How to File for Bankruptcy: A Step by Step Guide

Most of us don’t know how to file for bankruptcy. The reason for this might be that most of us don’t want to go through with it. In the event that you encounter bankruptcy, would you know how to file it on your own? In this article, we provide some basic steps to remember when filing chapter 7 bankruptcy by yourself.

How To File For Bankruptcy: What You Should Know

1. Listing Your Finances

The first thing you should do if you have to file for bankruptcy is to prepare all your financial data. The reason for this is to verify and document whatever you claim is true. Penalties for presenting false information upon the filing of bankruptcy may lead you to committing perjury. Your financial documents should include information on your income, debts, property, and other assets, as well as monthly household expenses.

2. Obtain The Required Credit Counseling

It is important to remember to get credit counseling six months prior to filing your petition for bankruptcy. This requirement was only enacted in 2005 when bankruptcy laws were revamped. You may obtain credit counseling from agencies sanctioned by the United States Trustee’s Office available on their website. Typical counseling usually lasts for one to two hours and is done over the phone or through the internet. Failure to undergo credit counseling can be grounds for cancellation of your petition.

3. Petition Filing and Documentation

After you’ve undergone credit counseling, you should start filing the necessary forms to begin your bankruptcy case. This where your listing of financial information will prove useful as you have already prepared it in advance. Once you have completed this step, an automatic stay will take effect and those creditors running after you will cease taking actions against you.

4. Creditors’ Meeting

After you’ve filed the proper paperwork and your petition accepted, your creditors will receive a notice from the court that you have included them in your petition. In the meeting, you will have to answer inquiries about your finances and fill out bankruptcy forms from a trustee and some creditors, under oath.

5. Bankruptcy Admissibility Confirmation

When the trustee has reviewed your petition and all the information you presented, a court will decide whether you are eligible for chapter 7 protection or not. Chapter 7 eligibility may not be granted if you fail to pass a means test which determines if you can afford a settlement plan.

If ever the court denies approving your petition, under the law, you may still file for Chapter 13 bankruptcy.

6. Post-Bankruptcy Financial Counseling

You will need to go through a post-bankruptcy financial counseling program once your petition for bankruptcy is approved. This should happen within 45 days after the creditor meeting. If you fail to send the trustee a confirmation of a completed post-bankruptcy program, the bankruptcy procedure will fail and your debts will not be discharged.

7. Discharged Receipt

This is the final step in the bankruptcy petition process.

If everything goes well, within three to six months after your petition, you will receive bankruptcy release from the court and the automatic stay is lifted.

A few days after you obtain your discharge, your bankruptcy case will be formally closed and your creditors will no longer pursue your debts.

Want to know more about what to do before filing for chapter 7? Watch this video from TODAY’S TMJ4: