Filing For Bankruptcy
The first step in a bankruptcy filing is gathering your financial information. Obtain a copy of your credit report and list down all your debts, both secured and unsecured. Also have on hand your last two tax returns and existing loan documents. You should also prepare the deeds to any properties you own, whether you intend to file Chapter 7 or file Chapter 13 bankruptcy.
Next, you will need to fill out the bankruptcy forms, known as schedules. If you file Chapter 13, you will also have to submit a repayment plan proposal. Once the forms are complete, you can make the bankruptcy filing at your local bankruptcy court. The fees are $200 to file Chapter 7 bankruptcy and $185 for Chapter 13. Immediately after filing for bankruptcy, you are protected from direct contact or solicitation efforts from your creditors through an automatic stay.
About a month after the bankruptcy filing, a meeting of creditors will be called by a bankruptcy trustee. Known as a 341 meeting, this is where you negotiate the terms of the bankruptcy—such as non-exempt assets if you file Chapter 7 or the repayment plan if you file Chapter 13—with your creditors. A judge will mediate if an agreement cannot be reached. Creditors are then given a four- to six-month period to file complaints, after which you will receive your bankruptcy discharge.
Filing Bankruptcy On Your Own
Filing for bankruptcy without a lawyer can be tough, but it’s certainly doable. One of the primary differences is that you will have to do the means test on your own, meaning you have to take a thorough inventory of your finances—particularly your debt and income. This will determine whether you can file Chapter 7 or file Chapter 13 bankruptcy.
Afterwards, you can download the bankruptcy filing forms you need from the U.S. Courts website. Make sure to read and follow the instructions, and have the necessary supporting documents on hand. You may have to take credit counseling courses prior to filing and a debtor education class afterwards. Once you’ve filed, you will receive a notice stating the date and venue of the 341 meeting. Provided none of your creditors contest the bankruptcy claims, you will receive your discharge after the required waiting period.
How To File Chapter 7 Bankruptcy
Chapter 7 bankruptcy involves selling off some of your assets to pay off your creditors, and having most of the unsecured debt discharged. The means test, administered before the bankruptcy filing, determines whether or not you qualify for Chapter 7 bankruptcy. You can only file Chapter 7 if your income is below your state’s median or is not enough to pay off your current debt. During the creditors’ meeting, the trustee determines which of your assets are exempt from liquidation. Once you and your creditors reach an agreement, they are given 60 days to file complaints. If no such actions are taken, you will receive your discharge a few days afterwards.
More Information on Filing Chapter 7 Bankruptcy
How To File Chapter 13 Bankruptcy
In Chapter 13 bankruptcy, you settle your debts through a repayment plan agreed on by you and your creditors. The plan is proposed at the start of the bankruptcy filing and finalized during the creditors’ meeting. Some unsecured debt may also be discharged when you file Chapter 13 bankruptcy. The repayment plan typically lasts three to five years, and you get your discharge after you’ve made the final payment.