What You Need for Bankruptcy
Bankruptcy is the legal and orderly court-supervised process for unwinding, reorganizing or liquidating a debtor's assets in order to satisfy the claims of creditors. Bankruptcy can be voluntary or involuntary, and bankruptcy filers can be individuals or businesses. Chapter 7 deals with the liquidation of individual or business assets and the discharge of debt. Chapter 11 deals with the reorganization of businesses. Chapter 12 regulates bankruptcies among farmers and fishermen, while Chapter 13 deals with the reorganization of the debt of individuals. Specific filing requirements vary depending on where you file and under which chapter, but there are common requirements.
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Qualifications
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Prior to filing, you must meet the qualifications for filing. Because Chapter 7 bankruptcies frequently result in the discharge of large amounts of debt, many jurisdictions restrict the number of people who can seek a remedy under this chapter. Your state may require a means test for Chapter 7. If you earn too much income, the state may force you into Chapter 13, rather than allow a Chapter 7 bankruptcy. Additionally, you can only file Chapter 13 on amounts below $1,081,500 in secured debt and amounts below $360,525 in unsecured debt. If your bankruptcy involves amounts greater than these, courts may force you into Chapter 11 or prohibit bankruptcy altogether.
Filing Requirements
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In most cases, you will need to enroll in an approved credit management course. The bankruptcy court in your district will be able to provide you with a list of approved credit counselors that provide this service. You will also have to prepare a number of documents for the court, including a schedule of assets and liabilities, a schedule of expenses and a schedule of income.
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Administrative Requirements
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You must provide the court a Statement of Social Security Number, a statement declaring any compensation you paid to a bankruptcy preparer. You will also need to provide evidence of all income received from employers for the last 60 days and a list of all current contracts and unexpired leases. Generally, these documents are due within 14 days of the filing.
Fees
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You must pay a fee, which is different depending on which chapter of the Bankruptcy Code you are filing under. All chapters require a $39 administrative fee. Chapter 7 requires a filing fee of $245. The Chapter 11 fee is $1,000. The filing fee for Chapter 12 is $200. For Chapter 13, there is a fee of $235. In some cases, the court may waive this fee or agree to be paid in installments.
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