How to File for Chapter 13 Bankruptcy

Chapter 13 bankruptcy is often known as bankruptcy for the working man. It allows the debtor to pay off part of the debts owed by creating a budget and allocating excess money to creditors. Filing for chapter 13 bankruptcy is fairly easy, but requires a bankruptcy attorney due to the complexity of bankruptcy law.

Instructions

Difficulty: Moderately Challenging

1. Get together all information on debts. This includes revolving credit accounts such as credit cards or medical bills, credit involving capital such as a house or car note, as well as taxes owed to the state or federal government. Also bring along any court documents if someone is suing for money.
2. Rule out all other options. Credit counseling agencies can sometimes reduce payments to an affordable level. Bankruptcy has a very lasting effect on credit rating, and the decision to file should be considered an absolute last resort when all other options fail.
3. Meet with an attorney. Find an attorney that specializes in bankruptcy, either through referral or by simply looking in the phone book. Chapter 13 bankruptcy is complicated, and having an attorney who knows all the ins and outs to file is absolutely necessary.
4. Devise a budget. Usually a paralegal at the attorney's office, or the attorney will go over living expenses, as well as all debts that can't be discharged, such as back taxes. They will determine how much revolving creditors will receive.
5. Obtain a certificate from a credit counseling agency. This is required before the bankruptcy filing can be finalized. All the agency does is take current income and current minimum payments and living expenses to prove it's impossible to make payments.
6. File a motion in bankruptcy court. The attorney will file the motion. There is a fee due to the court when bankruptcy is filed, so check with the attorney.
7. Attend scheduled hearing. A representative of the trustee will swear the filers in, and will go over the budget with the filers and their attorney. Any questionable budget items will be discussed.