Many people make the difficult decision every year to file for bankruptcy, regardless of the negative consequences that it brings. Although it is commonly thought of as being a difficult process, claiming bankruptcy is possible without the help of a lawyer. If you choose to take on the task yourself, these tips will help you discharge your debts with ease. Specifically, the following article will show you how to claim bankruptcy without a lawyer – a process commonly referred to as self bankruptcy.
1. Decide which filing is best – this will mainly depend on the type of debts you have accumulated. If you have unsecured debt from such things as credit cards or medical expenses, it is probably in your best interest to file under Chapter 7. This will involve liquidating your assets to pay off your creditors, but after your debts have been discharged you will be able to start rebuilding your credit immediately. Chapter 13 is a type of bankruptcy claim that consolidates your debts and allows you to pay off a portion of them over a period of 3-5 years. This option is only available if you have enough disposable income to cover the monthly payment.
2. Organize all your documents – this will be crucial for completing the next step, or if you decide to visit a debt management specialist. You will need to have copies of all financial document, such as: pay slips and any other forms of income or invoices, all expenses, tax returns, etc.
3. Do a Means Test – this will determine your eligibility for filing bankruptcy. Taking into account your income and expenses, it will declare if you have sufficient disposable income to file under Chapter 13 or whether Chapter 7 would be best. This calculation also considers the minimum wage and cost of living in your state, so filing out a form online that requires you to input your zip code would give you an accurate assessment of your situation.
4. Consider any other options – this is important to look at before filing any official document. Discuss your situation with creditors and see if it is possible to redesign your payment plan to something more manageable. You may be able to cut down the interest or even the principle amount just by employing simple negotiation skills. Debt consolidation companies take the stress out of the situation by doing the negotiating on your behalf, but they can charge high fees which can make it even more difficult for you to make your monthly payments. Be careful if you decide to involve family or friends in your financial problems as accepting loans from them could prove more troublesome in the future.
5. File documents – this is when you actually declare bankruptcy by filing all the documents at the Bankruptcy Court in your area. The fee is approximately $300, but may be waived if you go before a judge and prove that you do not have sufficient funds to cover it.
6. Attend 341 meeting – this is the final stage where your creditors have the opportunity to raise any objections to your decision to file for bankruptcy. You must also declare the accuracy of all the information you have provided in your file.
7. Wait for discharge – this will occur about 60 days after the 341 meeting, if you have filed under Chapter 7. If you have filed under Chapter 13, it will be very soon after you have finished paying off all your debts.
If you decide that your financial situation can only be solved by bankruptcy and you wish to do it yourself, it is certainly possible, but can get rather confusing. Many reputable bankruptcy lawyers offer free initial consultations which would be wise to take advantage of to learn as much about the process as possible beforehand. Claiming bankruptcy without a lawyer can also prove tricky due to the amount and complexity of the paperwork involved. Bankruptcy Petition Preparers (BPP’s) are extremely useful in this area as they will handle your file quickly and easily, but they are unable to offer any legal advice.
As long as you are prepared and organized, your bankruptcy filing should be straightforward and simple. Within just a few short months you could be debt-free! To learn more about the personal bankruptcy process, consider filling out our free bankruptcy evaluation. You can also browse through our site to learn more about how to claim bankruptcy without a lawyer.
Click here to learn about filing bankruptcy in California without an attorney.