Bankruptcy is a highly convenient debt relief tool that US citizens can use in some difficult financial situations, including job loss, divorce, and injury. If you are in a tough situation, lawyers from Debt Stoppers will guide you through the steps on how to file for bankruptcy in 2021 correctly. Let’s figure out how to get a fresh start.
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Which Case Is Yours?
First of all, you have to figure out whether bankruptcy is the best legal debt solution in your case. To determine which bankruptcy chapter works best for you, you have to learn the process’s basic types. Most probably, you don’t need Chapter 9 Municipality Bankruptcy or Chapter 11 Reorganization Under the Bankruptcy Code unless you’re in charge of a municipality or a corporation. Most often, individuals use the following options:
- Chapter 7. Liquidation Under the Bankruptcy Code – it works almost for anyone who earns less than the median state income and passes the means test. Although this option implies property liquidation, you can use exemptions to save your property in 95% of cases.
- Chapter 12. Family Farmer Bankruptcy or Family Fisherman Bankruptcy – this one speaks for itself.
- Chapter 13. Individual Debt Adjustment – lets you discharge a large part of your debt but still requires you to pay out a part of it based on how much you are able to pay. By choosing this type instead of Chapter 7, you protect your property if it’s not covered by the Chapter 7 exemptions.
- Chapter 15. Ancillary and Other Cross-Border Cases – help foreign debtors to get debt help from outside the US.
Steps to File for Bankruptcy
Here is a brief list of steps you have to undertake to file for bankruptcy in 2021:
- Collect your financial documents – if you are employed, get the pay stubs for the last 6 months (or another proof of income), income tax returns for the last 2 years, a credit report, and a statement from your bank, retirement or brokerage account statements, vehicle registration copy, any documents related to your debts, income, and assets.
- Take credit counseling – do it 6 months before their bankruptcy petition is filed with the court if you are filing Chapters 7 or 13. You can wave the fee and have to keep the completion certificate.
- Fill out bankruptcy forms and print them – these forms are called a bankruptcy petition, and you can fill them out yourself or hire a specialist.
- File your bankruptcy forms with the bankruptcy court – you can do it either in person or electronically, depending on the options provided by your court. Your lawyer can do it for you as well.
- Pay the filing fee – you can either pay it as requested or apply to pay it in installments.
- Mail the documents to your trustee – court-assigned trustees have the right to request all the documents you filed to the court to oversee your case.
- Take Bankruptcy Course 2 – you are required to take a debtor education course online, by phone. File the certificate with the court.
- Attend Your 341 Meeting – this meeting usually lasts only 5-10 minutes and can be attended online during the pandemic. The agent will need to verify your identity, so don’t forget to take your ID and Social Security card.
- Get your discharge letter – if you do everything right, the letter will come in 2-3 months after the meeting.
Take Your Time
Filing for bankruptcy is a long process that can make everyone feel very nervous. Try to look at it as an opportunity to start a new, better life and do everything correctly. The result will significantly simplify your life. Good luck!
