What are the requirements for filing for bankruptcy in the US (Chapter 7)? What are the consequences of filing for bankruptcy?
In the US, the current bankruptcy law is known as The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). This law made it more difficult to file a chapter 7 bankruptcy, but the requirements are still relatively easy to meet. Chapter 7 bankruptcy is sometimes called straight or liquidation bankruptcy because it will generally result in the liquidation of your non-exempt assets.
These are the basic requirements:
-You must take a credit counseling course approved by the United States Trustee and filed the certificate with the bankruptcy court. The certificate must be obtained within 6 months prior to filing for bankruptcy
-You must pass the "Means Test" that determines whether you need to pay fees for certain types of debts (talk to a bankruptcy attorney to help you with this).
-If you owe money on taxes, you may need to make arrangements with the IRS or other taxing authority (remember, there are different types of taxes and categories of debts e.g. secured, unsecured, priority, etc.)
-You need to complete the petition, sign it and file it with the court.
-You need to completely fill out Bankruptcy Schedules A, B, C, D, E F, G, H, I and J. These need to be timely filed with the court.
-You need to completely fill out the Bankruptcy Statement of Financial Affairs. This needs to be timely filed with the court.
-You need to list all of your creditors and all of your assets.
-You need to attend and answer all of the trustee’s questions during the 341(a) hearing (also known as the first meeting of creditors).
-Then you need to take a post-bankruptcy filing class on how to manage your finances, called a debtor education class and file the certificate timely with the court.
-If you fail to do any of these timely, your case will likely be dismissed (thrown out of court).
Regarding your question about the consequences of filing bankruptcy - there are many, your credit score will be affected for the next 10 years - you may be subject to social shunning or embarrassment. It depends on your goals, plans, and desires and how you see yourself and the world as to the consequences. For these (and many other reasons), you should contact a bankruptcy attorney in your area to get a free consultation - this law firm does them regularly - good luck!
Ascent Law LLC
8833 South Redwood Road Suite C
West Jordan Utah 84088
(801) 676-5506
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