What Is Involved in Filing for Bankruptcy?
Whether you decide to file for Chapter 7 debt relief or Chapter 13 debt restructuring, you must follow a number of steps set by the federal government, according to the book “How to File for Chapter 7 Bankruptcy.” Also, you do not have to hire a lawyer to file consumer bankruptcy in the United States.
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Credit Counseling
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Before filing bankruptcy, you must complete a credit counseling session with a government-approved agency, according to the Federal Trade Commission and the book “How to File Chapter 7 Bankruptcy." Unless you live in an area recently struck by a natural disaster like a hurricane, you cannot file bankruptcy unless you enclose a copy of your course completion certificate.
Paperwork Submissions
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Besides your credit counseling certificate, you must complete forms regarding your identity, citizenship, assets, income and debts, according to the book “How to File for Chapter 7 Bankruptcy.” If you decided to pursue partial debt repayment under Chapter 13, you must also complete forms proposing a payment plan. No matter what type of bankruptcy you file, you must also include a copy of your last federal tax return.
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Payment of Court Costs
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You must pay or arrange to pay court costs at the time you file bankruptcy, according to the United States Bankruptcy Court website. As of 2010, it cost $274 to declare Chapter 13 and $299 to file a Chapter 7 case. Your local bankruptcy court might approve a payment plan if you have extreme financial problems, but you must pay any obligations before your case is finalized.
Negative Credit Reporting
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Soon after you file bankruptcy, the local court will submit reports to the major credit bureaus, according to the book “How to File for Chapter 7 Bankruptcy.” If you declared Chapter 13, your negative credit reporting will last for seven years from the filing date; Chapter 7 credit reporting lasts for 10 years from the date you declared bankruptcy, according to Experian.
Attending 341 and Discharge Hearings
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To finalize bankruptcy, you must attend a 341 meeting and a discharge hearing, according to the book “How to File for Chapter 7 Bankruptcy.” The 341 meeting offers your creditors the chance to object to your case if they believe you lied to get credit or to file bankruptcy; such objections are rare. In the discharge hearing, a local bankruptcy judge will render a bankruptcy decision. He can approve your bankruptcy, deny your bankruptcy or order you to provide more information and re-file your petition.
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