If you are considering filing bankruptcy most people opt for a Chapter 7 bankruptcy or what is known as a liquidation bankruptcy. Bankruptcy is usually commenced by the filing of what is called a "voluntary petition" and the person filing the bankruptcy is referred to as a "debtor" or "petitioner". For the purposes of this article, a Chapter 7 bankruptcy is used.
All debtors are required to file a list of creditors, a schedule of assets and liabilities, a schedule of current income and expenditures, a statement of the debtor's financial affairs, an itemized statement of net monthly income and a statement disclosing any reasonably anticipated increase in income or expenses. This list is not an exhaustive list of what a debtor is required to file but is merely given as a means of identifying some things you will have to furnish to the bankruptcy court. These documents can be quite lengthy and they are filed under penalty of perjury to describe all assets, liabilities, obligations and financial affairs of the debtor as of the date of filing the bankruptcy petition. Failure to provide any information that is required by federal code will result in dismissal of the case.
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If you have decided on filing bankruptcy, you must attend financial counseling from an approved agency six months before filing. You should also decide whether you will represent yourself or retain an attorney. If you feel confident that you understand the basic procedures, you may want to represent yourself. This is called appearing pro se before the court. Perhaps you do not have money for an attorney then representing yourself may be your only option. However, having an attorney relieves you of the pressures of filling out the forms for the petition, the filing of the bankruptcy itself, negotiating with creditors and appearing before the court on your behalf. An attorney can also shelter you from creditors since you can refer creditors to him or her. After retaining an attorney, and after filing your voluntary petition with the bankruptcy court, your creditors are not allowed to contact you or harass you for payment. Nevertheless, you may contact them for instance if you decide to negotiate an agreement that will allow you to keep something such as your car. If you do not think you can afford an attorney, contact a legal aid office in your area and find out if there is an attorney there who can represent you for a reduced fee or perhaps for no fee depending on your circumstances.
Representing yourself can become a quagmire and you may find yourself wishing you had hired an attorney. But if you can get access to the internet, use the following website to find the forms to download that you can use for filing with the court: http://www.uscourts.gov/bkforms/index.html. There you will also find articles which will help with the basics of bankruptcy and the procedures to follow. On that web site is a link to a map which will aid you in finding the court where you must file your bankruptcy. Take time to look over the court's website in your jurisdiction as there may be state laws which affect your bankruptcy which are presented there. There are many sites on the internet which offer forms and advice about bankruptcy and about representing yourself in bankruptcy but the best place to find information for filing your petition is on the web page for the court in your district. Conduct an online search which includes the state and county in which you reside in order to find the court in your district.
Whether or not you decide to retain an attorney, download the forms, answer any of the questions you can. If you have retained an attorney, go over the forms and answers with him/her. During the initial interview with your attorney, it is important that you are as thorough as you can be. There may be terms and questions which you may not understand, such as "exempt property".
Exempt property is property which is protected by law from the trustee or from creditors and can include any property that is owned such as your home, household goods, vehicles, bank accounts, stocks and bonds. After you have filed a Chapter 7 bankruptcy, a trustee is appointed to preside over your assets. A trustee can take any "owned" property which is free and clear of liens and sell it to pay your creditors.
The homestead exemption covers equity in a home, townhouse, condominium, real estate lots and mobile homes just to mention a few. A married couple may have a homestead exemption which is automatic but must be claimed in the bankruptcy schedules. Married couples are also entitled to personal property exemptions for both the husband and wife whereas a single filer is entitled only to one. These exemptions may include household goods such as furnishings, appliances, wearing apparel, musical instruments and vehicles. Your disability benefits are exempted as well as child support and alimony. Whether or not exemptions apply to you should be discussed with your attorney.
The above and foregoing by no means exhausts the topics presented, nor is it intended to be all-inclusive. There is no representation made that this article is either intended to qualify as legal advice or as statement of law. The writer's intention is to suggest areas which should be discussed with an attorney.
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