How To File Bankruptcy
How to file bankruptcy is a common question among debt-ridden individuals. The answer lies largely in the type of bankruptcy Chapter that you are filing under. A Chapter 7 and Chapter 13 are the most commonly filed consumer bankruptcy Chapters. For the most part, filing bankruptcy requires a substantial amount of paperwork to be submitted to the bankruptcy court. Although this may seem like an administrative process, it is important to keep in mind that filing bankruptcy is indeed a legal process. Each financial situation is different and how to file your bankruptcy case may differ. In this article, our professionals provide a very basic guideline on how to file bankruptcy.
2005 Bankruptcy Act Credit Counseling:
All debtors (Chapter 7 & Chapter 13) who declare bankruptcy are required to attend a credit counseling within six months before filing for relief. Furthermore, you will also be required to part-take in an instructional financial management course after you filed your case. If you do not fulfill this part of the bankruptcy process, your bankruptcy petition will not be approved.
2005 Bankruptcy Act Means Test:
The 2005 Bankruptcy Means Test Act is an analysis of your income. It will determine your eligibility to file either you Chapter 7 bankruptcy or a Chapter 13 bankruptcy. The Court will compare your average income for six months before you have filed your case against average median income for the state in which you reside. If your average income is less than the median, then you are eligible to file a Chapter 7. However, if your income exceeds the median, additional parts of the means test will be exercised to determine if you may still file for Chapter 7, or if a Chapter 13 is your only option.
In order to file for bankruptcy, the following documents must be provided as proof of your current financial status:
- Current income sources. Any funds that been received in the past six months and also any money that you may receive in the future, how frequently you will receive this money and the source of the income must be disclosed. Your income may consist of interest and dividends from investments, regular working income, income from side jobs, and unemployment compensation. You are also required to declare any funds provided by family or friends that contribute to the household income. Income from Social Security may not be included.
- Monthly living expenses. Include total amount spent per month for rent, utilities, medical expenses food, clothing, taxes, child support, alimony and child support. When calculating variable monthly expenses, an average based on the past year’s monthly bills is acceptable.
- Secured and unsecured debt. When you are providing information pertaining to your debts, include the current balance, the name of the creditor, the monthly payment towards the debt, as well as any other information relating the to the debt.
- Assets and property. Include anything valuable such as savings accounts, real estate, stocks, motor vehicles, collectibles and art. You can also include items such as clothing and other personal possessions, particularly if it is of value. Personal possessions are generally safeguarded by state and federal bankruptcy exemptions. It is recommended consult with an experienced bankruptcy attorney to determine what property is exempt.
- Major financial activities for the past two years. This includes major purchases and sales.
- Tax returns for the past two years. The Court may also accept transcripts of tax returns.
As mentioned previously, this is simply a basic guideline on how to file bankruptcy. Our experienced bankruptcy attorneys at ZocLaw.com will be able to provide comprehensive information on how to file bankruptcy. Schedule your free initial consultation today.