Home> Credit
Library
How to file for bankruptcy
Just like some people prefer to handle their own credit repair,
some also prefer to handle their own bankruptcy and save the attorney
fees. To see what debts can be discharged
in a bankruptcy click here.
A bankruptcy case is commenced by the filing
of a petition. You must also file a statement of your assets and
liabilities, and schedules listing your creditors. If you choose
to file a bankruptcy
petition without the assistance of an attorney, you can obtain
the required forms at most stationery stores or at www.uscourts.gov/bkforms/index.html.
Article I, Section 8, of the United States Constitution
authorizes Congress to enact "uniform Laws on the subject of
Bankruptcies." Under this grant of authority, Congress enacted
the "Bankruptcy Code" in 1978. The Bankruptcy Code, which
is codified as title 11 of the United States Code, has been amended
several times since its enactment. It is the uniform federal law
that governs all bankruptcy cases.
The procedural aspects of the bankruptcy process are governed
by the Federal Rules of Bankruptcy Procedure (often called the "Bankruptcy
Rules") and local rules of each bankruptcy court. The Bankruptcy
Rules contain a set of official forms for use in bankruptcy cases.
The Bankruptcy Code and Bankruptcy Rules (and local rules) set forth
the formal legal procedures for dealing with the debt problems of
individuals and businesses.
There is a bankruptcy court for each judicial district in the country.
Each state has one or more districts. There are 90 bankruptcy districts
across the country. The bankruptcy courts generally have their own
clerk's offices. Before filing for bankruptcy, we recommend that
you review the changes to the bankruptcy
law. If you have questions about filing for bankruptcy, we recommend
consulting with a licensed
attorney.
A bankruptcy case is commenced by the filing of a petition. You
must also file a statement of your assets and liabilities, and schedules
listing your creditors. If you choose to file a bankruptcy petition
without the assistance of an attorney, you can obtain the required
bankruptcy
forms online. There is a range of filing fees for bankruptcy
cases, depending on the chapter of the bankruptcy code under which
you file. For information on the different chapters of the bankruptcy
code, please visit the Federal Judiciary's section on Bankruptcy
Basics.
Most common bankruptcies filed
Chapter 7, entitled Liquidation, contemplates an orderly,
court-supervised procedure by which a trustee takes over the assets
of the debtor's estate, reduces them to cash, and makes distributions
to creditors, subject to the debtor's right to retain certain exempt
property and the rights of secured creditors. Because there is usually
little or no nonexempt property in most chapter 7 cases, there may
not be an actual liquidation of the debtor's assets. These cases
are called "no-asset cases." A creditor holding an unsecured
claim will get a distribution from the bankruptcy estate only if
the case is an asset case and the creditor files a proof of claim
with the bankruptcy court. In most chapter 7 cases, if the debtor
is an individual, he or she receives a discharge that releases him
or her from personal liability for certain dischargeable debts.
The debtor normally receives a discharge just a few months after
the petition is filed. Amendments to the Bankruptcy Code enacted
in to the Bankruptcy Abuse Prevention and Consumer Protection Act
of 2005 require the application of a "means test" to determine
whether individual consumer debtors qualify for relief under chapter
7. If such a debtor's income is in excess of certain thresholds,
the debtor may not be eligible for chapter 7 relief.
Chapter 13, entitled Adjustment of Debts of an Individual
With Regular Income, is designed for an individual debtor who has
a regular source of income. Chapter 13 is often preferable to chapter
7 because it enables the debtor to keep a valuable asset, such as
a house, and because it allows the debtor to propose a "plan"
to repay creditors over time – usually three to five years.
Chapter 13 is also used by consumer debtors who do not qualify for
chapter 7 relief under the means test. At a confirmation hearing,
the court either approves or disapproves the debtor's repayment
plan, depending on whether it meets the Bankruptcy Code's requirements
for confirmation. Chapter 13 is very different from chapter 7 since
the chapter 13 debtor usually remains in possession of the property
of the estate and makes payments to creditors, through the trustee,
based on the debtor's anticipated income over the life of the plan.
Unlike chapter 7, the debtor does not receive an immediate discharge
of debts. The debtor must complete the payments required under the
plan before the discharge is received. The debtor is protected from
lawsuits, garnishments, and other creditor actions while the plan
is in effect. The discharge is also somewhat broader (i.e., more
debts are eliminated) under chapter 13 than the discharge under
chapter 7.
Bankruptcy cases cannot be filed in state court. Bankruptcy cases
are handled only on a federal level through one of the U.S. Bankruptcy
Courts. For further information about bankruptcies, or a bankruptcy
case, you will need to contact the bankruptcy
court that will handle the bankruptcy.
Bankruptcy case information can also be found online through the
Public Access to Court Electronic Records (PACER)
system. Please note there is a user fee for accessing information
through the PACER system. You may also wish to view information
about finding an attorney.
You can also refer to the bankruptcy
glossary for meaning of bankruptcy terms.
The U.S Government provides some bankruptcy
videos to help educate the public. You may also download our
Bankruptcy
Basics in PDF provided by LawInfo.com
Related:
Your credit after a bankruptcy | Bankruptcy
and your car
Portions of this article has been put together
using resources from the U.S Gov website and Wikipedia. These resources
have been cited because of their usefulness and bipartisan help
for the consumer and the readability of the filing process. Please
do not let this article replace your need for a qualified bankruptcy
attorney. This article, How to File Bankruptcy, is
provided for informational purposes only.
|
