When you run out of options to handle outstanding debts and you feel your financial situation is out of control, you may opt to file for a chapter 7 bankruptcy. Obtaining relief via a chapter 7 filing includes liquidating your assets to help pay your creditors so you can get back on track financially. However, you may be intimidated by the paperwork and filing regulations. After securing the help of a bankruptcy attorney, the following guide can help you prepare your court filing and survive bankruptcy.
Locate Documents for all of Your Property and Investments.
You will need to present the federal bankruptcy court in your district with the details on all real estate you own including titles for vehicles and boats. You will also be required to reveal all of your financial assets including stocks, bonds, mutual funds, 401Ks and any other type of investments.
If you have these documents spread around in different places, filing for bankruptcy will provide you with the opportunity to compile them, make copies and put them in a secure place like a safe deposit box.
Obtain Copies of Your Credit Report
By federal law, you are entitled to one free credit report per year from the major credit reporting agencies. Your lawyer will use the credit report to help prepare your filing. The bankruptcy trustee assigned to your case will use the document to determine how your assets will be liquidated.
If you have never obtained a credit report, viewing the document may be an eye-opening experience. The document includes basic details about how much you owe to some creditors, your bill payment history and whether or not there are pending lawsuits against you.
Make sure you have a relatively recent credit report to submit to your attorney and to include in your bankruptcy filing.
Gather Bank, Tax and Bill Statements
In addition to obtaining a credit report, you should collect copies of bank statements and taxes from the past several months. You should also gather copies of all of your major bills including utilities, credit cards, car payments and student loans.
Make Sure You Have a Photo ID
Even if an attorney files your bankruptcy for you, the court needs proof of your identity. Consequently, you need to make copies of your government-issued identification and Social Security card. If you have lost your current ID, visit the local branch of the state department of motor vehicles to get a replacement as soon as possible. A passport or military ID will also suffice as proof of ID.
The Social Security Administration provides free service replacements for people who have lost their card. Do not pay a third party to get a new Social Security card.
Find an Authorized Credit Counseling Service
One of the conditions of a successful bankruptcy discharge is attending a credit counseling session. You can attend an in-person session or complete an online seminar. The federal court system offers a list of approved credit counseling services on its website. You can also ask your bankruptcy attorney for a referral to an accredited counseling service.
Make Sure You Have the Funds for Bankruptcy Fees
Even if you file for bankruptcy on your own, you will have to pay legally mandated fees to the federal court in your district. The current fees for bankruptcy filings are always listed on the federal court's website.
The outcome of a bankruptcy will affect your life for years and have serious legal consequences if you fail to follow bankruptcy rules. Even the federal government warns potential bankruptcy filers of the folly of attempting to file solo or "pro se." Therefore, make sure that you fully understand all of the rules of bankruptcy. If you hire an attorney, like those at Kreisler Law PC Chicago, do not be shy about asking them to explain each step of the process to you.
