken within six months to one year prior to a bankruptcy filing may be challenged by a creditor who is attempting to have the transfers deemed fraudulent. Even if your intentions were completely honorable, your attorney may have to demonstrate a legitimate paper trail  to get you the best possible outcome.

32. Back child support & alimony cannot be discharged through bankruptcy.

33. Federally backed student loans cannot be discharged through bankruptcy, except where an extreme hardship can be demonstrated.  Some private student loans may be dischargeable.

34. When you have secured debts, such as a house or car, Chapter 7 allows you to retain the collateral as long as you are current on payments. In today's more difficult financial environment, some debtors are able to renegotiation terms and have back payments forgiven through loan modifications with lenders, even when filing Chapter 7.

35. Even when creditors get a judgment against you, they cannot seize essential property such as: basic clothing and ordinary household furnishings.

36. Social security, welfare and unemployment cannot be garnished by ordinary creditors.

37. After 4 to 10 years, debts can become legally uncollectible, under state laws known as "Statutes of Limitation." Because many consumers are unaware of these limits, they may be intimidated into making unnecessary payments on old debts, which can then reactivate the debt's viability.

38. The Fair Debt Collection Practices Act makes it illegal for a creditor to continue contacting you after you retained a bankruptcy attorney and have advised them of your attorney's name and phone number.

39. Nowadays, the Credit Counseling requirement for filing Bankruptcy involves two sessions of logging onto a website. You normally pay a modest fee, answer simple questions about your finances through the online interface and then verify your identity with a representative. That's it!

40. When you file bankruptcy, assets like houses and cars will be listed in the bankruptcy, even though you are current on them and intend to keep them. This is because bankruptcy is intended to give the trustee the full snapshot of your financial circumstance, and to make sure that the assets you are keeping are properly designated as debt you will be "reaffirming." Reaffirming the debt means you understand the consequences of defaulting on the debt after your bankruptcy's filing but, have acknowledged that you wish to keep the asset and to continue honoring the debt.

41. Debts owed because of a civil judgment caused by willful or malicious acts or for personal death or injuries caused by drunk driving, cannot be discharged through bankruptcy.

42. Filing Chapter 13 allows a co-debtor to avoid also filing. Filing Chapter 7 means the co-debtor is liable unless they also file.

43. Bankruptcy does not prevent your employer from withholding pension/retirement loan repayments.

44. If your secured debts exceed $1,010,650.00 and your unsecured debts exceed $336,900,00, you cannot file Chapter 13. Only Chapter 7 or Chapter 11.

45. You must submit tax returns to the trustee for the previous two years at least two weeks prior to your hearing  date in a Chapter 7. For Chapter 13 bankruptcies, you must submit tax returns for the previous four years.

46. The bankruptcy hearing or "341a meeting," is technically speaking, "The meeting of creditors."  Creditors must file a "proof of claim" in order to challenge your ability to discharge a debt and must attend this hearing to show cause.

47. Retirement accounts and 401K plans cannot be seized or liquidated to offset debt, when filing bankruptcy. So yes, you get to keep your pension!

48. The "Means Test" is based on your previous 6 months income. Not the previous year's income, as many debtors often assume.

49. Business debtors are allowed to skip the means test. That is, because, if over 50% of your debt is due to business related debts, (And, the business is NOT incorporated.) you may choose whether to file a Chapter 7 or Chapter 13 Bankruptcy.

50. If you are married, but, living apart from your spouse, your spouse's income does not have to be factored into the bankruptcy.

51. Utilities such as cable and internet are normally allowable expenses in bankruptcy, though you may have to opt for a basic plan and eliminate any services deemed upgrades by the trustee.

52. Your monthly food costs may be able to exceed the amount allowed for your area, if, for example, a family member requires a special, medically required diet.

53. Clothing expenditures are allowed to reflect the market-based cost of apparel necessary for your profession. You are not required to resort to wearing second hand clothing, but, you are also seriously discouraged from making extravagant or frequent & unnecessary clothing purchases.

54. Reasonable dry cleaning and laundry expenses  are allowed.

55. Medical insurance is considered a necessary expense by the courts. You may elect to pay or discharge past medical debts at the time of filing.

56. The court will allow you to expense reasonable amounts spent on running and maintaining your vehicles to get to and from work and to provide needed transportation for children.

57. Some monthly expense for recreation is usually considered acceptable by the courts. Your attorney will advise you on the distinction between acceptable & excessive recreational outlays.

58. You may expense up to 15% of your income to charitable contributions, during the period when they are being made and they meet or exceed this threshold.

59. Disability and/or life insurance is an allowable expense.

60. Alimony, child support and support paid to others are also allowable expenses.

61. You are permitted to claim expenses for children no longer living at home, for things such as child care, clothes, books, etc.

62. Your children's education is an allowable expense. While the courts are not fond of allowing private school tuition for grade & high school students, you may be able to make the argument that the schools in your area are simply too dangerous, or that your child is in religious school or has special educational needs. Expenses for children of college age should also reflect a thrifty disposition, i.e., they should be attending a state college as opposed to an expensive private university.

63. You and/or your spouse's educational expenses may also be allowable. However, the court may reject a percentage of these fees if you or your spouse could be readily working and increasing the family's income.

64. When filing a Corporate Chapter 7 bankruptcy, there are no exemptions of any kind.

65. Most people filing corporate Chapter 7 bankruptcies are best served by also filing a personal bankruptcy, concurrently. This is because most banks do not allow credit lines to be extended to privately held corporations without a personal guarantee. In these instances, if you file a corporate bankruptcy without filing a personal bankruptcy, you might still be sued by a corporate creditor.

66. Do not attempt to pay off relatives to whom you owe money while shirking repayment to other creditors. The trustee may enforce something called a "claw back." This means he may demand that your relatives return the monies, and then will distribute those monies to the creditors you have included for discharge, in your bankruptcy.

67. If you are attempting to pay down a credit card to zero so that you won't have to include it in the bankruptcy, you may not make payments exceeding $600.00 during the 3 months prior to filing your bankruptcy.

68. Most bankruptcy attorneys filing a Chapter 7 on your behalf will require full payment, given that any outstanding fees still owed them will be automatically discharged in the bankruptcy. In a Chapter 13, it is common practice to make payment arrangements to the attorney as part of the Chapter 13 repayment plan.

69. You cannot chose which bankruptcy court to file in. You must file with the bankruptcy court that is within the jurisdiction of the county you live in.

70. You must live in a state for at least six months before you can file bankruptcy in that state.

71. The court filing costs for a Chapter 7 in the state of California is $299.00. The fee is $274.00 to file a Chapter 13.

72. It's important to be honest to a fault when declaring bankruptcy. Approximately 1 in 250 bankruptcy cases is audited by a private firm. You don't want to risk perjury charges, should it become evident that you deliberately lied about your circumstances.

73. If you are gay and were married during the brief period when gay marriage was legal in California, you cannot file bankruptcy as a married couple. Bankruptcy law is federally based, and, unfortunately, gay marriage is not yet legal at the federal level.

74. When filing Chapter 7, it is a common mistake for married couples to assume that if all the debt acquired after marriage is in one spouse's name only, that only the "named," spouse need file bankruptcy. The bottom line is that community debt law allows creditors to sue the "other spouse," secure a judgment and then garnish the spouse whose name is on the debts. So, most married couples in this situation are best served by filing jointly. The unnamed spouse can, however, be spared when filing a Chapter 13.

75. You will be asked to show your actual license and social security card during your bankruptcy hearing. If you fail to show these documents to the trustee, your case will most likely be dismissed.

76. In California, you actually get two chances to appear for your bankruptcy hearing. Most bankruptcy attorneys would encourage you not to miss the first scheduled hearing, unless you have a serious emergency.

77. You must appear at your bankruptcy hearing in person.

78. There is an 8 year window requirement between Chapter 7 bankruptcy filings.

79. There is a 2-4 year window between Chapter 13 bankruptcy filings.

80. You can only file Chapter 7 three times during your lifetime.

81. You can file Chapter 13 as many times as the court will allow.

82. Deposits accepted by a business for future engagements may be allowed as dischargeable debt, if, the debtor's intentions were to honor the transaction at the time the deposit was accepted.

83. Virtually all leases can be eliminated by filing bankruptcy.

84. Timeshares that have no remaining debt owed, are rarely seized by the trustee as they are virtually impossible to sell, in the current economic climate.

85. Past due HOA fees can be eliminated in bankruptcy, even if your intention is to retain the property.

86. Your bankruptcy is typically the first official notification your creditors receive regarding your intention to discharge debts owed. Consumers often assume that a pre-filing notice is sent to creditors.

87. This is not to be confused with the fact that most bankruptcy firms will confirm retention for the purpose of filing bankruptcy on a client's behalf, when contacted by phone by a creditor.

88. Consumers should always check with the California State Bar when checking an attorney's background and look for any record of past disciplinary actions.

89. Your 1st Credit Counseling certificate cannot be over 6 months old at the time your bankruptcy is filed. Your 2nd Credit Counseling certificate must be filed with the court within 15 days after your bankruptcy hearing.

90. If you suddenly discover new unsecured debts that will qualify for discharge AFTER your bankruptcy has been filed, you can request an amendment to your bankruptcy case, as long as it has not yet been discharged.

91.  A 707(b) action is an action taken by the U.S. Trustee, the regular trustee, or any of your creditors requesting that your Chapter 7 bankruptcy be dismissed on the grounds of intentional abuse.

92.  Adversarial actions are lawsuits instigated to challenge a debt's status as dischargeable through bankruptcy or to recover any property transferred by the debtor prior to filing bankruptcy.

93. The automatic stay prevents any creditor actions for a period of at least 25 days immediately after a bankruptcy is filed. While this is often used to prevent a home's sale at auction, the lender can file a motion to, "lift the automatic stay," which is usually granted in a Chapter 7.

94. Chapter 12 is the designation assigned to the type of bankruptcy used by small farmers wishing to reorganize their debts.

95. Chapter 9 is restricted to governmental entities and municipalities.

96. A "conversion" is where a debtor switches from one Chapter of bankruptcy to another, i.e., such as when a Chapter 13 bankruptcy is re-designated as a Chapter 7 or vice-versa.

97.  Fraudulent transfers involve the transfer or sale of property to a second party for less than its market value, in order to hide it from the bankruptcy trustee. Fraudulently transferred property can be recovered by the trustee and sold with the intent of distributing proceeds to creditors.

98. Monies received from personal injury judgments do not have any special exemption status in bankruptcy. Award amounts exceeding $21,875.00, where the person filing has no other assets to protect, may be seized by the trustee for distribution to creditors.

99. Bankruptcy cases that have been discharged, may be reopened. This is usually done for the purpose of adding an overlooked creditor or filing a motion to avoid an overlooked lien. Attorneys generally charge additionally for this process.

100. Only an attorney can represent you in bankruptcy court hearing. You may not be represented by a paralegal, but you may represent yourself, which is called: filing "Pro Per."

101.  The more assets you have to lose in a botched bankruptcy, the more it may be worth your while to pay a lawyer to protect them in a bankruptcy proceeding.