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Basics of Filing for Personal Bankruptcy

Updated on January 21, 2011

Bankruptcy Filing Tips

Bankruptcy is not necessarily the end of your life as you know it. It's actually a good thing for those who have gotten in over their head in debt. Almost anyone who's filed and received a discharge will tell you the same thing: Why didn't I do this sooner? The relief people feel after eliminating all of their debt in one fell swoop is almost indescribable. Following are some tips and advice for what to do and expect in a bankruptcy filing.

First, start by gathering up each and every last piece of financial data. This includes bank and retirement accounts, mortgage paperwork, leases and credit card bills to name a few. Essentially anything that has to be paid for or receives funding will need to be entered into the petition. It also never hurts to pull a credit report to use as a checklist.

Once all the information is at hand, it's time to get a copy of the petition. Start at and navigate to the bankruptcy courts area. There the petition can be downloaded as a .pdf and filled out electronically. Make sure to check the local federal court's website for any local forms that may need to be filled out by the petitioner.

Read through the petition before starting anything. At this point it's not a bad idea to purchase a guideline such as the ones offered by NOLO. They provide a step-by-step walk through of the schedules. Each form and schedule require certain information. Overall they provide the trustee with a picture of your financial life, so being thorough is of the utmost importance at this point. Once you're comfortable with the petition, start entering information.

Obtaining credit counseling is a requirement for filing. This can be done online as long as it's a not-for-profit that's approved for the state you reside in. They are also required to waive the fee when it's proven that there's no money to pay for the course. After completion, a certificate will be provided which is to be included into the petition paperwork. This must be done 120 days before filing.

Begin by filling out the means test to determine which chapter can be filed, 7 or 13. If the combined household income is under the state median, it's an automatic qualification for chapter 7. When there's too much income left over, it's going to have to be a chapter 13, which deals with repayment of debt.

It's time for filing the petition once it's completed. Filing costs differ from chapter to chapter. It's best to check with the local court's website or call the clerk to get the information. From here the paperwork can be mailed in with a money order or filed in person. Make sure that there is nothing left out or the case may be dismissed.

The clock starts ticking the moment that the petition has been given a case number. Depending on which chapter was filed, it'll be either three to four months or 36-60 months until discharge. There's not much to worry about provided the trustee accepts the petition with no question and all rules are followed. It's a matter of breathing easy, going to the 341 meeting and monitoring your case through PACER. Once discharge has been given, it's time for a fresh start.


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    • Michele Goudie profile image

      Michele Goudie 7 years ago from Chicago

      It is absolutely a huge decision. The time to pull the trigger is when you get to the point that you're looking at your retirement accounts to pay bills. Don't do it. Retirement funds are protected from bankruptcy, so save your future instead of trying to fight a losing battle.

    • profile image

      Nicole 7 years ago

      We've thought about filing a time or two but have always held off. It's a huge decision.

    • Michele Goudie profile image

      Michele Goudie 7 years ago from Chicago

      Sadly all too true. The megabanks make crap decisions which hurt the customer and push them to bankruptcy. Just blows my mind at times the financial mess this country is in.

    • TomicaB profile image

      Tomica Bonner 7 years ago from Ohio

      Nowadays with the economy as it is, more and more are considering it as an option.