Filing Bankruptcy, A How To Guide

Filing bankruptcy, a how to guide of the steps necessary to file bankruptcy without the use of high priced attorneys.

What is bankruptcy? Before filing bankruptcy, it is a good idea to know what it is and what to expect if you are not using a lawyer.

To put it plainly, bankruptcy is a legal procedure which allows you to get out of overwhelming debt in order to get a fresh start financially. There are two different types of personal bankruptcy: Chapter 7 and Chapter 13, but they are very similar. Chapter 7 straight bankruptcy allows you to keep everything that is paid for. Chapter 13 (consumer and small business reorganization) bankruptcy leaves the consumer responsible for making some payments, useful for those who are trying to avoid foreclosure.

Filing bankruptcy is a lengthy process usually handled by lawyers, but there are ways the consumer can avoid this expense. However, it will take a lot of time, patience and homework.

The first step in filing your own personal bankruptcy is to decide which type of bankruptcy you are eligible for. There are no maximum debt restrictions for Chapter 7, so virtually everyone is eligible for this type of straight bankruptcy. It gets a little more complicated with Chapter 13, this type of bankruptcy requires consumers to set up a "Best-Odd's" and "Best-Effort" budget for their creditors.

If you choose to file for Chapter 7 straight bankruptcy, it is important to obtain a bankruptcy kit including legal forms and guide. You may also wish to go to your local library or bookstore for other recommended materials. Some useful resources include:

* How to File Your Own Bankruptcy (Or How to Avoid it), by Edward A. Haman, Attorney at Law

* E-Z Legal Forms: Bankruptcy Kit, by E-Z Legal Kits

* Debt Free! Your Guide to Personal Bankruptcy Without Shame, by James P. Caher & John M. Caher

* Debt and Bankruptcy, by Steven D. Strauss

Once you have gathered all you resources and done your homework, the next step is to make a list and contact all your creditors. From them, you will need the following information:

* Name and address of creditor, and Collection Agency or attorney, if any.

* Basis for claim and account number.

* When the debt was incurred.

* Total amount of claim.

* Co-debtor's name and address, if any.

Once this is complete, it is time to reconcile all your personal information. This can get tedious, so be patient. You will need to put the following information in order:

* Your name, address, phone number, social security number, age and tax Id number, if any.

* Your spouse's name, address, phone number, social security number, age and tax Id number, if any.

* List any bankruptcies within the last six years, when they were filed, case number and date filed.

* Income from employment or business for both wife and husband.

* Payments to creditors (i.e. loans or any other debts more than $600.00 made within 90 days of the proceedings.).

* Suits, garnishments, executions and attachments.

* Repossessions, Foreclosures and returns within one year immediately preceding this bankruptcy.

* Assignments and receiverships made within one year of the filing of this bankruptcy.

* Gifts over $200.00 to family members and over $100.00 to charities.

* Losses from fire, theft or other casualty including gambling.

* Payments related to debt counseling or bankruptcy within one year prior to filing.

* All other property transfers.

* Closed financial accounts within the last year.

* Safe deposit boxes, where they are located, persons with access, contents and surrender date.

* Set-off's made by creditors within the last ninety days and the date it occurred.

* Property owned by another person that you hold or control.

* If you have moved within the past two years, list all previous addresses and dates.

* Very specific income information (i.e. gross paycheck, estimated overtime, deductions and so on.) for both spouses.

* Monthly budget of all expenses.

* List of all property (i.e. real estate, bank accounts, cash on hand, furnishings, personal effects and so on.) owned by both spouses.

Chapter 13 bankruptcies require the same information as above, but is taken a step further, particularly for small business owners, in an effort to benefit the creditor and to avoid foreclosure. Getting everything in order and keeping it organized is key. This is where the worksheets and legal forms contained in the kit come in handy. If you're confused about the process or what to do next, lawyers are available to provide free consultations should you choose to go this route. Your guides, resources and Internet availability will provide the necessary answers if you have the time to read through everything.

This information must be accurate and complete before filing for a court date. These proceedings are generally quick. You will be required to show up in court on the given date, speak on your behalf and accept the judge's ruling. Most cases are accepted, but few are rejected if the judge feels the debtor can afford the payments.

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