How to Claim Bankruptcy

Claiming bankruptcy is something you shouldn't do unless you absolutely need to. Bankruptcy will stay on your credit report from 8 to 10 years and you will find it rather difficult to buy anything based on credit. Claiming bankruptcy will be rather costly, as well. It could cost up to $1700 in court fees and paperwork process.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Lawyer
• Money

1. Get a lawyer. Your lawyer can tell you which bankruptcy would work best for you and you will also find out approximately how much it will cost in order to file and proceed with the bankruptcy.
2. Determine which bankruptcy you will need to file. Most commonly filed are Chapter 7, 11, and 13. Chapter 7 is mostly for individuals that have the court determine how much will need to be paid back and what will be discontinued according to the amount earned. Chapter 11 caters to mostly companies or corporations but individuals can use it as well. This can save a person from foreclosing on their house by reorganizing payments and giving a fresh start. Businesses will have to prove how much they make compared to how much they owe and the court will decide if they qualify to not pay back what is owed. Chapter 13 essesntially takes a percentage out of paychecks in order to help pay back what is owed.
3. Gather enough funds in order to pay the court fees and attorney fees. This could become costly and you should determine if trying to claim bankruptcy is worth it. Sometimes the courts will decide against you being able to claim bankruptcy, if they feel you make enough to pay back your debts.
4. Develop a list of assets, liabilities, and if you own a business, you will need to include any business affairs. This listing will need to be included in your paperwork that is turned into the court.
5. File a petition with the bankruptcy court. The decision from the court could take about six weeks.

Tips & Warnings

• Be sure to include all of your debts and all of your earnings in order to be approved for bankruptcy. If you are turned down, you can not refile for another 180 days.