Before filing for bankruptcy, make sure that you have considered all other alternatives, because a bankruptcy filing will remain on your credit file for ten years. Filing
bankruptcy is can vary differently from state to state but there are some basic steps that usually must be followed in all states.
You must first decide on which type of bankruptcy you want to file. The most popular bankruptcy is a chapter 7, which is a straight or liquidation bankruptcy. There is also a chapter 13 bankruptcy, which involves a repayment plan for individuals.
Then, you must get credit counseling from a government approved organization within six months before you file for any bankruptcy relief. You can find a state by state list of government approved organizations at www.usdoj.gov/ust.
Next, you will want to decide whether or not to hire a lawyer or file the bankruptcy yourself. We highly recommend hiring a lawyer, because once your lawyer has filed your case, a automatic stay goes into effect, and no creditors will be contacting you about your debt. Your lawyer will be speaking to the creditors on your behalf. A attorney can also make sure that the documentation is filed properly and that you have not missed any debts or assets that should or will be included.
Once you have obtained a lawyer, You will need to gather a listing of all of your income and assets. This includes all income, large financial transactions and any property or assets you own. You also need to list all of your living expenses (usually one month's worth) and all of your debts. You will also need documentation, such as tax returns.
A trustee will be assigned to your bankruptcy case after you file and the court will assume legal control of your debts and property. The trustee will also review the paperwork you submitted and may question you if they find it incorrect or improper.
Finally, there will be a meeting of creditors, a couple months after filing for bankruptcy, which you will be required to attend. If any of the creditors object, there will be a negotiation between you or your attorney and the creditor. The judge will make a decision on any matters that are not decided in a negotiation.