7 Tips for Filing for Bankruptcy


A bankruptcy filing begins a lengthy process of countless court and creditor meetings, which work toward wiping away unwanted debt and a fresh start. The filing is the gateway to creditors, judges, and bankruptcy personnel’s financial life, so make a flawless first impression with these tips.

1- Gather Proof of Finances

Assets and expenses equal total finances and the application expect full disclosure. Assets feature money around the house, all credit cards, all bank accounts, property owned, furniture, apparel, electronics, jewelry, belongings, and work income. Calculate all assets to get the sum. Acquire proof of finances through bank statements, receipts, warranties, and canceled checks. The reason for finances is to determine the amount eligible for bankruptcy.

2- Gather Proof of Debtors

A credit report offers concrete proof of debt owned and debt paid. Debtors can get up to three free reports yearly (one from Experian, one from Equifax, and one from TransUnion). Mention all creditors with outstanding debt on the bankruptcy application, including ceased contact creditors, debt forgiveness, wiped out debt, foreclosures, and liens. Include creditors who send a monthly bill like utilities, car dealers, plumbers, and phone/internet companies and use the bill as proof. Additionally, mention debtors not included in the credit report such as family, friends, pawnshops, hairdresser, mechanic, lawn services, repairperson, and everyday expenses. Grab proof of these debts by retrieving a written or electronic contract. Calculate the amount to determine debt owed. The courts must know the sum so they understand who seeks compensation.

3- Hire an Attorney

Perpetual rules and regulations associated with each bankruptcy chapter along with general rules affecting all chapters have turned simple filing complicated. Consequently, it’s no longer budget-conscious to self-file a bankruptcy application. A qualified lawyer will guide a debtor through the process. Although expensive, their knowledgeable expertise is extremely satisfactory. Alternatively, pro bono lawyers or low-cost attorneys offer great service without draining finances.

4- File the Correct Bankruptcy Chapter

Personal bankruptcy comes in Chapter 7 and Chapter 13. Chapter 7 is liquidation, where debtors sell everything of value for a lump amount that’s divided among creditors. Chapter 13 is a court-approved repayment plan. The total amount and monthly amount depend heavily on the judge’s view of a debtor’s finances. In the same vein, bankruptcy doesn’t clear student loans, child support, alimony, taxes, and home liens. A hired attorney can determine which bankruptcy chapter is right for your financial situation.

5- Fill Out Bankruptcy Application Correctly

The quickest way to earn filing delays, returns, or a rejection letter is to file an incorrect application. Incorrect applications include mathematical and grammar errors, missing details, incomplete data, and withholding information. A correct application is an open book of the debtor’s finances. It’s thorough, error-free, and honest. An attorney should review the application to ensure every detail is accurate.

6- Pay Bankruptcy Fees

The attorney will collect bankruptcy fees at the time of filing. After all, bankruptcy costs money and its unlikely government officials will process the application in exchange for a ‘monthly payment’ or a ‘bill me later’ scenario. An attorney, however, will negotiate payment methods. The application will remain on file until then, which is good for debtors who cannot afford to file immediately.

7- Complete Bankruptcy Requirements

Most filing processes contain additional requirements to complete. The main requirement is taking government recommended credit counseling classes with certificates (as court evidence) before the application can begin processing. Since classes aren’t free, expect to pay unless you have a waiver. Individual state and city laws could add more requirements before filing, so check with an attorney and local government offices for answers.

A good first impression ensures a better outcome than a bad impression. Likewise, a successful bankruptcy filing increases the odds of a successful discharge. Hire an affordable, yet knowledgeable attorney to file the correct bankruptcy chapter, gather evidence, and complete requirements to file with no delays or returns.

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Kevin Schultz is a professional journalist with over 15 years of writing and media experience. He is a full-time contributor to the Themocracy Online News Blog and his insightful writing has been enjoyed by thousands.