If you experience overwhelming debt, Chapter 13 bankruptcy can help you re-balance your finances. Unlike Chapter 7 bankruptcy that requires you to sell assets to pay back creditors, Chapter 13 allows you to keep your property and create a repayment plan for your debts. Although Chapter 13 bankruptcy can be a formidable process, people with few investments, only a small amount of business income or other relatively uncomplicated financial situations can file pro bono, or without a lawyer. However, without the assistance of a lawyer, you must be extremely diligent about completing the forms correctly and reporting accurate information.
Instructions
1. Assemble the documents you will need to complete the bankruptcy petition. This includes copies of bills and statements from your creditors, a list of your monthly household bills and expenses, bank and investment account statements and six months of pay stubs. Self-employed filers must provide two years of tax forms and financial statements. Retirees must provide pension or retirement benefit statements.
2. Attend a credit counseling course that has been approved by your state's bankruptcy court. Federal law requires filers to take the course within 180 days of submitting the bankruptcy petition. Each bankruptcy court maintains a list of approved credit counselors on its website.
3. Download the bankruptcy petition documents from your bankruptcy court's website or the U.S. Courts website (see Resources).
4. Use the documentation you gathered to complete each sheet, referred to as a schedule. Report all income from every source, even Social Security or other government assistance. List your monthly household expenses, such as rent or mortgage payments, utilities, groceries and medical expenses. Include each creditor's name, your account number and account balance. You must list all creditors, even if you are not including those debts in your bankruptcy.
5. Complete the means test included in the bankruptcy petition to ensure you are eligible to file Chapter 13 bankruptcy. Federal law requires people who file Chapter 13 to have an annual income above their state median. If you earn less than your state's median income, you must file Chapter 7.
6. Create a three-to-five year payment plan to repay the debts you included on the bankruptcy petition. You must pay off priority debts first. These include nondischargable debts such as child support and taxes, as well as secured debts such as overdue mortgage and auto loans. You must include as much of the non-priority debt as possible, but the court will discharge any remaining debts at the end of the repayment plan.
7. Submit the completed petition to the bankruptcy court in your jurisdiction. You must pay a filing fee of $274, as of the time of publication. Pro bono bankruptcy filers must pay by cash or money order.
8. Ask the court clerk for the date and time of the 341 meeting. This is a meeting of creditors in which the court-appointed trustee and any creditors who wish to appear can ask questions about your financial situation and verify the information on your petition. The date is about six weeks from the day you file.
9. Attend the 341 meeting. You will be placed under oath and must answer all questions for the trustee and any creditors honestly and fully. Usually, the trustee only asks few questions to ensure accuracy and creditors do not attend. However, is it still a mandatory part of the bankruptcy process, and failure to appear can cause the judge overseeing your case to dismiss your petition, leaving you responsible for your debts.
Tips Warnings
Contact a legal aid organization in your area if you need help completing any of the bankruptcy paperwork.
Be accurate and never leave out any assets or you could lose the assets.
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