What is Filing for Bankruptcy

Filing for bankruptcy is a legal process that either reduces, restructures or eliminates your debts. Filing bankruptcy with a court is the first step. You can file on your own or you can file with an attorney. Bankruptcy costs include attorney fees and filing fees. If you file on your own, you will still be responsible for filing fees.

Steps to File for Bankruptcy

Bankruptcy is not simply a matter of telling a judge “I’m broke” and throwing yourself at the mercy of the court. There is a process, a sometimes confusing, sometimes complicated process, those individuals and businesses must wade through to be successful.

How to File for Bankruptcy

It starts with compiling all your financial records, debts, assets, income, expenses and listing them. This not only gives you a better understanding of your situation, but also gives anyone helping you (and eventually the court) a better understanding.

The next step is to receive credit counseling within 180 days before filing your case. This is required step. You must obtain counseling from an approved provider listed on the United States Courts website. Most counseling agencies offer this service online or over the phone.

The courts want you to do this to make sure you have exhausted all possibilities of finding a different way to handle your problem. It’s important to understand that credit counseling is required. You will receive a certificate of completion from the course and this must be part of the paperwork when you declare bankruptcy, or your filing will be rejected.

Next, you file the petition for bankruptcy. If you haven’t done so at this point, this might be where you realize you need to find a bankruptcy lawyer. Legal counsel is not a requirement for individuals filing for either Chapter 7 or Chapter 13 bankruptcy, but you are taking a serious risk if you choose to represent yourself. For one thing, you may not understand federal or state bankruptcy laws or be aware which laws apply to your case, especially regarding what debts can or can’t be discharged. Judges are not permitted to offer advice and neither is the court employees involved in a case.

There also are many forms to complete and some important differences between Chapter 7 and Chapter 13 that you should be aware of when making decisions. Finally, if you don’t know and follow the proper procedures and rules in court, it could affect the outcome of your case.

When your petition is accepted, your case is assigned to a court trustee, who sets up a meeting with your creditors. You must attend the meeting, but the creditors do not have to be there. This is an opportunity for them to ask you or the court trustee questions about your case.

If you cannot afford to hire an attorney, you may have options for free legal services. If you need help finding a lawyer or locating free legal services, check with the American Bar Association for resources and information.