If you've decided filing for bankruptcy is the most pratical option for you, then you will need to determine which chapter of bankruptcy to file. The two most common forms of bankruptcy cases for individual debtors are Chapter 7 and Chapter 13.
Under Chapter 7, you liquidate your assets and use the funds to eliminate all debt. In this chapter, you will lose property, including your house and possibly your vehicle(s).
Chapter 13, however, allows you to exempt or keep certain property. You can set up a repayment plan through the court and consolidate debts into a single source. Chapter 13 is often selected as a means of stopping foreclosure, preventing wage garnishments and similar proceedings.
Initiating the Filing Process
Though it is possible to file bankruptcy on your own without the assistance of a bankruptcy lawyer, it is not advisable, as the process is complex, and detailed documentation is required not only for qualifying, but for presenting your case in federal bankruptcy court. The success rate of cases filed without legal representation is quite low, which is the reason most individuals choose to hire a bankruptcy attorney.
If you believe bankruptcy is the appropriate course of action to resolve your debt issues, contacting a bankruptcy lawyer is the first step in initiating the filing process. Most lawyers who handle bankruptcy cases will offer a no cost consultation during which bankruptcy options will be discussed and your specific financial circumstances will be examined.
After the consultation, you will be required to pay the mandated fees for filing. At this time, most attorneys will also require you to pay at least one half of their fees for handling your case as well. Federal filing fees amount to $306.00 for Chapter 7 and $281.00 for Chapter 13. In some instances, fees can be waived under Chapter 7 and an attorney can assist in determining your eligibility for a fee waiver. Attorney fees for handling your case can vary.
The Means Test
Following the initial consultation meeting with the bankruptcy attorney, you will fill out forms detailing your personal property, income, assets and expenses, including lines of credit, mortgages, liens, utility bills and others. These forms are used in completing the means test. The means test is the manner in which the court determines if you meet eligibility requirements for filing bankruptcy. This documentation, in addition to other financial records, is also used to determine repayment plan details if you file Chapter 13.
Formal Filing Procedures
Regardless of whether you’re filing Chapter 7 or Chapter 13, the process will be basically the same. Once you have completed and submitted your accounting forms to the lawyer and paid any required fees, your bankruptcy attorney will submit all of the necessary documentation to the U.S. bankruptcy court, officially beginning your case.
Credit Counseling Requirements
At this time, you will also be required to complete a credit counseling course from an approved provider. Your attorney will assist you in finding an approved course and may also be able to help you find one at little to no cost, though most courses are available for a minimal fee.
Documentation of your completion of the course is required as part of your federal bankruptcy case. Failure to complete an approved course within the prescribed timeframe, or to provide proof of completion, can result in your case being dismissed.
Courses can be taken locally as an individual or as part of a group. There are also teleconferences, online courses and other convenient methods for completing the credit counseling requirements and your attorney can provide further guidance on your options.
Your case will be reviewed by a bankruptcy judge who will decide if you meet eligibility requirements and will determine what debt may be included in the bankruptcy. The judge will also decide the repayment plan schedule and monthly payment amount if you are filing Chapter 13. Most people don’t have much contact, if any at all, with the bankruptcy judge. The majority of the interaction which occurs during a case disposition is handled by a bankruptcy attorney.
Most Chapter 7 filers never appear in court, unless an objection is raised by one of the creditors owed. Those filing Chapter 13 typically only appear in court for a confirmation hearing establishing the repayment plan for paying off creditors.
In Chapter 7 and Chapter 13 cases, debtors must attend the meeting of creditors, which is an appointment that often takes place at the U.S. Trustee’s. Failure to appear at this meeting will result in your case being dismissed. Your bankruptcy attorney can appear at this meeting with you and will provide guidance on what to expect as well as what to do when there.
Post Filing Debtor Education
After your case has been reviewed but before it can be finalized, you will be required to complete a debtor’s education course from an approved provider. Again, there are several options available for completing the class and your bankruptcy attorney can assist you in finding a course. A fee is charged, but may be waived under some circumstances, and documentation of the completed course is required in your formal bankruptcy records.
Hiring a Bankruptcy Attorney
If you are looking to initiate the process of filing for bankruptcy, be sure to contact a bankruptcy attorney. For a free evaluation of your bankruptcy claim, fill out the free evaluation form located on this site.