The Easiest Ways of Filing Bankruptcy

The United States Bankruptcy Court acknowledges that filing for bankruptcy is an often complex and confusing task. Rules and regulations are numerous, and it does not help that people filing for bankruptcy are often burdened by stress and worry because of their financial problems. Despite that there are some easy ways to file for bankruptcy, including one simple method requiring just 15 or 20 minutes to fill out the paperwork and file.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is considered the simplest form of bankruptcy, although overall the rules are often as complex as other forms. Once filed Chapter 7 is usually completed in just a few months, with nonexempt assets sold to pay creditors. Rural acreage or expensive jewelry or sports memorbila are examples of nonexempt assets. Assets that are exempt are not sold in bankruptcy. A primary residence or automobile below a certain value may qualify as an exempted asset. All unsecured debts, such as credit cards, are eliminated through Chapter 7. Chapter 7 is considered simple because it quickly eliminates debts.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is similar to Chapter 7 but requires a payment plan lasting three to five years. The goal is to pay off unsecured debts but that does not always happen. The bankruptcy court allows for reasonable living expenses, with money remaining used to pay off debts. Depending on income, you may pay all unsecured debt over three to five years, a lessor amount or even none. Unsecured debt remaining at the end of the payment plan is wiped out by the bankruptcy.

Quick Filing

So-called "skeletal" or "bare bones" filings are available for Chapter 7 and Chapter 13 -- the most popular forms of personal bankruptcy. Forms for "bare bones" filings are available from federal bankruptcy courts. The form is only three pages long and asks only basic information about your financial situation. Check boxes are provided for estimating how much you owe and to how many creditors. It takes only a few minutes to fill out the form with the bankruptcy official after submission of the form to the court. The simplicity makes the "bare bones" filing the easiest way to file for bankruptcy.

Following Up

The "bare bones" filing requires immediate follow-up, however. You must complete the full bankruptcy application, which will may require the assistance of a bankruptcy attorney. The completed application is due within 14 days of the bare bones filing, with some material requested sooner. Many people making bare bones filings are acting quickly to avoid foreclosure or to reverse garnishment of their wages because of a lawsuit and judgment. Bankruptcy stalls foreclosure and stops wage garnishment immediately through a special legal injunction called the "automatic stay." The injunction is signed by a judge after receiving a "bare bones" or complete bankruptcy application.

Attorneys

The only other quick and easy way to file for bankruptcy is by hiring an experienced bankruptcy attorney. An attorney can file the "bare bones" application the same day of your initial consultation. However, the form is so simple that you should do it yourself. Also, hasty decisions about filing for bankruptcy are best avoided. Once the bankruptcy is filed, the information remains on credit reports for 10 years, even if you later have a change of heart and withdraws from the bankruptcy.

References

• United States Bankruptcy Court for the District of Rhode Island: Filing an Emergency or Skeletal (Bare Bones) Bankruptcy Case
• Federal Trade Commission; Building a Better Credit Report; March 2008
• Federal Trade Commission: Knee-Deep In Debt
• Nolo: How Bankruptcy Stops Your Creditors -- The Automatic Stay