How To File Bankruptcy - filing for personal bankruptcy

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Information on how to file bankruptcy

You've done all you can, but your debts have caught up to you and packs of creditors are hounding your life - is declaring bankruptcy the answer? Although it can be quite complicated, having a general idea of how to file bankruptcy before you begin will help you come through the process unscathed.

Once you decide to file for personal bankruptcy, there is a pile of paperwork you must complete and file in the judicial district where you live. No matter what type of filing you pursue, these bankruptcy forms require the same basic information - a comprehensive listing of all your property, money and debts, including a record of financial action over the past two years.

Once the paperwork has been filed, an automatic stay is put into effect. This relief measure prevents your creditors from forcibly collecting any debts you owe. They cannot take your wages, withdraw from your bank account, halt your welfare benefits or stop your utilities.

Now that you have officially declared bankruptcy, all your finances, property and debt are surrendered to the bankruptcy court.

The court now has legal control of everything, except for any exempt property you may claim. The court exercises its power through a court-appointed trustee, who is concerned solely with repaying your creditors as much as you owe them.

At this point you are called in for a mandatory creditors' meeting with your trustee and creditors. The trustee will go through the forms you filed and note all the property that may be sold to repay your debts. The trustee then sells, or liquidates, any property necessary to repay your creditors. It is possible to purchase property back from the trustee at fair market value, or to even exchange exempt property for non-exempt.

After filing for bankruptcy, you do have the saving grace of changing your mind, depending whether it was Chapter 7 or Chapter 13. You may request the court to dismiss your case, which the court will usually do unless that action harms the creditors. Keep in mind that you may file again, but you must wait a clearing period of 180 days to do so.

If you do complete the bankruptcy process, by the end of the procedure a majority of your debts will be cleared, as some are paid off and others are simply discharged by the court.

And if bankruptcy becomes necessary in the future, remember that you have to wait a period of six years from the date you filed in order to file again.