What are some tips on how to file bankruptcy?

Bankruptcy Procedure

• Find a lawyer. The U.S. Courts Web site strongly recommends finding a good attorney to represent you in the bankruptcy proceedings. Because declaring bankruptcy often means that you don't have disposable income, try to find a lawyer who will offer his or her services free of charge ("pro bono").
• Explore the American Bar Association's Consumers' Guide to Legal Help and the Legal Services Corporation's Web site for free legal services in your area.
• Consult with a credit counselor about your debts. Under chapters 11 and 13, the court requires proof that you have sought credit counseling and have developed a repayment plan with your credit counselor. Look through a list of court-approved counseling agencies in your area.
• Determine which district's court you should file in. To find which court serves your area, look at the U.S. Court's map.
• When your lawyer files your petition, you will be required to provide documentation of:
• Credit counseling (Chapters 7, 11 and 13)
• Repayment plan developed through credit counseling (Chapters 11 and 13)
• Schedule of assets and liabilities (Chapters 7, 11 and 13)
• Schedule of current income and expenditures (Chapters 7, 11 and 13)
• Schedule of executory contracts and unexpired leases (Chapters 7, 11 and 13)
• Statement of financial affairs (Chapters 7, 11 and 13)
• Evidence of payment from employers (Chapters 11 and 13)
• Statement of monthly net income (Chapters 11 and 13)
• Record of interest in federal or state qualified loan or tuition accounts (Chapters 11 and 13)
• Once your petition is filed, the court-appointed trustee will schedule a meeting with you and your creditors. The meeting usually takes place between 20 and 40 days after the petition is filed. You are required to attend and answer questions posed by your creditors and the trustee.
• Depending on which chapter you file under, your trustee will advise the court of the status of your case, and the court may grant your bankruptcy request. Under chapters 11 and 13, you will be obligated to follow the payment plan supplied to the court.

Of course, once you find a good lawyer, he or she will walk you through the steps of filing for bankruptcy. To determine which rules you want to file your petition under, read these overviews of chapters 13, 11 and 7.

Chapter 13 Bankruptcy

Individuals filing for bankruptcy usually declare under chapter 13, which may prevent home foreclosure. Payments may be lowered on consumer debts, as the payments can be spread out over years. This chapter may also protect co-signers. Chapter 13 does not discharge, or get rid of, all of your debt. Instead, it provides you with relief from the pressures of creditors and gives you time (usually three to five years) to repay a portion of your debts. Total fees for filing a chapter 13 suit in 2008 are $274 ($235 filing fee plus $39 administrative fee), which may be paid in four installments with the court's permission.

Chapter 11 Bankruptcy

Chapter 11 is most often used by partnerships and corporations who believe that by reorganizing they can pay off their debt over time. However, individuals may also file under chapter 11. With chapter 11, a payment plan is developed that must be followed for five years (unless the debts are repaid with interest in a shorter period). Chapter 11 suits cost $1,039 to file in 2008 ($1,000 filing fee plus $39 administrative fee), which may be paid in four installments with the court's permission.

Chapter 7 Bankruptcy

Under chapter 7, the business or individual filing for relief does not believe that their debts can be repaid. Income sources may no longer be viable. For either businesses or individuals, filing chapter 7 allows the court-appointed trustee to liquidate all assets and use the proceeds to repay creditors. Chapter 7 total costs for 2008 are $299 ($245 filing fee, $39 administrative fee and $15 trustee surcharge), which may be paid in four installments with the court's permission.