How to Claim Bankruptcy? Here is how in easy steps

June 21, 2010 - PRLog -- Bankruptcy Credit Counseling: Under the Bankruptcy misuse Prevention and Consumer Protection Act of 2005, any individual filing for bankruptcy has to get credit counseling from an approved counseling attorney within 180 days of filing bankruptcy. However, why not seek counseling before you ever file for bankruptcy? Your counselors can explain the alternatives to bankruptcy that are open to you, even possibly prescribe a plan to avoid bankruptcy altogether. In adding, when you go to bankruptcy court, you will be able to display that you have tried in good faith to handle your debt circumstances on your own. Lastly, they will be able to ensure that the debt for which you intend to file bankruptcy as a result of its debt that can actually be discharged; debt such as student loans, domestic support (e.g. child support, alimony), past due taxes, etc. cannot be discharged.

Legal assistance: While you can file bankruptcy on your personal, it is wise to use a bankruptcy attorney. He will be able to explain the different types of bankruptcy and how they affect you, helping you to choose the right form of bankruptcy for your financial situation. Further, when you file bankruptcy, you have to have a certain amount of income (there is a maximum), and your debt has to be comprised of specific elements. An attorney can explain the current statutes and help you navigate the process.


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Choosing a Chapter:  With your attorney’s assistance, you can select a chapter under which to file your bankruptcy claim. While there are a number of types of bankruptcy, consumer bankruptcy most usually falls under Chapter 7 (a complete liquidation of assets) or Chapter 13 (a debt refund plan and you get to keep most assets).

List of Debt & Properties: Next, you will have to prepare a list of all your debts (amount, creditor, reason, etc.) and all your assets (including their age and condition). Any debt that is left off your list will not be included in your bankruptcy claim and you will still be liable for it. Further, any asset that is left off could be construed as you trying to evade the system. As such, be precise.

341 MEETING: The list of debts and assets that you prepare will be presented to your creditors at a “341 meeting.” At this meeting, all your creditors will be present and they will ask you questions while you are under oath in order to determine the true nature of your financial position.

COURT: After the meeting the Court will decide how your assets will be sold and how the proceeds from that sale will be distributed amongst creditors.

DISCHARGE OF DEBT: If no creditor challenges the Court’s decision, within 60 days of that decision, your debt will be discharged. You will receive notice to this effect shortly after the 60 mark has passed.

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