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How Do I File For Bankruptcy

When your debts overtake you then you may choose to file a Chapter 7 bankruptcy. A Chapter 7 bankruptcy is a straight liquidation bankruptcy and gives you the chance to be relieved of your debts owed as on that date. There are some debts which cannot be discharged, such as criminal fines and alimony or child support. You can only file a Chapter 7 bankruptcy once in a cycle of eight years.

When you file your bankruptcy, all of your property and income that you have on the date you file becomes subject to the claims of your creditors. However, you are entitled to protect, or exempt, certain property. Some of the property which is exempt includes your interest in a car up to $2150, household furnishings, clothes, musical instruments, and the federal earned income tax credit, a certain portion of wages, almost all government benefits, some bank accounts, and possibly the equity in your home.

Before you can file bankruptcy, you must complete a credit counseling course. This course can be completed on the internet or by telephone. Depending on your financial situation, you may have to pay a fee. Once you complete the course, you or your attorney prepare a list of all your assets and property that you want exempt, the names and addresses of your creditors and the amount you owe. Your current income and expenses along with a statement concerning your financial affairs is to be got ready.

All of your information must be prepared on court approved forms. These forms are then filed with the United States Bankruptcy Court, together with a filing fee. The filing fee is $299. You can ask the court for a waiver of the fee if you cannot pay it. Also you may pay the filing fee in three installments over 84 days after filing.

Once you file your bankruptcy, the court set up a meeting of you with your creditors. The court will notify all of the creditors and set a date, time and place for a hearing under Section 341. This hearing is usually scheduled about thirty days after you file your bankruptcy petition. You must attend this hearing .Answer to questions will be under oath .If you fail to attend this meeting as scheduled your case is liable to be dismissed.

No later than seven days before this hearing, you must give a copy of your most recent federal tax return to the trustee, or a transcript which you can obtain from the Internal Revenue Service. If you do not do this then again your case can be dismissed.

The trustee is appointed by the court and is the representative of your creditors. It is the duty of the trustee to determine whether you have properly completed all of the forms and listed all of your assets and your creditors. It is also the trustee’s duty to take possession and sell any of your non-exempt property and distribute any proceeds of that property among your creditors. You might be required to make further court appearances at his or her request. Also, if anyone objects, for any reason, to your being discharged from all of your debts you will have to appear in court to defend your position.

Within 45 days after the date of your meeting of creditors, you must complete a second counseling course to be eligible for a discharge. This course is on personal financial management. It can be completed on the internet or by telephone. Depending on your financial situation, you may have to pay a fee.

If all of your assets are exempt, and no one objects to your discharge, you will receive your discharge from the debts about 90 days after the meeting of creditors.

It may be noted that if you are an individual or unincorporated sole proprietor, the law does not require you to have an attorney.

However, completing all the required documents can be difficult. Hence hiring an attorney is always a help.

Once the entire process is completed the judge will sign your discharge.

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