Filing for bankruptcy can save your life. When the debt starts accumulating and you can see no way out, bankruptcy can be a path towards getting rid of your debts while salvaging as much as you can of your property. However, the process is anything but easy. There’s a lot of paperwork and investigation included, and you’re bound to get out of it with a certain degree of losses. It’s imperative that you explore other debt-relief options to salvage your financial situation. In case you do conclude that bankruptcy is your best course of action, then it’s time to walk the path with a solid heart. That being said, here are the steps you’ll need to take to file for bankruptcy.
Gathering Financial Documents
Long before you file for bankruptcy or seek the courts, you’ll need to prepare a whole set of documents. These documents serve in presenting your financial situation to the utmost detail; hence why the paperwork is daunting. During this preparation phase, you’ll need to get into as much detail about your financial situation as possible, which will include the debts, income, assets, and living expenses. You’ll also need to provide proof to support your claims for every aspect of your finances, so have it ready to present it when you’re asked to.
Get Credit Counseling
Next, you’ll attend credit counseling within six months before you file for bankruptcy. You’ll have to do that through an agency accredited by the Department of Justice, and that goes for both Chapter 7 and Chapter 13 of bankruptcy. The session will last for an hour or two, during which the counselor will discuss your financial situation with you, conclude the best chapter of bankruptcy you should file for, and help you set up a payment plan.
You’ll start making payments after 30 days of this session, even if your petition wasn’t accepted yet, so make sure you’re comfortable with the payment details. You’ll also need to have your documents prepared before you attend the session, and either present it in a face-to-face meeting or send it in the case of a phone session.
Fill in Bankruptcy Forms
If you think the paperwork is over, we’re sorry to tell you that you’re just getting started. You’ll need to fill at least 23 bankruptcy forms, around 70 pages in total. These forms will dissect your financial situation like no other, inquiring about every penny you make, own, spend, and owe. The bankruptcy lawyers at TL Brown Law Firm point out that the process is daunting; a single mistake or a missing piece of information can result in rejection. You’ll do yourself a huge favor by hiring a lawyer who can take your hands through these steps and ensure you get the most out of the case. If you do get a lawyer, you’ll also need to state in the forms that they’re helping you, in which case the lawyer will be the one filling in the forms.
Pay the Filing Fee
To file for bankruptcy, you’ll be charged filing fees that will vary depending on the chapter you’re filing for. Typically, these fees are due by the time your petition is filed to the court, but you can face some leniency in case you’re unable to deliver the payment. Your first option will be to apply for installments through which you can pay your fee, which can extend up to 4 months of payments. Alternatively, you can apply for a fee waiver if you can’t even pay for the installments. However, you’ll have to satisfy certain criteria to qualify for this option.
Print Bankruptcy Forms
You’ll then print the bankruptcy forms you’ve carefully filled. Take care that the court doesn’t accept double-sided pages, so print them all on one side. Once printed, make sure to sign all the pages. In addition to the forms, you’ll need to include the petition forms, credit counseling certificate of completion, paychecks or pay stubs, and installation plan or a fee waiver. You may need to provide more than one copy of the documents, so check with your local bankruptcy court to be fully prepared.
Submit Bankruptcy Forms to Court
Submitting the forms to the court will be done in around 15 minutes. You’ll state that you want to file for bankruptcy, after which they’ll check your documents and ask you to wait. You’ll get the documents back once they upload them to the court filing system, after which you’ll get your bankruptcy case number, the name of your designated trustee, and the details of your meeting with the said trustee.
Mail Your Documents to Your Assigned Trustee
Next, you’ll mail your documents to the trustee assigned to you. You’ll be assigned a trustee in both Chapters 7 and 13 of bankruptcy. The trustee will be the official person overseeing your case. They’ll keep a close eye on you to make sure you’re sticking to the plan and guidelines. They’ll also liquidate or sell your non-exempt property to repay your creditors according to the plan. They may also contact you for additional information needed to finalize the discharge of your debts, so make sure to follow up on your emails so you don’t miss that.
Attend Your 341 Meeting
Once all affairs are in proper order, the trustee will invite you to a meeting with your creditors. During this meeting, they’ll be notified of your debt discharge and forced to comply with the automatic stay on your outstanding debts. As for you, the trustee will ask you a set of standard questions to prove your identity and financial situation. They’ll also be looking for any warning signs indicating you’re abusing the system for personal interest.
Complete Bankruptcy Course
Finally, you’ll be required to complete another bankruptcy counseling session, known as the Debtor Education Course. You can complete it either online or over the phone, but you have to receive the certificate of completion; otherwise, your debts won’t be discharged.
Filing for bankruptcy is sure to leave a lasting mark on different aspects of your life. Although it is exhausting, it may be your only option to relieve your debts and start your life anew. To minimize your losses and salvage your property as much as possible, you’re better off hiring an experienced lawyer who can guide you through the process for affordable fees.