How to File for Chapter 7 Bankruptcy

Sometimes debt can become more than you can handle. Changes in a job or a divorce can throw your cash flow off balance and cause more money to be going out than coming in. During situations like these you have to consider your options and decide the best way to recover from a financial hardship. Filing for a Chapter 7 Bankruptcy is one way to dig out from under debt and get a fresh start.

Instructions

Difficulty: Easy

1. Find an attorney. Research bankruptcy attorneys and find the best one for your money. Get referrals from family and friends on the lawyer they used for their bankruptcy.
2. Make a list of all credit cards.Name each credit card company and the balance on the account. Include account numbers and add any amounts not shown on your last statement. Call the credit card company and have them mail you an up-to-the-minute account balance.
3. Get your last bank statements. Go to your bank and get a statement for each checking account and savings account you have with the bank. Include Certificates of Deposit and IRA accounts.
4. Gather all income paperwork.You will need to show total income to the courts to prove that you cannot pay your debts, such as income statements and pay stubs. List all royalties, if any, and any stock dividends you receive.
5. Identify your assets and liabilities. Bring the mortgage on your house and any other real estate to your lawyer. You will need to list all other assets, which could include the inventory of your business and any stocks you might own. Make a list of all liabilities such as mortgage payments and vehicle payments. Don't forget to include child support payments that you pay out.
6. File the bankruptcy petition and other paperwork with the court. Your lawyer will help you fill out the forms needed and help you file. They will advise you on what you need to do to get the debt relief you need.

Tips & Warnings

• Go to a credit counseling class and learn how to develop financial goals and stay out of debt. Learn how to budget so you won't get into financial trouble again.
• Be sure that a Chapter 7 is the best option. A Chapter 7 will stay on your credit report anywhere from seven to ten years and make it hard for you to get credit, such as a loan for a car or a mortgage later.