The simple answer is yes. If you take the time to understand the process and take it step by step, you can file a bankruptcy petition on your own. The following FAQ will help explain how to do it yourself:
Question: What is Bankruptcy?
Answer: Bankruptcy is a legal proceeding that allows a person to get out from under (Chapter 7) or to arrange for an affordable repayment (Chapter 13) of debt. It allows individuals to get a fresh financial start. Bankruptcy can be very useful and effective in resolving financial problems. However, it is not the right step for everyone.
Question: Where can I get information about Bankruptcy law and filing for bankruptcy?
Answer: You can get all the information you need, for free, by accessing the United States Federal Bankruptcy court website at http://www.uscourts.gov/FederalCourts/Bankruptcy.aspx There you can read an overview of the law. You can read about the two personal bankruptcy options available to you (Chapter 7 or Chapter 13). You can also download the forms you will need along with instructions for filling out those forms. The site also outlines the rules of the court, filing fees and resources etc.
Question: What is the difference between a Chapter 7 and a Chapter 13?
Answer: Chapter 7 is known as”liquidation”. Your debts are discharged (canceled), but you must give up any nonexempt property to pay your creditors. Any secured property (such as mortgage or car loans) can be retained if you are current on the payments and can make future payments regularly.
Chapter 13 is also called a “reorganization” or “wage earner plan.” It allows you to keep property, such as your home or car, even if you are delinquent. You will be required to come up with a plan to make the regular monthly payments plus a payment toward the arrears.
Question: Where do I start?
Answer: You need to think about your situation and whether or not bankruptcy is right for you. Think about your current financial situation and if there are certain assets you wish to retain. Ask yourself if you have other options such as negotiating with your creditors. If you wish to proceed, you need to read about what the requirements are for a Chapter 7 and a Chapter 13 so you can determine which is best for you.
In addition to reading about Bankruptcy on the official Bankruptcy court website, you can get additional information about filing bankruptcy through an online search. Another source of information is your local bar association. Contact them to see if any attorneys give free or low cost initial consultations. Even if you cannot afford to hire an attorney, they can help you understand your options. Depending on your situation and where you reside, there may be free or low cost legal assistance available to you.
Question: Are there any things I need to do before I file Bankruptcy?
Answer: The bankruptcy law requires that you take an approved credit counseling course before filing your petition. The Certificate of completion needs to accompany your petition.
Question: Will I have to go to court?
Answer: Usually, you will have to make one appearance at a hearing called “meeting of creditors”. It is run by a trustee and is generally short and simple. The trustee will ask you a few questions and creditors are permitted to attend and ask questions.
Question: How can bankruptcy help me?
Answer: It will stop your creditors from harassing you and will stop debt collection processes such as foreclosures, car repossessions; utility cut-offs and wage garnishments. The filing of the bankruptcy give you an automatic “stay” of all these proceedings
Question: Can I eliminate all of my debts?
Answer: you cannot eliminate certain secured debts such as car loans and home mortgages. You cannot keep the collateral unless you continue to pay the debt. You also cannot discharge certain types of debts, such as child support, alimony, most student loans, court ordered restitution, criminal fines, and most taxes.
Question: What property can I keep?
Answer: This is governed by your state’s law. It is important that you determine what property is exempt before you file your petition. This information may alter your decision to file bankruptcy.