How to File Bankruptcy
Filing bankruptcy on your own will require you to complete a credit counseling course, submit the bankruptcy petition (Form B1) to the appropriate bankruptcy court, pay the filing fees and submit a series of bankruptcy schedules. The schedules will outline all of your assets and debts (secured and unsecured), your exemptions, contracts, unexpired leases, income, current expenses, and your statement of financial affairs.
You will be required to attend a creditor meeting and complete a financial management course prior to your bankruptcy completion. Reasons you should file and should not file should be discussed with a bankruptcy lawyer. Filing bankruptcy is an important financial decision. Get the answers you need before filing bankruptcy.
5 Steps BEFORE filing bankruptcy
Debtors have a lot of questions about whether or not bankruptcy is the right decision for them, whether it will help them with their debts and what they need to do to get started. Bankruptcy is not the right answer for everyone, and many types of unsecured debts such as child and spousal support, educational loans and taxes may not be discharged through bankruptcy. How do you start the bankruptcy process? The steps are below.
Step 1 — Educate Yourself about Bankruptcy
Not everyone should file bankruptcy to eliminate their debts. Bankruptcy is a serious financial decision and should only be done after you complete research to determine if it is the best choice for you. Laws passed in 2005 now make it harder for many debtors to discharge debts with Chapter 7 bankruptcy. If you are not able to file Chapter 7 bankruptcy, find out if Chapter 13 bankruptcy is right for you.
Step 2- Hire a bankruptcy lawyer
Although some filers may be able to file a simple Chapter 7 bankruptcy without a lawyer, especially if they have no assets, most Chapter 13 filers will need a lawyer to help complete the bankruptcy forms and develop the Chapter 13 bankruptcy repayment plan. Lawyers will require payment before filing the bankruptcy petition for Chapter 7 bankruptcy cases. Payment for Chapter 13 bankruptcy, however, may be included in the bankruptcy repayment plan.
Step 3- Take your Credit Counseling Course from an approved counseling agency
After 2005, all filers were required to take a credit counseling course prior to filing their bankruptcy petition. Counseling will include a short session with a financial counselor, an evaluation of your financial situation and a review of bankruptcy and whether it is right for you. Credit counseling must be completed 180 days prior to the bankruptcy filing. Check out credit counseling information online at “DECAF Credit Counseling Agency”.
Step 4 – Review and File your bankruptcy Petition
If you hire a bankruptcy lawyer they will complete your bankruptcy petition. You will have to gather the appropriate documents including tax returns, credit report (sometimes a lawyer will request this on their own), home appraisal, list of debts and assets, pay stubs, etc. Next you need to ensure that all information is accurate, especially information about your debts, Social Security Number, name and address.
Step 5- Complete the Debtor Education and Financial Management Course
Prior to the completion of your Chapter 7 or Chapter 13 bankruptcy you will need to complete the Debtor Education or Financial Management Briefing. For Chapter 7 bankruptcy this course is completed within 60 days from the date of the 341 Creditor Meeting. Chapter 13 bankruptcy filers must complete the course prior to completing their Chapter 13 debt repayment plan.
The aim of the financial management course is to help you learn to manage your personal finances. The good news is this course can generally be done online, in person, or over the telephone. The course is approximately two hours in length.