A legal court can release you from your obligations if you file for bankruptcy.Chapter 7, Chapter 11, or Chapter 13 bankruptcies are usually filed by individuals or married couples.Losing a job, going through a divorce, and dealing with a serious illness/injury are the most common reasons for declaring bankruptcy.It's not shameful or irresponsible to have to declare bankruptcy, it can affect your credit for the rest of your life.There are a number of options that may be able to help you avoid declaring bankruptcy.Learning how to evaluate your options and declare yourself bankrupt may help relieve some of your financial obligations.
Step 1: Consider hiring an attorney.
If your debt is forcing you to file for bankruptcy, you may not consider hiring a lawyer.If there is an error or misinterpretation of the law on your part, it could affect your rights in bankruptcy court.The American Bar Association's "Find Legal Help" website can be used to find bankruptcy lawyers in your area.A lawyer will be able to explain the law and all of the court proceedings to you to determine whether or not your debts are eligible for discharge, and advise you on which chapter to file under to assist you in completing and filing forms.
Step 2: There are two types of debt.
If you can't escape your debt, bankruptcy is a sound option.Not all debts are covered by the law, and some may remain with you even if you file for bankruptcy.Unsecured debts can be eligible for protection.Credit cards, medical bills, utility costs, and personal loans are included in this category of debt.If you have secured debts, they are not eligible for protection.Debt that accrues for child support, taxes, and student loans are included in this category.
Step 3: Determine if you're eligible for discharge.
There are state to state and country to country bankruptcy laws.There are limits to the number of times an individual or a married couple can file for bankruptcy in the United States.To prevent the deliberate misuse of money and to ensure that those with financial problems can find ways to escape their debt, this is to be done.If you were given a Chapter 7 discharge in the last eight years, you are ineligible to get a discharge under Chapter 13 because your debts are forgiven.If you received a Chapter 7 or Chapter 13 discharge in the last four years or two years, you are not eligible for a discharge.There isn't a waiting period for Chapter 11.If you were not given a discharge when you filed for bankruptcy, these time limits will not apply to your current case, and you should be able to proceed.
Step 4: Understand the different types of bankruptcies.
Chapter 7, Chapter 11, and Chapter 13 are the three most common types of bankruptcies.Each chapter has its own forms and proceedings, so you need to decide which chapter to file for.Chapter 7 requires you to liquidate your assets.You can lose your property at a public auction.You have to pass an income test to be eligible for Chapter 7.You will have to pay a $306 filing fee to the court, but you can either pay in installments or waive it.Chapter 11 involves a reorganization of your debts.There is no income requirement for Chapter 11.The filing fee can be paid in installments for up to 90 days.Chapter 13 has a debt adjustment.To qualify for Chapter 13, you must have a regular, steady income and have less than a million dollars in debt.You can pay the filing fee in installments for up to 45 days.
Step 5: Attend credit counseling.
Current U.S. laws require anyone seeking to file a petition for bankruptcy to attend credit counseling.The program needs to be able to proceed.To find a credit counseling agency in your area, go to the U.S. Justice Department's website.11.You can use the drop-down menu to choose which language your credit counseling agency should speak.You can get a comprehensive listing of credit counseling agencies by state.The Trustee Program does not operate in Alabama or North Carolina.You have to take a course approved by a court-appointed administrator in those states.You can find approved counselors in Alabama and North Carolina on the U.S. Courts website.A credit counseling session can be done in person, over the phone, or online.The cost of credit counseling varies by state.Before you begin your credit counseling session, you must ask for a fee Waiver from the counseling agency if you cannot afford it.You will receive a certificate after completion of credit counseling.You need to file a copy of your certificate with the court before you can file for bankruptcy.
Step 6: Form B101 was filed.
You can complete and file Form B101 once you have completed the required credit counseling.The form can be found on the U.S. Courts website.It must be perfect.You can attach a separate sheet to the form if you run out of room.If you already have a case number, you should write it at the top of any additional pages you attach.If a debt was incurred over multiple dates, you can fill in the range of dates which include the first transaction and the last transaction.If the debt was incurred on a single day, fill in the date.If you are working with an attorney or a law firm, the presiding attorney will need to sign and date the petition and include her name, address and phone number in the relevant sections.You must leave the attorney sections blank if you are not working with an attorney.
Step 7: Form 121 needs to be completed and submitted.
You will need to complete and file Form 121 in addition to Form B101.The court needs your Social Security Number or federal Individual Taxpayer ID number.The courts will protect your full number from the general public, but your number will be provided in full to your creditors.The form can be found on the U.S. Courts website.
Step 8: Provide more information.
If you've completed Forms B101 and 121, you may need to provide more information to the courts.The additional forms must be submitted to the court either at the time of the filing or within 14 days of filing for bankruptcy.You may have to submit a list of all your debts, a copy of your credit counseling certificate, and a statement of financial affairs for individuals filing for bankruptcy.
Step 9: There are requirements for Chapter 7.
There are some additional forms that are specific to Chapter 7 that you need to complete.Liquidation of personal assets is a part of Chapter 7 bankruptcy.Chapter 7 forms can be found on the U.S. Courts website.If you have leased personal property with an existing lease or have any claims secured by your property, you must complete the Statement of Intent for Individuals Filing Under Chapter 7.You must submit this form within 30 days of filing for bankruptcy or by the date that has been set for the meeting of creditors.The Statement of Your Current Monthly Income must be completed and filed by anyone declaring Chapter 7 bankruptcy.If your debt is not primarily consumer debts or if you have military service, you must complete and file Form 122A-1Supp, the Statement of Exemption from Presumption of Abuse, along with your Form.You will have to pay a Filing Fee of $306 to the court.Depending on your financial situation, the fee can be paid in installments for up to 90 days.
Step 10: Chapter 11 requirements are filled.
There are additional requirements and forms that need to be completed.There are no minimum income requirements for reorganization of debts and assets in Chapter 11.Chapter 11 forms can be found on the U.S. Courts website.All individuals filing under Chapter 11 must complete Form 104, the list of the 20 largest Unsecured claims against you who are not Insiders.You must not include any claims by anyone who is determined to be an "insider", which includes your relatives, general partners/partnerships, corporations in which you are an officer/director/person in control/owner of 20% or more of voting securities, and any managing agents.All individuals who are filing under Chapter 11 must complete Form 122-B.If you need more space, you can attach a separate sheet to the form.You will need to pay a filing fee of over $1,000 to the court.The fee can be paid in installments for up to 90 days.
Step 11: The requirements for Chapter 13 are complete.
Chapter 13 has its own requirements that need to be completed.If you meet certain income requirements, your debts will be adjusted in Chapter 13.Chapter 13 forms can be found on the U.S. Courts' website.All individuals filing under Chapter 13 must complete Form 122C-1, the Statement of Your Current Monthly Income and Calculation of Commitment Period.Your gross wages, tips,bonuses and other sources of income are taken into account when calculating your financial status, as well as alimony and child support.Form 122C-2 is used for the calculation of your disposable income.The purpose of Form 122C-2 is to calculate your deductions from your income to get a more complete picture of your finances.Form 122C-2 requires you to provide the court with a comprehensive summary of expenses you incur for food, clothing, out-of-pocket health care, monthly mortgage or rent payments, utilities and insurance, and transportation expenses.Depending on where you attend the court, Form 113 may be required.You may have to use a local form plan.To determine which form you will need to complete Chapter 13 bankruptcy, check with your local court.You will have to pay a filing fee of $281 to the court.The fee can be paid in installments for up to 45 days.
Step 12: There is a post-filing debtor education course.
In addition to the pre-bankruptcy credit counseling session, anyone filing for bankruptcy in any chapter must also complete a post-filing debtor education course.Fiscal responsibility topics will include developing a budget, managing your money, and using credit with caution.You can find approved providers on the U.S. Department of Justice website.The course usually lasts two hours.It can be attended in person, on the phone or online.Depending on where you take the course, the fee is between $50 to $100.If you can't afford the fee, you may be able to waive it.You must ask for the fee to be waived before you attend the course.Upon successful completion of the course, you will receive a certificate.If you want to verify your attendance in and completion of the course, you should keep this certificate for your records.
Step 13: Wait for the ruling.
You will await a decision once you have paid all court fees and completed all of the required forms.You will get a discharge if the court decides to dismiss your debt.Depending on which chapter of bankruptcy you file for, the duration of time before you receive a discharge ruling will vary.Before granting a discharge in a Chapter 7 case, the court must wait for any objection to discharge complaints and any motion to dismiss the case for substantial abuse requests to be filed.If no complaints are filed within 60 days of the first meeting, the judge will grant a discharge.Four months after the initial petition was filed, this occurs.Once all payments are made under the plan, the court will typically grant a discharge in a Chapter 11 or Chapter 13 case.The payments are usually made over the course of three to five years, with an average discharge date of four years after the initial petition was filed.The judge can deny a discharge and dismiss your case if you don't complete the financial management course.If you are disabled, incapacitated, or on active military duty in a combat zone, certain limited exceptions are made.Keep the discharge order for your records if you get a discharge.If you misplace the discharge order, you can request a copy from the clerk of the court where it was issued.