How to File for Bankruptcy Debt Relief
If you are unable to keep up with your debts or are in danger of losing your home to foreclosure, bankruptcy may be a viable option for you. When you file for bankruptcy, you will be assigned to either a Chapter 7 or Chapter 13 plan. Which plan you must file under is determined by your current level of income and assets. A Chapter 7 plan will liquidate your debts while a Chapter 13 plan will restructure your debts to make them easier for you to repay. The cost for filing bankruptcy varies by district, but if you can prove a substantially low income level, you may be able to have your filing fee waived.
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Things You'll Need
- Proof of income
- Proof of assets
- Proof of credit counseling
- List of creditors
Instructions
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Undergo credit counseling with a federally approved credit counseling agency within six months of filing for bankruptcy. Due to changes made to the Bankruptcy Code in 2005, every individual must seek credit counseling prior to filing.
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Visit the bankruptcy court in your district to file for bankruptcy. Call the courthouse beforehand to be sure you arrive with the correct documentation. Provide proof of approved credit counseling, regardless of which district you file in.
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Fill out the "means test" packet that the court clerk gives to you. This contains all of your financial information and will determine which type of bankruptcy you qualify for.
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Pay the bankruptcy filing fee or request a low income fee waiver application from the court clerk. The filing fee for your bankruptcy will range from $275 to $300, depending on the type of bankruptcy you choose.
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Notify your creditors of the impending bankruptcy once you have received a court date. Send written notification of the bankruptcy to each creditor, along with your case number, the contact information of the bankruptcy court, and the date of the hearing.
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Attend your bankruptcy hearing. If you are filing for a Chapter 13 bankruptcy, the court will outline for you a repayment plan based on your current level of income and debt. If you file under Chapter 7, the court will inform you of how your assets will be distributed.
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Tips & Warnings
Consider hiring an attorney. Although it is possible to file for bankruptcy without one, an attorney can make sure that you do not make any mistakes during filing that would result in your case being dismissed, and inform you of the exemptions you qualify for in your state.
Filing for bankruptcy will appear on your credit report for seven to ten years, depending on which form of bankruptcy you file. A bankruptcy is very damaging to your credit score.
References
Resources
- Photo Credit Overwhelming debt can lead to bankruptcy.
