If you are making a bankruptcy claim, there are a number of important things that go into planning. You need to first find legal help from an experienced bankruptcy attorney. Once you have an attorney, you need to decide what type of bankruptcy is best for you. You then need to assemble and list the relevant information and file the appropriate forms with the court. There are many steps that go into filing a bankruptcy claim, so having a solid plan is key to success.
Choosing the Type of Bankruptcy
The first step to filing any bankruptcy is getting legal help. Once you have found an experienced bankruptcy attorney, you and your attorney will need to decide which type of bankruptcy is right for you:
- Chapter 7 bankruptcy is available only to those who make less than the median income in their state, or to those who pass a means test demonstrating they don't have the money to pay back their debt and still have a reasonable standard of living. With Chapter 7 bankruptcy, all non-exempt assets are seized and sold to pay back creditors. Any remaining unpaid debts, with the exception of exempt debts such as student loans and tax debt, are forgiven.
- Chapter 13 bankruptcy is available to those with more income and assets. When you declare Chapter 13 bankruptcy, your debts are not just forgiven, and you get to keep your assets. You list your creditors and a payment plan is put together in which you pay back some or all of your debts over a period of three to five years.
Listing Your Creditors
Once you have determined the appropriate type of bankruptcy, you must list all of the creditors that you want included in the bankruptcy. Each creditor must be notified and failure to list a creditor for notification can result in that creditor not being included in your bankruptcy. Bankruptcy protection is available for most types of unsecured debt including:
- Credit card debt
- Medical bills
- Unsecured personal loans
Student loans and tax debt are not forgiven under bankruptcy, nor is child support or alimony obligations.
If you are filing a chapter seven bankruptcy, then once you have listed your creditors, you also need to list assets. If you are declaring Chapter 13, once you have listed creditors, you need to establish a proposed payment plan. Documents must then be filed with the court, who will have to approve your petition for bankruptcy.
Getting Legal Help
Your bankruptcy attorney can assist you with following the proper process and filling out all court forms and documents. Acting as your advocate throughout the process, your attorney will answer any questions you have and will take care of filing all appropriate papers with the court so your bankruptcy can go smoothly.
