How to File Bankruptcy in Rhode Island
Bankruptcy may be your best option when faced with mounting and unpayable bills, defaults, and a foreclosure on your home. The process will wipe out most of your debts and loans, but also leave you with a poor credit rating that will take years to repair. Before considering this step, get some credit counseling from a qualified financial advisor.
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Things You'll Need
- Bankruptcy schedules, statements, and forms
- Tax returns
- Pay stubs
- Credit card and loan statements
- Mortgages
- Property deeds
- Bank statements
- Savings account statements
Instructions
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Chapter 7
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1
Undergo a means test. If your net income is greater than the median level for the state, after deducting mortgage payments, car payments, back taxes, and child support, you will be ineligible. Single wage earner: $46,466; family of two: $59,314; family of three: $72,809; family of four: $91,415. If you do not pass the means test, you must file a Chapter 13 bankruptcy.
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2
Attend credit counseling with a counselor approved by the federal bankruptcy court. File any overdue federal tax returns.
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3
File a Petition for Bankruptcy in federal bankruptcy court. File schedules of your assets and liabilities; a schedule of current income and expenditures; a statement of financial affairs; a schedule of executory contracts and unexpired leases; a certificate of credit counseling; statement of payment from employers, if any, within the previous 60 days; and a record of any interest you have in education or tuition savings accounts. Pay a filing fee of $299.00.
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4
Receive a Notice of Automatic Stay from the court. This stops all litigation and demands, either verbal or by letter, against you on the part of creditors.
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5
Attend a "341 hearing," at which you will be questioned by a trustee and at which your creditors may appear to contest your claim. Creditors have 60 days following the meeting to petition for relief on your claim.
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6
Turn your non-exempt property over to the court trustee, who will sell the property in order to satisfy listed, secured creditors.
Chapter 13
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7
Determine if you are eligible for a Chapter 13 bankruptcy. You must have no more than $1,010,650.00 in secured debt (debt secured by property such as a house or car), and $336,900 in unsecured debt.
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8
File a Petition for Bankruptcy in federal bankruptcy court. File schedules of your assets and liabilities; a schedule of current income and expenditures; a statement of financial affairs; a schedule of executory contracts and unexpired leases; a certificate of credit counseling; statement of payment from employers, if any, within the previous 60 days; and a record of any interest you have in education or tuition savings accounts. Pay a filing fee of $299.00.
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9
File a proposed repayment plan on which you will schedule repayment of debts over the next three to five years. All of the priority claims, such as child support, taxes, and school loans, must be paid in full or brought current.
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10
Attend the 341 meeting of creditors. The bankruptcy trustee must review your plan and approve it. The creditors have the right to object to the plan and attempt to have it amended.
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11
Make the monthly payments as scheduled to the bankruptcy trustee. The trustee distributes the approved amounts to creditors.At the end of the repayment period, receive a discharge of outstanding debts from the trustee.
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1
Tips & Warnings
Don't attempt to navigate the bankruptcy process without a qualified bankruptcy attorney. They can save you considerable money, time, and aggravation.
You will still be liable for payment of alimony, child support, federal taxes, student loans, recent purchases of more than $550 for goods bought within 90 days of your bankruptcy filling, fraudulent debts, traffic citations and other public finds, and cash advances of $825 taken out within 70 days of the filing date.
References
- Photo Credit ragged purse image by Oleg Kulakov from Fotolia.com
