Process of Declaring Personal Bankruptcy

The process of declaring personal bankruptcy can be quite complex.  After you have decided which type of bankruptcy is right for you, you must attend credit counseling before you even file the bankruptcy petition.  Once you have completed credit counseling, you are ready to file the bankruptcy petition.

Plan for Bankruptcy

You must plan for bankruptcy by deciding which type of bankruptcy you wish to file.  Most people with personal debts file Chapter 7 or Chapter 13 bankruptcy.  In Chapter 7 bankruptcy, you must relinquish most of your assets, with a few exceptions, and you will receive a complete discharge of all eligible debts.  In Chapter 13 bankruptcy, you file a bankruptcy reorganization plan to pay your debts over a three or five year period. 

Attend Credit Counseling

Whether you choose to file Chapter 7 or Chapter 13 bankruptcy, you must attend approved credit counseling.  You must attend credit counseling before you file the bankruptcy petition with the bankruptcy court. 

File the Bankruptcy Petition

After you attend credit counseling, you must complete extensive paperwork about your assets and debts in order to file the bankruptcy petition.  There are numerous forms required to file the bankruptcy petition, and you also must pay a filing fee.  In the case of Chapter 7 bankruptcy, you then give up all but your exempt assets, and you will receive a discharge of all qualified debts.

File a Bankruptcy Reorganization Plan

If you have chosen Chapter 13 bankruptcy, you will next file a bankruptcy reorganization plan, which sets forth your proposal for repaying your debts over a three to five year period.  Under a reorganization plan, you must pay certain priority debts in full, pay secured debts current, and pay any remaining income toward your unsecured debts.

Get Advice and Help From a Bankruptcy Attorney

Choosing the type of bankruptcy that is best for you and completing the paperwork necessary to file either type of personal bankruptcy can be a complex process.  Therefore, it is wise to choose a qualified attorney who specializes bankruptcy law in order to assist you with this process.