Steps to Filing Bankruptcy
If you have reached the point where, despite your best efforts, you are unable to repay the debts you owe, it may be time to begin the steps to filing bankruptcy. Although it may seem like an overwhelming task, it is actually quite simple. It does have a negative affect on your credit rating, and stays on your credit report for seven to ten years, but it can also serve as a way to eliminate debt and have a fresh start. Because of the negative consequences, the decision to take the steps to filing bankruptcy is not one that should be made lightly, or emotionally. Take time to consider your situation, and then make a well-informed and practical choice.
Following is a list of the steps to filing bankruptcy:
1. Determine if bankruptcy is the appropriate solution for your circumstances. Consider the amount of debt you owe and your income, as well as your future goals. This is a decision that you must make for yourself, but you should consider seeking advice to help you make the most informed decision possible.
2. Determine which type of bankruptcy is best for you. Chapter 7 bankruptcy involves the liquidation of assets to repay outstanding debt. Chapter 13 bankruptcy allows you to keep your assets while restructuring the debt and arranging a repayment plan spread out over three to five years.
3. Consult a bankruptcy attorney or petition preparer. Although it is possible to complete the steps to filing bankruptcy without assistance, you will most likely feel more secure if you have someone looking out for your interests.
4. Gather required information. When submitting a petition, you must provide a list of all of the debts you owe, the name of the creditors, and the types of debt you have. You must also list your assets, including property, and the amount, source, and frequency of your income. Finally, you must provide a detailed list of your monthly expenses, including shelter, food, utilities, clothing, and medication.
5. Submit required paperwork and pay related filing fees. The total cost to file a petition for Chapter 7 bankruptcy is $299. This cost includes the $245 filing fee, $39 administrative fee, and $15 trustee surcharge. The total cost to file a petition for Chapter 13 bankruptcy is $274. This amount is for the $235 filing fee and $39 administrative fee.
6. Attend the meeting of creditors. This is the only formal meeting you are required to attend. This meeting allows the creditors to ask questions about your debt and make sure you have provided accurate information on your petition.
7. Wait for the decision from the courts, and then adhere to any repayment plan that is determined.
Those are the steps to filing bankruptcy. It may seem like a long process, but the end result is a clean slate, relief from overwhelming dept, and a feeling of financial freedom and control. Many people find the end result worth anything that goes into it.