How to Apply for Bankruptcy
People interested in eliminating their debts through bankruptcy are wise to seek information about the bankruptcy process before plunging in. One common question potential filers have is the steps required to apply for bankruptcy protection.
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Filing for Bankruptcy Protection
The process of filing for bankruptcy protection will vary slightly depending on which chapter of bankruptcy a filer chooses (Chapter 7 or Chapter 13), but here's a general look at the steps involved.
- Speak with a bankruptcy lawyer. While there is no law that requires people to work with an attorney during a bankruptcy case, the United States Courts system strongly recommends that filers enlist a lawyer's help. A lawyer can help a potential filer decide whether bankruptcy is the right choice and which type of bankruptcy is likely to work best.
- Decide which type of protection to file for and determine your eligibility. Chapter 7 bankruptcy and Chapter 13 bankruptcy offer two very different types of protection for those in financial distress and are designed for different scenarios. Again, a bankruptcy lawyer can help a filer make this decision and determine eligibility to file.
- Complete a credit counseling briefing. Since the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, all bankruptcy filers have had to complete a credit counseling briefing in order to be eligible for bankruptcy protection.
- Fill out appropriate forms and file them with the court. This is the step where a lawyer can prove especially useful. The documents potential filers are required to submit to the court (called "petitions" or "schedules") must be filled out precisely, with specific, detailed information about income, assets, obligations and debts. A filer whose information is not complete or correct risks having his case thrown out of court, which means being denied bankruptcy protection. An attorney can help make sure all forms are completed correctly and submitted on time.
When a filer submits this paperwork to the court, her case is filed and she has completed the process of applying for bankruptcy protection. What happens next will depend on which type of bankruptcy she filed for.
To get more information about what to expect when applying for bankruptcy, connect with a local bankruptcy attorney today.