How to File For Bankruptcy
It can be a long process when you decide to petition for bankruptcy but you are not required to make the process difficult. A bankruptcy requires you to complete the paperwork appropriately and approach things in the manner prescribed. People just need to understand how to file for bankruptcy.
People who are broaching the subject of bankruptcy for the first time will want to learn how to file for bankruptcy and are advised this will be a simple matter if they decide to approach the right people for handling the case. When debtors attempt to file for bankruptcy their case will be examined by a government employee who is also called the trustee. The trustee will be given the responsibility to oversee the bankruptcy and handle all issues during the process. As
As petitioners, people will be required to mainly deal with the trustee and will not be required to appear in the courts unless it is to confirm a debt payment plan in the event of a Chapter 13 bankruptcy. Most bankruptcy cases are handled through paperwork and are just like an administrative process rather than a legal proceeding.
Types of bankruptcy
There are two types of bankruptcy petitions debtors can file. They are as follows:
- Chapter 7 bankruptcy.
- Chapter 13 bankruptcy.
Debtors must consider their ability to make payments for the debts they owe before determining the type of bankruptcy to file. They must also decide whether they want to preserve certain assets because a chapter 7 bankruptcy will generally discharge all the debts but also requires the liquidation of most assets in order to make payments of at least some of the debts.
The debtor will also be required to clear a means test which will be held to exclude individuals with a substantial income and plenty of assets from filing for a bankruptcy under Chapter 7. The time taken for processing a chapter 7 bankruptcy and to have all the debts discharged is about 3 to 6 months.
The steps to file for bankruptcy
In order to have your petition for bankruptcy under Chapter 7, you will have to follow certain steps before the petition is approved.
Initially, you need to assemble on your financial information and also provide as much detailed information as possible on the following. When filing for bankruptcy jointly with your spouse it is essential for you to include his or her information as well.
You must bear in mind that collecting the information necessary will take some time.
- Your debts. Include names of your creditors, the current balances, the interest rate and the monthly payment you are required to make along with any other relevant information. Ensure that you include debts of all types including the ones you are currently paying.
- Income. Include any finances you have received over the last six months regardless of the reason and details of any finances you expect to receive in the immediate future. Mention how often you are going to receive the money and the origin of the finances. The list should include your regular working income, income from side jobs, dividend or interest from investments and any financial help you are receiving for the household from members of the family, spouse, and any other people.
- Assets and property. Include everything you own which is valuable and make it a point to list items like stocks, cars, real estate, savings accounts, collectibles, and art. Listing items like clothes, home furnishings and other personal possessions which may be particularly valuable should also be listed. Your personal possessions will be considered as exempted in some states while you could see differences in the others. They will however not be sold when you file for a chapter 7 bankruptcy. You should be having a chat with the trustee to understand the kind of items you need to provide on the list to make it a comprehensive one.
- Living expenses. Provide details about your costs for rent or mortgage, food, utilities, medical expenses, taxes, transportation, clothing, child support, and alimony. When making a list of variable expenses like utilities you should be calculating the average costs according to the previous year’s monthly bills.
You may be requested for additional documentation by the trustee to verify the amounts you have claimed. Therefore if you want your application for bankruptcy to be approved you should have the documentation in hand for the verification.
You must be prepared to undergo credit counseling from an approved agency six months before you file your petition and the creditors meeting which will be held after your petition has been accepted. After all the proceedings have been completed you are also required to attend post-bankruptcy credit counseling.
As it is clear to you filing for bankruptcy will take some effort and time but it is worth the trouble because it will free you up from some of the unwanted hassles you are presently being tied down by.
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