- 1). Determine if Chapter 7 or Chapter 13 bankruptcy is better for your situation. Chapter 7 is designed to erase your unsecured debt. Chapter 13 gives you an opportunity to repay your creditors in a given time frame. This time frame is usually between three and five years.
- 2). Assemble the proper financial information into one folder. Under both Chapter 7 and Chapter 13 bankruptcies, you will need a list of all personal property including your home and car. You will also need to furnish two years' worth of tax returns, a list of all income you receive and a list of your monthly expenses.
- 3). Take credit counseling classes. You are required to enroll in a credit counseling class that is approved by the bankruptcy court. After completing these classes, you will receive a certificate. Put this certificate into your financial folder. The U.S. Trustee Program (see Resources) lists available classes.
- 4). Complete the means test. Form 22A (see Resources) is a two-part test that analyzes whether you qualify to file a Chapter 7 petition. Under the first part, you will be asked questions to determine if your income can cover at least 25 percent of your debt after monthly expenses. The second part determines whether your income is less than Kentucky's median income. As of June 2010, Kentucky's median income is $37,584 for a single person, $45,653 for a couple, $54,683 for a three-member family and $64,459 for a four-member family. Add $6,900 for each additional family member after four.
- 5). Submit all financial documents and pay a bankruptcy filing fee to your local bankruptcy court. Take your financial folder and credit counseling certificate to the bankruptcy clerk. You will be required to pay $299 to cover filing fees if you are filing for Chapter 7. If you are filing for Chapter 13, $274 is required to cover filing fees. The bankruptcy court will assign a trustee to manage your financial affairs.
- 6). Attend a meeting with your trustee and creditors. This meeting, called a 341 meeting, occurs 20 to 40 days after a Chapter 7 filing and 20 to 50 days after a Chapter 13 petition. You will be asked personal financial questions. It is extremely important to answer every question truthfully.
- 7). If filing Chapter 7, enroll in a financial management course approved by the bankruptcy court. This is required to receive your discharge from bankruptcy. The U.S. Trustee Program (see Resources) lists approved course providers.
SHARE
