Procedure for Bankruptcy
Those who wish to file bankruptcy in the United States must follow federal laws and procedures to successfully complete their case. Chapter 7 bankruptcy allows debtors to have most of their obligations permanently forgiven, while Chapter 13 calls for the consumer to repay most of their debts under a court-structured plan.
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Gathering Debt Information
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Before pursuing bankruptcy, a debtor must have a written account of all obligations such as credit card bills, loans, utility fees, mortgage or rent, medical bills, and any child support, alimony or student loans.
Gathering Income Information
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Part of the federal bankruptcy procedure is for the consumer to gather and provide copies of the last three income tax returns, recent pay stubs, and banking account statements.
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Credit Counseling
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All bankruptcy petitioners must complete a court-approved credit counseling program (see Resources below) and provide a copy of the graduation certificate.
Means Testing
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People pursuing Chapter 7 debt forgiveness must pass a federal means test (see Resources below) proving their income is too low to pay living expenses as well as debt obligations.
Form Completion
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Once these steps have been completed, a person can download and print the forms from the U.S. Bankruptcy Courts, follow the instructions to complete them, and then take the package to their local division.
Paying Fees
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Those who cannot pay bankruptcy filing fees may be approved for a payment plan upon application to the local bankruptcy courthouse. As of August 2009, a Chapter 13 cost about $275 and Chapter 7 cost about $300 for those who file without an attorney.
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