How to File Bankruptcy: The First 4 Steps

If you’re wondering how to file bankruptcy, you’re not alone. Each year, more than one million Americans file for protection under Federal Bankruptcy Laws.

In most cases, the people filing are hard working individuals who have found themselves in financial trouble. The sudden loss of a job, a divorce, unexpected medical expenses, or some other unforeseen event can wipe out a lifetime of savings, and leave you struggling to keep pace. Creditors aren’t necessarily concerned with making things easier, and for many, the stress of dealing with stacks of unpaid bills can seem almost unbearable.

Fortunately, federal laws can help ease the burden. Bankruptcy laws were established for your protection, and they offer the opportunity for you to start rebuilding from scratch.

But, that doesn’t mean you should enter into bankruptcy lightly. Bankruptcy is there to help you if you’re in a financial pinch, but the process is not easy and can be confusing. Seeking expert help from an attorney can make the bankruptcy process much easier. In fact, working with an attorney can save you money by ensuring your assets are allowed maximum protection and that your debt is properly accounted for in the filing. Your attorney will help you walk through these steps to get your filing underway:

1. Meet with an attorney. Typically, bankruptcy filing is complicated and stressful. Although you can do it alone, it is highly recommended that you work with a bankruptcy attorney to help you file. The majority of “pro se” bankruptcy cases are dismissed in court. An attorney will know how to file bankruptcy for the best possible outcome, and can help you accurately assess your financial affairs, assist you with completing the Chapter 7 means test and help determine which bankruptcy filing option is best for you. After that, your attorney will submit your petitions and help steer your case through court.

2. Evaluate your alternatives. Prior to filing for bankruptcy, Federal Bankruptcy Laws require that you obtain consumer credit counseling from an entity approved by the U.S. Trustee. This counseling is intended to provide you with possible alternatives and must occur within 180 days of the date of the bankruptcy filing.  Your attorney can advise you of when is the best time to take the course so that it doesn’t expire prior to filing, and may be able to help you find the most affordable programs for your needs.

3. Consider bankruptcy options. You may be most familiar with a “straight” or liquidation bankruptcy (usually referred to as “Chapter 7“). However, for some people, Chapter 13 debt restructuring may be the best option. Chapter 13 reduces your overall debt based on your monthly disposable income. Unlike a consolidation loan, in which an agency reduces your debt based on what the creditors want you to pay, Chapter 13 creates a plan for you to pay according to what you can pay. In some cases, this may be 10% or less of your outstanding debt. . It also offers you an opportunity to save your home from foreclosure and vehicle from repossession. Determining which type of bankruptcy is best for you involves evaluating if you meet the bankruptcy means test requirement and income vs. expenses calculations, as well as looking at your personal assets and financial situation.

4. Refer creditors to your attorney. Once you have retained an attorney, you can breathe a little easier. Your attorney can speak to creditors on your behalf — and that means you don’t have to answer any more aggravating phone calls! Once your attorney has filed your case, an “automatic stay” goes into effect. This injunction stops lawsuits, foreclosures, garnishments, and all collection activity against you.

Filing for bankruptcy can be a bitter pill to swallow. But, Federal Bankruptcy Laws are here to help you get a fresh start. If you’re wondering how to start to file bankruptcy, schedule a free consultation with a Columbus Bankruptcy Attorney, by calling 614-934-1544 or contact us today.