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File for Bankruptcy

File for Bankruptcy

Are you overwhelmed by debts and financial obligations? Do you need relief, forgiveness, reduction, or a new payment plan for some of these obligations? You may need to file for bankruptcy, and DoNotPay is here to help!

When is it necessary to file for bankruptcy?

If you find yourself unable to cover your debts in combination with daily or monthly expenses, you should consider filing for bankruptcy.

Who can file for bankruptcy?

Individuals and corporations can file for bankruptcy. Currently, we can only help individuals who want to file for bankruptcy. Specifically, people who lack the financial means to pay back their entire debts (according to a complex means test) can file for Chapter 7 bankruptcy; some people with family farms or family fishing operations can file for Chapter 12 bankruptcy; and most other people can file for Chapter 13 bankruptcy.

What happens when I file for bankruptcy?

When you file for bankruptcy, an automatic stay is placed on attempts to collect debt from you. That means that a bank threatening to foreclose on your house, a credit card agency harassing you about debt, or any other creditor must pause any proceedings until the stay is lifted.

How long does it take to file for bankruptcy?

The initial filing takes only as long as it takes to fill out the relevant forms and send or deliver them to your local bankruptcy court.

The overall process of bankruptcy (from filing to the discharge, or elimination, of your debt) takes 4-6 months for Chapter 7 bankruptcy or 3-5 years for Chapters 12 or 13 bankruptcy.

Is bankruptcy the best choice for me?

It depends on your situation. If you think you can afford to liquidate enough assets to pay off your debts, you may be better off doing that than filing for bankruptcy. Additionally, if your credit rating is high, then filing for bankruptcy will reduce it substantially. Alternatively, if you already have a low credit rating, don't have the means to pay back your debts on any timeline, or would be substantially more able to pay back the debts over a 3-5 year window, you might be best off filing for bankruptcy.

What are the different types of bankruptcy?

There are 3 main types of personal bankruptcy that you can file: low-income, farmers/fishermans, and wage-earner bankruptcy.

Types of Personal Bankruptcy

  • Chapter 7: Low-Income Bankruptcy

    • Means-Tested: In order to file this kind of bankruptcy, you usually need to earn below the median income of your state or otherwise have some factor denying you the means to pay back your debts in full.

    • Surrender Unprotected Assets: Any assets aside from protected assets (typically at least some home equity, a modest car, household furnishings, a wedding ring, etc.) may be surrendered to repay your debts.

    • Done Quickly: Chapter 7 bankruptcy cases are usually resolved in 4-6 months, and all debt covered in the bankruptcy case is either covered by your unprotected assets or forgiven!

  • Chapter 12: Farmer's/Fisherman's Bankruptcy

    • This form of bankruptcy is similar to the below Chapter 13 bankruptcy except that it has additional requirements and features relating to family farmers and family fishing operations.

    • The debt can be larger than that allowed in Chapter 13 ($4,153,150 for a farming operation or $1,924,550 for a commercial fishing operation).

    • There are requirements specific to Chapter 12 bankruptcy concerning the ownership, operation, and operators' income share of the family farm or fishing operation.

  • Chapter 13: Wage-Earner Bankruptcy

    • Eligibility: An individual can file for Chapter 13 bankruptcy if his or her unsecured debts are less than $394,725 and secured debts are less than $1,184,200.

    • Payment Plan: This kind of bankruptcy is intended for people with steady income and adequate means to service most or all of their debts but who need to restructure their debts over a longer payment period or reduce them somewhat.

    • Save Your Unprotected Assets: In Chapter 13 bankruptcy, you don't have to surrender your unprotected assets as long as you make your payments as part of the bankruptcy settlement. The only assets you might need to surrender are assets used to secure any secured loan, and even those likely can be saved if you continue making your payments.

    • Longer Time Period: Chapter 13 bankruptcy settlements last between 3 and 5 years.

    • Trustee-managed: If you file for a Chapter 13 bankruptcy, you will make payments to a trustee, who will distribute the money to your creditors in line with your bankruptcy settlement.

How can you solve the problem on your own?

How do I file for bankruptcy?

To file for bankruptcy, you must complete the following steps.

  1. Put together a list of your assets, liabilities, income, and debts, along with the quantities of each.

  2. Fill out various forms (depending on the type of bankruptcy, these forms include detailed questions about your debts, expenses, assets, income, other potential hardships, and other relevant factors).

  3. Submit the forms to your local bankruptcy court.

How Can DoNotPay Help?

We can help you to determine which kind of bankruptcy best suits your needs and then lead you through organizing your debts and assets so that you'll be ready to fill out your forms with ease.

It Only Takes 5 Easy Steps:

  1. Search for File for Bankruptcy on DoNotPay.

2. Put together a list of your debts, expenses, and assets. If you need help accessing information like your credit report, DoNotPay can help you get your report.

3. Let DoNotPay walk you through your bankruptcy options and help you determine whether a Chapter 7, Chapter 12, or Chapter 13 bankruptcy is right for you.

4. DoNotPay will then help find the best credit counseling course near you, which you need to complete before filing your bankruptcy forms.

5. Lastly, DoNotPay will gather all of the forms you need (including available fee waivers) and help you locate your nearest bankruptcy court. All you have to do is complete the required forms, prepare your filing fee, and file the application with your local court.

And that's it!

Once done, the court will give you:

  • Your bankruptcy case number

  • The name of your bankruptcy trustee

  • The date, time, and location of your meeting with your trustee

At this point, your case has been filed! Congrats! The automatic stay now protects you from all debt collectors. Your trustee will then contact you for further financial documents you will need to provide. Make sure to attend your meeting as well as complete the post-filing bankruptcy debtors course!