How to File Chapter 7 Bankruptcy

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How to File for Chapter 7

There is much to know about bankruptcy and chapter 7. Filing for Chapter 7 bankruptcy is a lengthy and overwhelming process and any individual or business filing a bankruptcy petition should consult a bankruptcy lawyer for expert legal advice. The process of filing for Chapter 7 bankruptcy includes determining eligibility, collecting paperwork, filing paperwork, consulting a bankruptcy lawyer and much more before everything is complete.

Chapter 7 bankruptcy is a form of bankruptcy available to individuals, businesses, and partnerships that need to have their debts removed from their records, also known as chapter 7 debt. Chapter 7 bankruptcy filing comes with a cost for the individual or the business filing.

A $245 case filing fee must be paid to the court, a $39 miscellaneous administrative fee must be paid to the court, and a $15 trustee surcharge must be paid to the trustee when filing for bankruptcy.

Step One: Determine Eligibility

The first step in filing for Chapter 7 bankruptcy is determining the eligibility of individuals and companies. Any individual, partnership, corporation or sole proprietorship is eligible to file for Chapter 7 bankruptcy in the United States. Any debtor that has filed for another form of bankruptcy within the previous 180 days of filing for Chapter 7 and failed to show up in court or voluntarily declined to show up in court cannot file for Chapter 7 bankruptcy.

In addition, any debtor that did not seek counseling from an approved credit counseling company 180 days prior to filing for Chapter 7 bankruptcy is not allowed to file for a bankruptcy petition. In emergencies, there are exceptions that can allow debtors that fall into the above categories to file for Chapter 7 bankruptcy as determined by the United States trustee.

Step Two: Consult with a Bankruptcy Lawyer

The second, and probably the most important step, is to consult a bankruptcy lawyer prior to filing for Chapter 7 bankruptcy. Discussing an individual or company’s financial records should be done in the company of a bankruptcy lawyer who has years of experience in the field so that he or she will be able to handle any type of case that comes across their desk.

The most experienced bankruptcy lawyer will suggest alternatives to bankruptcy, not just pressure their client into filing for bankruptcy as soon as possible. A chapter 7 bankruptcy lawyer will also make what is an overwhelming and stressful process easier to deal with when filing paperwork and appearing in court for bankruptcy hearings.

Step Three: File the Petition

When filing for Chapter 7 bankruptcy, the debtor must sit down with his or her lawyer and collect all of the required paperwork needed to make the process official. The debtor must provide the following information in their paperwork regarding their financial records:

• A list of all creditors and the amount and nature of their claims
• The source, amount, and frequency of the debtor's income
• A list of all of the debtor's property
• A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc

Other paperwork that must be collected and filed with the government is a certificate that shows a debtor successfully completed a credit-counseling workshop within the previous 180 days, the most recent federal tax return of the debtor, and the wage stubs of the debtor for the previous 60 days if the filer was working.

When working with a bankruptcy lawyer the debtor will be guided by the lawyer how to file all of their bankruptcy paperwork. The paperwork must be filed with the courts along with a couple of bankruptcy fees. The first fee is $245 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee fee that must be paid to the trustee assigned to the case from the United States government. Upon the filing of bankruptcy, the debtor must pay these fees immediately to the clerk of the court where the case is being filed.