Filing for Chapter 7 bankruptcy allows eligible individuals to discharge most unsecured debts and secure a fresh financial start. The process requires careful preparation and the submission of detailed information to the bankruptcy court. As such, it can be helpful to seek support with this process as proactively as possible if you need assistance resolving your overwhelming debts.
The process of applying for debt relief via Chapter 7 begins with the submission of a bankruptcy petition. This document serves as an official request for bankruptcy relief. Along with the petition, you’ll need to provide basic information about yourself, including your name, address and Social Security number. You’ll also need to disclose any prior bankruptcy filings and other personal details that can help the court identify you and your case.
Schedules and statements
The court also requires a detailed listing of your assets and liabilities. The court needs a complete picture of your financial situation before it can determine your eligibility for Chapter 7 and manage the distribution of any non-exempt assets to your creditors (unlikely, but possible). Your schedules of assets and liabilities include:
- Schedule A/B: A list of your real and personal property, including real estate, vehicles, household items, bank accounts, retirement accounts and any other assets you own.
- Schedule D: Details of secured debts, such as mortgages or car loans, wherein a creditor has a lien on a specific property.
- Schedule E/F: A listing of unsecured debts, including credit card debt, medical bills and personal loans.
Next, your Statement of Financial Affairs requires you to provide a comprehensive overview of your financial history over the past several years. This includes information about your income, recent payments to creditors, any pending lawsuits and any property transfers. The SOFA helps the court understand how you managed your finances leading up to the bankruptcy filing and helps to clarify whether you have engaged in any fraudulent activity to hide assets or defraud creditors.
The court will also require detailed information about your current income and expenses. This includes:
- Schedule I: A statement of your current income, including wages, bonuses, government benefits and any other sources of income.
- Schedule J: A breakdown of your monthly expenses, such as housing costs, utilities, food, transportation and other necessary living expenses.
Finally, you’ll need to submit a certificate of credit counseling completion with your bankruptcy petition to prove that you have fulfilled this requirement. This course helps ensure that bankruptcy is the right option for you and that you understand the implications of filing.
If you have any questions about these requirements, that’s okay. This is a complex process. Thankfully, personalized support is available at any time.