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How To File For Bankruptcy

How To File For Bankruptcy

Bankruptcy is a legal process and its goal is to eliminate all outstanding debt or to reorganize the debt in a manner which allows the borrower to repay loans under court provided terms. Which type of bankruptcy you choose will depend on your current financial situation and obligations and whether or not you meet the requirements under law. The options available for bankruptcy are Chapter 7 and Chapter 13 and while their implementation may be slightly different their basis for filing is similar.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was passed to make it more difficult to qualify for personal bankruptcy. Many consumers were abusing the system by racking up tens of thousands of dollars in credit card debt and and filing Chapter 7 bankruptcy to keep everything they bought. The new law forces more debtors to file Chapter 13 bankruptcy and to make the process in general more difficult. Before filing for bankruptcy you will need to determine which one is best for you. Normally a lawyer handles the filing but nothing prevents individuals from researching and filing bankruptcy paperwork on their own.

Which type of bankruptcy you choose will be determined by your financial resources and ability to repay the outstanding debt. Chapter 7 bankruptcy has no maximum debt restriction so everyone qualifies but that doesn't mean they will be allowed to file. Chapter 13 bankruptcy requires consumers to create a budget for outstanding creditors to determine whether or not debt repayment is feasible. If you choose and qualify for a Chapter 7 straight bankruptcy will need to obtain all legal documents required as well as a guide to assist in the process. To answer the question of how to file for bankruptcy is that it will require significant research and preparation on your part.

In order for the court to wipe your financial slate clean it will need to know who all of your creditors are what amounts are owed. The information required will be the name and address of the creditor or collection agency, when the debt was incurred, the total amount owed, the claim basis and relevant account number and any additional contact information such as for a co-debtor.

Step two is to gather together all of your personal information to fill out the necessary legal paperwork. This will require the basics like your name, address, phone number, Social Security number and age. The same information will be required for your spouse as they may be responsible for the debt and its repayment. More specific information include listing bankruptcies, where and when they were filed and there case numbers. All sources of income must also be specified to determine possible repayment qualifications. A list of creditors who received payment 90 days prior to filing and on debt more than $600. A list of suits, garnishments and other legal judgments. Foreclosures or repossessions within 12 months or less of filing for bankruptcy. Keep in mind this is not an exhaustive list of requirements for how to file for bankruptcy.

In reality the best thing to do is to consult with an experienced attorney in your area if you are looking to file for bankruptcy. They will fulfill all legal requirements and provide all necessary information when filing. They will also be able to determine which type of bankruptcy is appropriate for your financial situation. Be prepared to file the paperwork and show up at court on the specified date to state your case. Most times the bankruptcy is approved except in cases where it is felt the debtor has the ability to repay the outstanding obligations or is using the court system to commit fraud. It is possible to be denied personal bankruptcy but the more prepared you are the more likely you will be successful to wipe away excess debt. This article should not be construed as legal advice and is not represented as such.

Image by: Mark Crossfield