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Instructions on Filing for Bankruptcy

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by , 10-07-2011 at 07:19 PM (1308 Views)
How do I get started on filing for bankruptcy?
Credit counseling by a credit counseling agency approved by the US Trustee Program is required before a debtor can file for bankruptcy.

Should I hire a bankruptcy attorney? It is possible to file for bankruptcy without an attorney but it is not advisable. Bankruptcy law is complicated and an improper application of the law can adversely affect your case. A case may be dismissed or even worse, creditors may get more than they are entitled to if a debtor protects themselves under the law. While trying to save money from not hiring an attorney, the debtor can lose more money by not having the proper protection from creditors. If a debtor were to choose to proceed without an attorney, they should at least consider whether they can handle two of the most vital roles of the bankruptcy attorney:

Filing for bankruptcy: this may be the most complicated part of the bankruptcy proceedings. The debtor should at least seek some consultation or advice for this part of the proceeding to understand what debts will need to be paid back, what assets you will lose and which assets are protected. This can be a complicated and tedious task that can lead to a case being thrown out or assets unnecessarily being lost if not handled properly.

Handle creditors: The bankruptcy attorney will know what the creditors have a right to do and what they do not have a right to do and they can protect the debtor from creditors. The creditors may negotiate a plan for more money than they are entitled to, or file motions or suits that should be dismissed, or continue to make harassing calls without the proper protections of an attorney.

How much will filing for bankruptcy cost?

A bankruptcy attorney will cost money. However, quality attorneys can be found for moderate costs. Choosing an attorney who you trust and who will set cost limits can help reduce costs. Having all your documents in order and easily accessible will increase efficiency and in turn reduce the time the attorney must spend on the case. The less work your attorney has to do, the less it will cost.

Filing fees cost around $200-300 depending on which form of bankruptcy you file.

What Documents Do I Need To Start A Bankruptcy Procedure?
Forms can be found here: Forms must be filed with the appropriate US Bankruptcy Court in the district the debtor resides in.

For Chapter 7, a debtor must file the following documents with the court: a petition, schedules of assets and liabilities, a schedule of current income and expenditures, a statement of financial affairs, a schedule of executory contracts and unexpired leases.

The trustee must be provided with a copy of the debtor's tax return as well as tax returns filed during the case. If there are no tax returns then the debtor must provide the trustee with transcripts for the most recent tax year.

An individual debtor has additional filing requirements. They must provide: a credit counseling certificate from an approved credit counseling agency with any financial plan developed during this credit counseling, evidence of any payment from employers that occurred within 60 days of filing, a monthly net income statement including any anticipated increase in income or expenses after filing, and a record of the debtor's interest (if any) in federal or state qualified education or tuition accounts.

Chapter 13 has the same filing requirements as the individual debtor requirements for Chapter 7.
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Bankruptcy Law