How to File & Declare Bankruptcy

Filing bankruptcy is a serious action with long-term financial consequences. In order to file bankruptcy successfully you must observe federal and state bankruptcy laws and regulations, whether or not you use the services of an attorney. By preparing an accurate, thorough and honest petition and submitting it to the court, you are both filing and declaring bankruptcy. While bankruptcy is a public record, most people will not know you filed bankruptcy unless you tell them directly.

Review information on various bankruptcy chapters. Chapter 7 and Chapter 13 of the bankruptcy code are both commonly used by debtors to discharge debt, but they have very different characteristics. Generally speaking, if you have regular income and valuable assets you wish to protect, you might consider Chapter 13 over Chapter 7. In Chapter 7, you must liquidate any property of significant value to settle your debts.

Assemble data on your financial situation. To file a bankruptcy petition, you must provide a complete and accurate description of your financial situation to the court. Information you must collect includes pay stubs, tax returns and information on your debt and your creditors.

Contact your local court for forms. The United States Courts publish federal bankruptcy documents that can be used in every state. However, each state is allowed to develop its own property exemptions for Chapter 7 cases, and many districts also have local rules and forms you must use. Courts such as the Western District of Michigan have local rules listed on their websites.

Enter your financial data on the bankruptcy schedules. The bankruptcy petition consists of a series of schedules that require specific information. For example, you must list your real property on Schedule A and your personal property on Schedule B.

Attend counseling. Legislation introduced in 2005 requires you to attend credit counseling no more than six months before you file your petition. You must also attend a financial management course before you can receive your discharge.

Pay your fee and submit your petition. Filing fees for a Chapter 7 bankruptcy are $299; you must pay $274 to file a Chapter 13 bankruptcy (as of 2010).

Appear at your 341 meeting. You cannot receive a bankruptcy discharge if you do not attend your 341 meeting, also known as the meeting of creditors. The 341 meeting is usually scheduled 20 to 40 days after you file your bankruptcy petition. Creditors do not often appear at a 341 meeting, but you may have to respond to questions from your bankruptcy trustee.


About the Author

John Csiszar earned a Certified Financial Planner designation and served for 18 years as an investment counselor before becoming a writing and editing contractor for various private clients. In addition to writing thousands of articles for various online publications, he has published five educational books for young adults.