Once you know that Chapter 7 bankruptcy is a good option for your situation, you may be eager to start the process. However, you may have many questions about what the bankruptcy process will look like.
One of the first things you have to do is compile paperwork. The United States Courts say that you have to go to the bankruptcy court and file a petition. This petition serves as the official notice that you are filing for bankruptcy. Once the court receives the petition, debt collectors cannot continue to send requests for payments. Additionally, the court assigns a trustee to your case to oversee the bankruptcy process.
Compile financial information
You usually need to provide your trustee with detailed information about your finances. You should put together the following documentation:
- Breakdown of your monthly income and expenses
- List of your liabilities and assets
- List of your creditors and how much you owe each one
- Copies of your tax returns
Some property, such as your home and your car, may be exempt from your creditors’ claims. You should also put together a list of these exemptions.
Attend credit counseling
One of the requirements of filing for bankruptcy is that you attend credit counseling. During these sessions, a counselor usually reviews your financial situation and helps you determine whether bankruptcy is the right option for you. Once you finish these sessions, you typically receive a completion certificate. The court will likely need to see a copy of this certificate. Additionally, you and the counselor may have put together a debt repayment plan. You should give a copy of this repayment plan to the court. This plan does not lock you into a certain course of action. Instead, it demonstrates that you have considered all aspects of your financial situation.
Once the trustee has all this information, this person can begin to work with your creditors.