How To File For Bankruptcy

The path of Chapter 7 bankruptcy is well-established and should progress without unforeseen difficulties. Read on to learn more about what is involved with our overview of the procedures to follow.

Debt Analysis

Remember some debts cannot be discharged in Chapter 7 bankruptcy such as child support obligations, the majority of student loan balances, recent tax debt and child support obligations. If collateral has been pledged for a debt, if you are not current when you file for bankruptcy, the creditor may take the property, if you are not current following your case.

Property Exemptions Determinations

Every state has certain exemption laws statin the property types you can keep under Chapter 7 bankruptcy, For example, the majority of people can keep their retirement accounts, house furnishings, a reasonable car and some equity in a home. You will want to ensure what you can protect prior to filing.

Eligibility

The majority of people must take and pass a means test before they can qualify for a debt discharge in Chapter 7 bankruptcy (Some individuals include people whose debt is primarily from a business as well as some personnel from the military.) When your gross income is more than the median income for a family of your given size in the state where you reside – you may not qualify. If it is less, you will. Should you not qualify, toy will take the expenses allowed from the income to decide whether you will be permitted to utilize Chapter 7 bankruptcy.

Redeeming Or Reaffirming Secured Debts

If you want to keep a property you have pledged collateral on for a loan, you will need to keep paying the creditor if you wish to retain the property. When filing for bankruptcy you will decide if you want to redeem the property (by paying off the creditor is a lump sum payment) or reaffirm the property – usually meaning you agree to continue paying the creditor under the current terms. A third option can be to surrender the property, allowing the creditor to take it. If you live in certain areas, there may be other options available as rules do differ from state to state.

Filling Out Bankruptcy Forms

Although you will have to fill out forms that are several dozen pages in length – the yare important because they tell the court about your debts, property, expenses, incomes and previous transactions. You will also list your creditors as well as your property exemptions and make decisions regarding any secured debts you have. Lastly, you will disclose any property transactions occurring in the previous ten years prior to your bankruptcy case.

Credit Counseling Course

A credit counseling course is mandatory for individuals wanting to file for bankruptcy. Very occasionally it may be done, shortly after filing for bankruptcy.

Filing The Forms

Your case gets officially under way when you file your petition. The majority of people file all the forms at once, but if time is of the essence there is an option for emergency filing.

Filing Fees And Fee Waiver Requests

When you file the necessary forms, you will pay a fee for filing. You may request the court to split the payments into quarters if you cannot afford the filing fees up front. If you cannot pay at all, you will need to apply for a waiver of fees by filling out the fee waiver application and presenting it with your bankruptcy petition. A judge will then make a determination but the income or your household may not exceed 150 percent of the federal poverty guidelines.

Document Submission

The bankruptcy trustee will require documents that show evidence of the information you supplied in the bankruptcy filing forms. Expect to send along paycheck stubs, tax returns, bank statements, profit and loss statements,

Meeting Time

Usually you will only need to attend a single meeting at the court with a trustee. The trustee will verify your identification and will ask the standard questions that are needed to be answered by all debtors as well as specific questions relevant to your case. It is possible a creditor or two or more, may appear but this is not usually the case.

Filing of Objections And/Or Motions

If you want to dispute acclaim from a creditor or you are seeking the elimination of certain liens – you will need to tackle these matters before the closure of your bankruptcy case. However, if you overlook a lien, the majority of courts will allow you to revisit the case at a later time.

Winding Up Secured Debts

In your bankruptcy forms you explained how you would handle debts that have been secured. These matters will have to be addressed before your case can be closed. For example, if you promised to return a car to your lender you have to make sure said car is available.

Debtor Education Course

Once paperwork has been filed you will need to complete a debtor education course before your discharge can be obtained. You will not get a discharge if you fail to file the certification showing you have completed this course. This may become a major expense as you will likely have to a file another motion as well as an additional filing fee so the case can be reopened.

Discharge

When a successful bankruptcy has been completed the court will issue an order that will discharge all of your debts that qualify. Once this happens, you no longer are under a legal obligation to pay the debt and the there is no legal approaches the creditor can make to obtain payment.

Source: O’Neill, Cara. “Filing a Chapter 7 Bankruptcy: Basic Steps.” Www.nolo.com, Nolo, 12 Nov. 2014, www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy-29454.html.