Steps for Filing

With bankruptcy reform in recent years, those who need to know may wonder what the exact steps for filing bankruptcy currently are in the United States. This article will help you learn exactly how to proceed should you find your finances require this major, drastic solution.

Step One: Be Sure There Is No Other Solution

Following the steps for filing bankruptcy is the final option to resolving financial difficulties. In recent years, it has become more difficult to qualify for bankruptcy and before filing a person must seek consumer credit counseling from a counseling agency approved by the U.S. Trustee within 180 days of filing their bankruptcy court case. The idea is to find creative ways to solve money matters without resorting to bankruptcy. However, sometimes there simply isn't a better solution but the U.S. Bankruptcy Abuse Prevention and Consumer Protection Act, sometimes called BAPCPA, requires that other solutions be sought before resorting to bankruptcy filing.

If the credit counseling reveals that you can adhere to a strict budget and repay all your debts within a few years, it is the best solution available. Filing bankruptcy places a mark on your record that follows you for a long, long time and paying back the debts will help you return to having a clear conscious and improve your self esteem.

Step Two: Review and Compare Bankruptcy Types

There are commonly two types of bankruptcy, each of which have similar steps for filing bankruptcy but are still much different. Chapter 7, the liquidation bankruptcy which is sometimes referred to as the straight type, is the most popular. The other type is Chapter 13, which has a repayment plan for some of the debt in most cases where individuals file bankruptcy. The BAPCPA law made changes to Chapter 7 so that a person must qualify via a means test in order to file so many people must resort to filing their case under Chapter 13.

Call 866-200-8196 toll-free or complete the following confidential case evaluation and speak with an experienced attorney for free:

Step Three: Review Filing Options

Many people think they can follow the steps to file bankruptcy without seeking the advice of an attorney and in a few cases this is true. Smart people in financial trouble, however, seek the advice of a bankruptcy attorney or at least consult with a paralegal before making any moves toward filing their court case. Sure, you can do your homework and cut legal expenses but you really need to find a legal firm which can provide you with a consultation with a lawyer even if you do most of the actual paperwork with the paralegal associated with the firm.

Step Four: Meet Your Legal Counsel and Learn About Costs

Meet with your lawyer and review your records, asking all questions you may have including the cost associated with filing bankruptcy. Your counsel should help you with the means test. You want to ask if the fee charged is flat or varied and, if varied, what the fee is based upon. Ask about payments and whether you must pay up-front or can work out a payment plan after paying a retainer.

Step Five: Meeting of Creditors

After your legal counsel submits your bankruptcy petition, you'll learn the date on which the creditors will meet. This is known as a 341 meeting after the section of law requiring the meeting. The trustee wants to ensure you have been truthful about your petition for filing bankruptcy and that you understand what bankruptcy means for you.

Step Six: Never Pay With Credit Card after Intending To File Bankruptcy

Don't pay your attorney, any fees, or anything else during the period in which you are following the steps for filing bankruptcy. If you do, the creditors can and probably will challenge your right to file because you incurred debt with the knowledge you couldn't pay it back.

Step Seven: Asset Discharge or Payment Plan Development

If you file under Chapter 7, the trustee must determine whether assets can be sold to repay creditors. In these cases, assets must be liquidated and the proceeds used properly. If you are filing under Chapter 13, you must agree to a plan to repay creditors over time which meets the BAPCPA means test.

Step Eight: Creditor Deadline

After 60 days from the first date established for the meeting of creditors, the deadline for creditors to file lawsuits to challenge your right to discharge debt owed them or your entire bankruptcy passes. If no lawsuits are filed, you will soon receive notification of debt discharge in a Chapter 7. In Chapter 13, you will be notified about 30 to 60 days after making the final payment in your repayment plan that your debt has been discharged.