How to File Bankruptcy without Lawyer ? : Chapter 7 &13

How to File for Bankruptcy ?

In bankruptcy court, you might tell the judge that you are unable to pay your obligations. The court considers your income, your obligations, and your assets (i.e., the individuals you owe money to) to decide if you can pay back your creditors. The court may decide to dismiss your debts or may create a plan for you to pay back some or all of the money, depending on your circumstances.

Although filing for bankruptcy may stop the bank from foreclosing on your home, the repo guy from taking your car, and creditors from withholding money from your salary, it won’t stop all of your troubles. First of all, filing for bankruptcy does not necessarily mean that your obligations will be forgiven. Here’s a guide for how to file for bankruptcy:

1. Collect and Prepare Your Paperwork

The first thing you need to do is determine your financial status. If there was ever a time to get prepared, this is it as the bankruptcy process will focus heavily on your financial situation. You’ll require the following paperwork to bolster your argument:

1. Two years’ worth of tax returns
2. Paystubs or other evidence of your earnings from the last six months
3. Most recent bank statements
4. Recent statements from a brokerage account or retirement account
5. Assessments or values for any real estate you own
6. Copies of your vehicle’s registration any other records pertaining to your possessions, obligations, or earnings.

2. Enroll in a credit counseling course

Every person who files for bankruptcy must finish a credit counseling program that has been approved by the Department of Justice. You will speak with a representative from a credit counseling firm during this course about your finances to ascertain whether declaring bankruptcy is indeed the best course of action. Since, as we previously indicated, there may be alternative options that may help you and your family recover from your financial issues more quickly than declaring bankruptcy, you want to make sure you’re selecting the best course of action for you and your family.

The credit counseling course can be enrolled in online or over the phone, and it usually lasts an hour. Depending on where you enroll, the cost of the course varies, but if your income isn’t enough to afford it, you might be able to negotiate a reduced or free tuition. When you finish the course, save your completion certificate; you’ll need it when you file.

3. Complete the Bankruptcy Forms

The bankruptcy forms are around 70 pages long and consist of at least 23 separate forms. On the bankruptcy form, you are questioned about everything you make, spend, own, and owe. There will also be a few bankruptcy essentials covered, such as the type of bankruptcy you are filing for and if an attorney is representing you. Utilizing the information you give their office, the lawyer you retain will complete the paperwork on your behalf.

4. Make Sure that you have the filing fee.

Declaring bankruptcy is not cheap. Along with paying the professional costs, you must also pay a fee to file for bankruptcy. filing for Chapter 13 bankruptcy costs $310, whereas Chapter 7 bankruptcy costs $335. 2,3 The court must receive this payment in person, and it must be given in exact change. If you don’t have enough money, you can ask for a payment plan (up to four installments over 120 days) to stretch out your filing fee. If money is really an issue, you can alternatively submit a form requesting for the fee to be waived.

5. Print the Bankruptcy Documents

Remember that the court is pickier than an English professor at a college when you print out your bankruptcy documents. Important rule: Your forms must be single-sided in order to be accepted by the court (and that would mean more work for you and a lot of wasted paper).

The petition, which is part of the bankruptcy paperwork that establishes your inability to pay back your debts, is typically only required in a single copy by the court. However, some courts require up to four copies. So, to confirm the precise number to print out, you need to contact your local bankruptcy court. You should also make a copy for your own records, of course. Once your paperwork has been produced, sign them so that you’re prepared for the following stage.

6. Visit the Court to File Your Bankruptcy Forms

Security guards will greet you and ask you to walk through a metal detector as soon as you enter your local courtroom. Proceed to the clerk’s office after passing through security and let the clerk know you want to file for bankruptcy there. They will also collect your bankruptcy documents and filing money (or your request for a waiver or to pay the filing charge in installments).

Don’t hand up your bank or tax records to the court. The trustee receives these papers upon the filing of the complaint. See Step 7 below for further details on it. While you wait, the clerk processes your case by scanning your paperwork and uploading them to the court’s online filing system. Normally, this takes no longer than 15 minutes.

7. Submit Documentation to the Bankruptcy Trustee

You must identify your bankruptcy trustee after filing. A bankruptcy trustee is a person that the court has appointed to manage your case. They are not always attorneys, although occasionally they are. Your trustee-specific documents, such as tax returns, pay stubs, and bank accounts, will be requested. Please read your letters attentively and adhere to the trustee’s directions exactly if you want your debts forgiven.

8. Visit Your Trustee 

You’ll meet with your bankruptcy trustee during the meeting of creditors, commonly known as the 341 meetings because it refers to Section 341 of the bankruptcy code, to make sure you didn’t forget to include any crucial information in your paperwork, such as unmentioned debts or assets. The trustee’s responsibility is to ensure that your case is handled correctly and that your creditors receive the most money feasible. You are still sworn to secrecy despite the fact that this meeting doesn’t take place in a courtroom. Hence, be truthful and inform the trustee of any adjustments you need to make to your bankruptcy file. The last thing you want to appear to be doing is concealing something.

The good news is that it may only take a few minutes and be very straightforward. The meeting of creditors may be the only time you actually have to speak with someone about your case if you file for Chapter 7 bankruptcy because you most likely won’t have to appear in court at all.

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9. Complete the Debtor Education Program.

Another bankruptcy course, called the debtor education course, must be finished while your case is being processed. You don’t want to experience bankruptcy even once, much less several times. The debtor education course aims to teach you how to go forward with more informed financial decisions. The debtor education course costs the same as the credit counseling course, but it typically lasts at least two hours. Keep in mind that if you want your debts forgiven, you must finish this course.

10. Finish Filing for Bankruptcy

You’re nearly finished! But, there are still a few steps that must be taken, and they vary depending on the form of bankruptcy you filed before your case is resolved. When your trustee sells your nonexempt assets—those are the ones that were authorized to be sold when you filed for Chapter 7 bankruptcy—and settles your obligations with your creditors, your debts will be paid in full. Before your debts may be discharged if you filed a Chapter 13 bankruptcy, you must finish the payment plan and guarantee that all of your creditors receive their money. Your case can be dismissed, leaving you starting over if you fall behind on payments or don’t follow the plan.

How to File Bankruptcy Chapter 7 ?

The most common kind of bankruptcy is Chapter 7, which permits you to discharge all of your unsecured debts. If you own any nonexempt assets, such as family heirlooms (highly valued collections, such as coin or stamp collections), second houses, or investments such as stocks or bonds, you must sell the property to pay off some or all of their unsecured debts.

You essentially liquidate your assets to pay off debt when you file for Chapter 7 bankruptcy. Those with no valuable assets and only exempt property (such as necessities of life, trade tools, and vehicles up to a specific value) may be discharged from all of their unsecured debt. Here is how to file for bankruptcy Chapter 7:

1. Analyze Your Debt

Chapter 7 does not eliminate all debts. You can “discharge” or get rid of various debts under Chapter 7 bankruptcy, including the following:

• credit card balances
• medical bills
• electric, gas, cable, and phone bills
• personal and payday loans
• apartment and car leases, and
• gym memberships and other dues.

2. Make a list of your exemptions

What you can safeguard if you file for Chapter 7 bankruptcy is specified by exemption laws. The following is something most individuals can hold onto:

• household furniture and appliances
• bedding and kitchenware
• clothing and prescribed medical devices
• some tools needed for your business
• ERISA-qualified retirement accounts, and
• some equity in a car and home.

3. Verify Your Eligibility

You must take and pass the Chapter 7 means test unless the majority of your debt is from a business enterprise or you are a qualified member of the military. Here’s what you’ll do:

• multiply your gross income from the six months prior to filing by two.
• The data can be found on the website of the U.S. Trustee Program; compare it to the average gross income in your state for a family of your size.

You will be eligible if your gross income is that much or less. You will have another opportunity to deduct allowable expenses from your income if you don’t pass. The person won’t be qualified and will need to look to Chapter 13 for debt relief if there is enough left over to pay a sizable sum to your creditors. You’ll be eligible for Chapter 7 if no assets are left for creditors.

Before filing or, in extremely rare circumstances, shortly after, people who are filing for Chapter 7 bankruptcy must finish a course. The course can be taken over the phone or online up to 180 days before you file for bankruptcy.

4. Complete and submit the Chapter 7 bankruptcy paperwork

On Chapter 7 bankruptcy paperwork, you’ll provide the court with information on your assets, liabilities, income, expenses, and more. By the time you’re done, you’ll have revealed all relevant information regarding your current and previous financial situation, including whether you wish to keep your car, home, and other secured property or give it back to the lender. Also, you must reveal real estate transactions that happened up to ten years before your lawsuit.

Once the full bankruptcy documents are filed, your case will begin (the “petition”). You can use the emergency filing process if you’re pressed for time because it involves fewer forms because a bankruptcy file can be as long as 60 pages. The bankruptcy court will dismiss your case if the final forms aren’t submitted within 14 days.

5. File paperwork with the Chapter 7 bankruptcy trustee.

By supplying financial records to the Chapter 7 trustee assigned to your case, you will demonstrate the veracity of the material in your bankruptcy petition. Read about the financial records required for proof of bankruptcy to learn why the trustee will require bank statements, pay stubs, profit and loss statements, tax returns, and more.

6. Consult the Chapter 7 bankruptcy trustee

The trustee will verify identification and inquire about your financial affairs at the 341 meeting of creditors in Chapter 7 bankruptcy (although your attorney may do so if it’s a virtual meeting). Although they are permitted to attend, creditors rarely do. The virtual meetings necessary for social distance, however, are less expensive to attend than in-person meetings, thus creditor attendance has increased.

7. File necessary motions and objections

You will address these issues before your bankruptcy case is finished if you wish to challenge a creditor’s claim against your case or want to get liens removed in Chapter 7. Most of the time, motions are not required, and if you neglect to deal with a lien, the court will probably allow you to reopen your bankruptcy case in the future.

8. Complete a Debtor Education Course

You must complete the second “debtor education” course before receiving an order for a discharge that will erase your debt. The court will dismiss your case without awarding a discharge if you fail to present your certificate by the deadline. Because you’ll probably need to file a motion and shell out yet another bankruptcy filing fee, fixing this issue might get pricey.

How to File Bankruptcy Chapter 13 ?

1. Make sure Chapter 13 is the best choice.

Most people opt for either Chapter 7 or Chapter 13 bankruptcy. Both offer special qualities that aid filers in resolving specific issues. For instance, you can make up missed mortgage or auto loan payments in a Chapter 13 bankruptcy, preventing the foreclosure or repossession of your home or vehicle. There is no equivalent choice for Chapter 7 bankruptcy. Find out when Chapter 13 bankruptcy is preferable to Chapter 7 bankruptcy for additional information.

2. Assess Your Debt

You may not be qualified if your debt load is too high. There are restrictions on how much debt you can have under Chapter 13. In addition, some debts, like recent tax debt, mortgage arrears, and domestic support obligations, must be fully paid off throughout the three to five-year repayment period. You might be unable to put out a workable plan if you are unable to generate the necessary income. Check to see if you qualify for Chapter 13 bankruptcy.

3. Add Value to Your House

Knowing how much property you own and how much of it can be protected by bankruptcy exemptions will be necessary before you file. All of your possessions are yours to retain, but you must pay some creditors a sum equal to the value of your nonexempt possessions. The value of the nonexempt property will be taken into account when calculating your Chapter 13 bankruptcy plan payment.

4. Establish Your Income

Your income must be sufficient to pay for your monthly living expenses, the obligations that the plan must settle, as well as the cost of any nonexempt property that you choose to preserve. If you don’t have enough money, the court won’t allow you to continue. Study up on your bankruptcy plan duties in Chapter 13.

5. File the necessary paperwork for bankruptcy.

If filing for bankruptcy is the best option for you, the next step is to fill out the appropriate paperwork and create a repayment strategy. Find out more about filling out bankruptcy forms.

6. Complete the Mandatory Pre-filing Course

A credit counseling course must be completed by those who plan to file for bankruptcy before the case may be started. After finished, you’ll get a certificate that you should include in your bankruptcy petition. Learn more about the debtor education and credit counseling requirements for bankruptcy.

7. Submit Your Documents and Payment

Once everything has been verified and is prepared, you should file your forms, and certificate, and plan with the bankruptcy court to start the procedure. You must also pay the filing fee for bankruptcy.

8. Give the Trustee documentation demonstrating your income and other assets.

The trustee will compare the information you submit in your formal documents to tax returns, bank statements, pay stubs, and other documents you’ll present after you file. The portion of the bankruptcy code that contains the necessity for financial papers is known as 521 and is where these items get their name.

9. Attend at Least Two Hearings

After filing, you’ll attend the “341 meeting of creditors,” where you’ll meet with the Chapter 13 bankruptcy trustee chosen to handle your case. A 341 meeting of creditors must be attended by every filer. Your identification, official documents, repayment schedule, and supporting 521 documentation will all be examined by the trustee during the meeting. Although they are permitted to come and ask questions, creditors rarely do.

Immediately following this meeting, you or your legal representative will be required to attend a confirmation hearing when the bankruptcy court will choose whether to “confirm” or approve your plan. Prior to that, a creditor has the option to oppose by submitting a judicial opposition. The judge will determine whether to confirm the proposal after reading any written objections and taking into account any justifications made during the hearing. Find out more information about hearings and other bankruptcy processes.

10. Pay Your Payments

Within 30 days of receiving your repayment plan, you must begin making payments. The court will dismiss your lawsuit if you fail to make payments.

11. Take the Course on Post-filing

You must enroll in the “debtor education” course, which is the second necessary class, before finishing your repayment plan. Before the court discharges any outstanding debt sums that qualify for a debt “discharge,” you must submit this certificate.

12. Get Your Discharge from Bankruptcy

You’ll receive your bankruptcy discharge once you’ve finished your plan. Although some unsecured debts, such as the outstanding sums on student loans, won’t be automatically discharged, the discharge releases you from the duty to pay any unpaid balance on eligible unsecured obligations. Find more about debts forgiven at the conclusion of a Chapter 13 lawsuit.

If you’ve paid the sum specified in the plan and complied with all other conditions, congratulations are in order.

FAQ : How to File Bankruptcy

3. How to File Bankruptcy without a Lawyer ?

• Consider your debt. Do you need to file for bankruptcy?
• Take a course on avoiding bankruptcy.
• Pick the bankruptcy filing option that is most suitable for you. It could be challenging to complete this on your own. If you choose poorly and subsequently decide to switch from Chapter 13 bankruptcy to Chapter 7 bankruptcy, it could be because you didn’t completely comprehend the distinctions.
• Establish the exemptions for your property. Having assistance with this is also really helpful. Giving up a resource when you don’t have to is the last thing you want to do.
• Pay off or reassure your debts. This can include submitting numerous motions to the court.
• Complete and submit the forms. These must be correctly completed notwithstanding their potential for confusion.
• Pay the filing fee or apply for a fee exemption.
• Verify your eligibility. You must complete a means exam for Chapters 7 and 13. If you complete these forms independently and make mistakes, you risk being disqualified from filing. Attorneys are knowledgeable about the requirements and can aid in your eligibility.
• Get a trustee for bankruptcy. You deliver your forms to this person. The trustee is merely an administrator and is not your advocate.
• Attend both a confirmation hearing and a meeting of creditors. You must present your case to the court and your creditors on your own if you don’t have a lawyer.
• finish the debtor education program.
• Get your release.

4. How long does bankruptcy last?

An individual’s credit may suffer after filing for bankruptcy, and the effects may persist for years. While a Chapter 13 bankruptcy typically remains on credit reports for seven years from the filing date, a Chapter 7 bankruptcy may stay on reports for up to ten years.

5. What are the drawbacks of bankruptcy filing?

Your future financial situation may be impacted by bankruptcy, which can stay on your credit report for 7–10 years. Your ability to obtain a mortgage or vehicle loan may be temporarily hampered if you file for bankruptcy. Not every loan will be erased.

6. What are the 3 items that you cannot declare bankruptcy over?

• Alimony and child support.
• Certain unpaid taxes, such as tax liens. …
• Debts for willful and malicious injury to another person or property.

7. What occurs when someone files for bankruptcy?

Owners are released from obligations that have not been fully fulfilled to creditors. The process for filing for bankruptcy differs by nation. If you declare bankruptcy in the USA, it will likely negatively affect your credit rating, making it more difficult for you to obtain a new loan if you want to start over.

Final Thoughts

There are drawbacks to filing for bankruptcy, but it might help you start over financially by wiping out unmanageable debt. If you have a bankruptcy on your credit history, it may be harder for you to receive loans in the future and hurt your credit score.

Consider all of your debt-reduction options before declaring bankruptcy, including a debt consolidation program and renegotiating your loan conditions with your lender. Think about speaking with a qualified financial counselor who can analyze all your options and walk you through how they would operate in your particular financial circumstances.