How to File for Bankruptcy

The decision to file for bankruptcy is one of the most important you’ll ever make in your life, so it’s critical that you understand the full process before setting out. What follows is a general guideline you can follow as you work your way through filing for bankruptcy.

1. Research bankruptcy and all alternatives.

You want to get a good, general idea about how bankruptcy could affect your life, so be sure to read up on the process and consequences as much as possible. Factors you should consider include whether you’ve tried to negotiate with creditors, your liabilities and assets, and whether you can live without credit for a while, among others.

2. Gather information on all your debts, expenses, and income.

How much you owe, how much you make, and how much you spend per month are going to be three extremely important factors involved in your decision of whether to file for bankruptcy. You should gather as much tangible information on these as possible — bank statements, credit card statements, loan and mortgage documents, etc., so you have a full financial picture before you.

Not only will this information be important regarding whether you decide to file, it will also help determine what type of bankruptcy protection you may request, for example, Chapter 7 or Chapter 13.

3. Talk to a bankruptcy attorney.

Once you have gathered all of your financial information, you should make an appointment for a consultation with a local, experienced bankruptcy attorney; often times, the initial consultation is free. You should be completely honest with the attorney regarding your situation so he can offer the best advice possible.

4. Pre-filing credit counseling.

If you have decided to file for bankruptcy, the law now requires that you attend mandatory credit counseling through an agency approved by the U.S. Trustee Program before filing.

5. Filing.

Now comes the paperwork. If you have hired a bankruptcy attorney, she will handle the bankruptcy petition and supporting paperwork for you. If your creditors contact you after you have filed for bankruptcy, refer them to your attorney (this is another good reason to hire an attorney to take care of your case).

6. Creditors’ meeting.

After you file for bankruptcy, there will be a creditors’ meeting in court at which you will have to appear; it should be the only time you have to appear in court regarding the bankruptcy.
7. Resolution.

If you have filed Chapter 13 bankruptcy, you still have the repayment plan period ahead of you for the next three to five years; if you have filed Chapter 7 bankruptcy, once the court approves your petition, your debts will be canceled. You may also be required to attend financial education class.

Once your bankruptcy is complete, you can begin thinking about rebuilding your credit.