How to File Bankruptcy

Are you struggling with debt that you aren’t sure you can come out of on your own? Do you find
yourself asking the question “should I file bankruptcy” several times a month? You are not
alone; thousands of Americans every day are hurting financially and wondering the same thing.
So maybe it’s time for you to get some answers. Below are four of the most common questions
heard by bankruptcy attorneys and paralegals from individuals and/or married couples who are
looking for more information on how to file bankruptcy.

1. What is Bankruptcy? – Bankruptcy is a legal process that allows qualified individuals and
married couples to get out of debt. There are two main types of personal bankruptcy: Chapter
7 and Chapter 13. Chapter 7 bankruptcy is the most common type of personal bankruptcy and
is typically beneficial for those with high amounts of unsecured debt (credit cards, medical bills)
and very little assets (vehicles, paid in full homes). Chapter 7 bankruptcy essentially wipes
away unsecured debt and gives the debtor a financial “fresh start”. The other type of personal
bankruptcy, Chapter 13, involves a 3-5 year repayment plan in which the debtor is allowed by
the court to pay back a percentage of their overall unsecured debt. Because of the repayment
plan, Chapter 13 bankruptcy is much more complex than Chapter 7 so it is highly recommended
that the debtor hire a bankruptcy attorney to aide them during the process.

2. How do I file for bankruptcy? – In order to legally file bankruptcy certain forms must be
submitted to the court that include various information about financial history, current and past
debt, and income. If you decided to file for bankruptcy using an attorney then you will provide
documentation to them and they will fill out the correct forms for you and file them with the court.
About 30 days after your case is filed with the court you will be required to attend a “meeting of
creditors” at the nearest bankruptcy court room. Although all of your creditors will be notified of
the time and place of the hearing, it is rare that any creditors show up. If you file a Chapter 7
bankruptcy case then 60-90 days after your hearing is held you will receive discharge papers in
the mail notifying you that your bankruptcy was completed and successful. On the other hand,
if you file a Chapter 13 bankruptcy then your 3-5 year repayment plan will begin 30 days after
your hearing.

3. How much does it cost to file bankruptcy? – The basic cost to actually file the bankruptcy
paperwork with the court is $306 for a Chapter 7 and $281 for a Chapter 13, but there are also
attorney’s fees to consider. The cost of bankruptcy will vary depending on which chapter you file
and what attorney you choose to hire. All bankruptcy attorneys create their own fees based on
the amount of work that they will potentially have by filing your case. In most cases attorneys
charge less for Chapter 7 cases because they are quicker and typically more simple to file.
Chapter 13 bankruptcies may cost more in attorney’s fees, but it is common for attorney’s to
place the bulk of their fees into the Chapter 13 payment plan so that the debtor has more time
to pay it off. The average amount of attorney’s fees requested for a Chapter 7 case ranges from
$1000-$2000, and for Chapter 13 the average ranges from $1800-3500.

4. How often can I file bankruptcy? – There are laws that regulate how many times an
individual can file for bankruptcy. For instance, once you have filed a Chapter 7 bankruptcy you
must wait 8 years to file again. This rule was implemented in the most recent overhaul of the
bankruptcy laws in 2005 known as the “Bankruptcy Abuse Prevention and Consumer Protection
Act”. This law was passed in order to prevent debtors to file multiple bankruptcies and abuse the
system. There are different waiting periods depending on the type of bankruptcy you filed first
and are planning on filing again. For instance, you only need to wait 4 years between filing 2
Chapter 13 cases.

Whether you are wondering how to file for bankruptcy for the very first time today or you have
been asking yourself that question for months, knowing more about the process can help. Get
answers to your question from reputable websites, friends and family that have filed before,
or even by calling a local attorney and requesting a free consultation. If you are facing an
overwhelming amount of debt that you cannot see yourself coming out of alone in the next 1-2
years then filing a bankruptcy may be just what you need to get your finances back on track.