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By the numbers — preparing for Chapter 7 bankruptcy

| Dec 4, 2017 | Blog |

You should go into Chapter 7 bankruptcy with your eyes wide open, which means plenty of organization and preparation.

Make sure you understand what your bankruptcy requires. When the time comes for you to file, you will be glad you took charge. Here are five steps to follow that will get you ready for Chapter 7 bankruptcy.

1. Credit counseling

If your financial picture includes at least 50 percent consumer debt, you must complete a credit counseling course either from an education source or a government-approved agency.

2. Engaging an attorney

Self-representation is not advisable simply because too many things can go wrong when you try to file by yourself. An experienced bankruptcy attorney will help you in many ways, including making sure you fill out all the necessary forms and devising a workable debt repayment plan.

3. The Means Test

Based on your income, the Means Test is a way to assess whether you qualify for filing Chapter 7 bankruptcy or if another form of debt relief would be better. You will file the Means Test along with your bankruptcy petition.

4. Completing paperwork

There will be forms and schedules to fill out, but the attorney you engage will complete these documents on your behalf. Be sure you do not intentionally leave out pertinent financial information. You could delay your filing or find your case dismissed altogether.

5. Listing creditors

One of your most important tasks will be to prepare a mailing list of your creditors so as to notify them of your bankruptcy. Once they have the information, they will prepare payment claims. They do not file the claims against you personally but rather against your bankruptcy estate, which includes property of yours that is being liquidated. Be sure you do not leave out any creditors; you could face charges of perjury.

Feeling better

You will reduce the stress of what can be an arduous process by being organizing and preparing beforehand. With an attorney by your side, you can file your Chapter 7 petition with confidence and anticipate turning the page to a brighter future.