You’re buried under a mountain of debt and decided that you need to file personal bankruptcy. The first step after making the decision to file bankruptcy is to hire a bankruptcy attorney. It’ll be a lot easier to hire a bankruptcy attorney if you had a referral, but since the subject of bankruptcy filing is still taboo for many, that referral might be far-fetched. It’s still not hard to find a qualified bankruptcy attorney by using referral services like the Better Business Bureau. The bankruptcy attorney is going to ask their client to gather a bunch of information that will be required for the personal bankruptcy. Although it would be nice, the bankruptcy court won’t take your word for how much you made and what you own when filing bankruptcy. It’s a court of law and this means you will have to prove your case.
The bankruptcy attorney and their staff will ask the client to gather pay information, two years of taxes, two years of bank records and a complete list of all the client’s creditors. If the individual is trying to file Chapter 7 bankruptcy, the pay information will be needed immediately to make sure that the client qualifies to file Chapter 7. Ever since the bankruptcy code changed back in 2005 a debtor is now required to pass a means test to qualify to file Chapter 7 bankruptcy. The bankruptcy attorney will ask for proof of pay to make sure the debtor makes less than the median household income for their area. If the amount of income is close, the attorney will want to see a detailed household expense report such as insurance, medical needs, childcare, food, clothing, automobile expenses and housing. The reason for this is the court wants to make sure that the individual filing personal bankruptcy doesn’t have over $150 left over after paying all their household living expenses. This does not include the credit card bills that the individual is trying to wipe out in the Chapter 7 bankruptcy. After qualifying the individual to file personal bankruptcy, the bankruptcy attorney will use the rest of the information supplied by the client to complete the bankruptcy petition and file it with the court. The whole process will typically take about 4 to 6 months from filing to bankruptcy discharge.