A legal court can release you from your obligations if you file for bankruptcy.Chapter 7, Chapter 11, or Chapter 13 bankruptcies are typically filed by individuals or married couples.Losing a job, going through a divorce, or 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 have long-term consequences on your credit.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 can help relieve some of your financial obligations.
Step 1: Consider hiring an attorney.
If you are forced to file for bankruptcy because of your debt, 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 the 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 different types of debt.
If you can't escape your debt, bankruptcy is a good option.Not all debts are covered by the law, and some may remain with you even if you file for bankruptcy.Unsecured debts are eligible for protection.Credit cards, medical bills, utility costs, and personal loans are included in this category of debt.Not all secured debts are eligible for protection.Child support payments, taxes, and student loans are included in this category.
Step 3: Determine if you are eligible for discharge.
There are state to state and country to country bankruptcy laws.There are limits to how often 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, you can't get a discharge under Chapter 13.There is no 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 one to file.Chapter 7 requires you to liquidate your assets.You can lose your property at a public auction.To qualify for Chapter 7, you must pass an income test.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 be eligible 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 should be able to proceed.You can find a credit counseling agency in your area by going to the U.S. Justice Department's website.112.You can use the drop-down menu to choose which language you want your credit counseling agency to speak.You will 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 the 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 and county.If you can't afford to pay the fee, you should ask for a fee waiver from the counseling agency.You will receive a certificate after completion of credit counseling.You have to file a copy of your certificate with the court before you can file for bankruptcy.
Step 6: Form B101 is used.
You can complete and file Form B101 once you've 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 it in.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.The attorney sections must be blank if you are not working with an attorney.
Step 7: Form 121 needs to be completed and submitted.
Form B101 and Form 121 are required to complete and file the Statement About Your Social Security Numbers.The form gives the court your Social Security Number or federal Individual Taxpayer ID number.The courts will protect your number from the general public, but they will not give it to you.You can find this form on the U.S. Courts website.
Step 8: Provide more information.
If you've completed Forms B101 and 121, you may need to provide additional 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 and a copy of your credit counseling certificate.
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.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 creditor.The Statement of Your Current Monthly Income must be completed and filed by anyone declaring Chapter 7.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 Under 707(b)(2), along with your Form.You will need to pay a $306 filing fee to the court.You can either pay the fee in installments or waive it for up to 90 days.
Step 10: There are requirements for Chapter 11.
There are additional requirements and forms that must be completed.There are no minimum income requirements for reorganization 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.You can attach a separate sheet to the form if you need more space.You will have 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, Chapter 13 will adjust your debts.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 to calculate 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 financial status.Form 122C-2 will require 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 be required 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 debtor education course.Fiscal responsibility topics will include developing a budget, managing your money, and using credit with caution.You can find approved course 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 and $100.You may be able to have the fee waived if you can't afford it.You have to 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 wait for a decision once you have paid all court fees and completed all of the required forms.You will receive a discharge if the court decides to dismiss your debt.Depending on which chapter of bankruptcy you file for, the duration of time before 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 after the first date for the 341 meeting, a 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 fail to 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 are granted a discharge.If you misplace the discharge order, you can request a copy from the clerk of the court where it was issued.