How do I file for bankruptcy?

A bankruptcy case can be filed without an attorney. However, the United States Courts strongly recommend seeking the advice of a qualified attorney because bankruptcy has long term financial and legal consequences.

There are two main types of bankruptcy. Chapter 7 and Chapter 13. Chapter 7 is called a liquidation bankruptcy; it is the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors. Chapter 7 is more common. Chapter 13 provides for adjustment of debts of an individual with regular income. Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.

Before filing you should familiarize yourself with the United States Bankruptcy Code and the Federal Rules of Bankruptcy. There are also important state rules that come into effect for the state you are filing and local rules of court where the case is filed. For example, if you file bankruptcy in California you should familiarize yourself with California’s bankruptcy exemptions.

Bankruptcy is generally form based. Bankruptcy forms are free to the public. Many courts require the use of local forms. An important first concept of bankruptcy is where to file the case. Bankruptcy cases cannot be filed in state courts; federal courts have exclusive jurisdiction over bankruptcy. Next, it is important to determine the appropriate venue — or the correct federal court location to file in. Generally, most bankruptcy cases start with the debtor filing a petition with the proper bankruptcy court venue. The debtor must also file statements listing assets, income, liabilities, and the names and addresses of all creditors and how much they are owed. Filing the petition automatically prevents debt collection actions against the debtor and the debtor’s property for a time. So long as the stay remains in effect, creditors cannot bring or continue lawsuits, make wage garnishments, or even make telephone calls demanding payment. If creditors violate this automatic stay there can be serious repercussions for the creditor.

There are some file preparation services that exist to assist persons who file bankruptcy on their own. However, debtors should be aware that these services can only enter information into forms. They cannot provide legal advice or help explain answers to any legal questions you have about bankruptcy. A licensed bankruptcy attorney, on the other hand, can give you legal advice and represent you in bankruptcy court.

About the author: Matthew W. Camphuis is an attorney licensed by the California State Bar and the Central District Court. He focuses on IRS tax debt controversy, IRS tax audit defense, California State Tax Controversy, chapter 7 bankruptcy, and wills and trusts. His office is located in Ontario, California and he serves the Inland Empire and High Desert communities in Southern California.

This post is intended to convey general information and should not be considered legal advice.

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