People sometimes find themselves in an impossible situation. No matter how hard they try, they can’t catch up with their bills and keep getting further into debt. If you are in this situation, you may be considering bankruptcy. Understanding how to file for Chapter 7 bankruptcy will help you answer this question.
Step 1 – Examine Your Financial Situation
Before considering Chapter 7 bankruptcy, look at your financial situation. Contacting a lawyer, such as those at lawjur.com, can help you figure out what your options are. You may not qualify or you may want to try a different type of bankruptcy. Understand that you can’t get rid of student loans, child support debt, or tax debt through bankruptcy. If you opt to get rid of secured debt, you must surrender the collateral, such as your house in the case of a mortgage.
Step 2 – Look Into Property Exemptions
When you declare bankruptcy, each state allows property exemptions. You may get to keep your car, some equity in your home, your retirement accounts, and furnishings for your home. Make sure this exemption covers everything you want to keep. If not, you may be better off with another solution to deal with your debt.
Step 3 – Attend Credit Counseling
You can’t just decide to declare bankruptcy and file the forms. Filing Chapter 7 bankruptcy requires that you attend a credit counselling course. They want to minimize the chances that you’ll wind up back in the same situation with too much debt again.
Step 4 – Fill Out and File the Required Forms
Next, you need to fill out and file all of the required forms. This can be a bit confusing, and a mistake could result in your case being dismissed, so have a lawyer help with this. List all of your assets and debts, as well as what you’d like to do about secured debts. There’s a filing fee, although you may be able to get this waived or arrange for a payment plan.
Step 5 – Turn in Required Documentation to the Trustee
When you file for Chapter 7 bankruptcy, a trustee will be appointed to oversee your case. This trustee will need documentation to back up the information you provided in your application. Examples of forms you might need include tax returns, bank statements, and paycheck stubs.
Step 6 – Meet With the Trustee
Usually, you’ll need to meet with the court-appointed trustee at least once to go over all of the information you’ve provided and answer any questions the trustee may have. These meetings are usually relatively short. Creditors may be present as well, but that rarely happens.
Step 7 – File Any Motions
You may have objections or need to file other motions relating to your bankruptcy case. You may not agree with a debt that a creditor is claiming, for example. You may be able to get some liens removed in certain situations.
Step 8 – Deal With Secured Debts
Follow through on the plan you made for your secured debts when you filed the paperwork. This could mean returning a car or getting up to date on the payments so you can keep it.
Step 9 – Attend an Education Course
All debtors need to attend an education course before their bankruptcy filing will be discharged. Do this in a timely manner or your bankruptcy may not go through. Use a qualified nonprofit credit counselling agency.
Step 10 – Get Your Discharge in 6 Months
As long as you follow the required steps and are qualified, the process will be completed in about six months. Your Chapter 7 bankruptcy will be complete. The case will be closed.
As you can see, just 10 simple steps can lead to Chapter 7 bankruptcy. The same is true with some other types of bankruptcy.