DIY Bankruptcy - How to file for bankruptcy on your own

You can file bankruptcy without an attorney, which is also called “filing pro se.” The term “pro se” simply means “without an attorney.” Here’s how you can do it.

The Bankruptcy Process - Before You File

Follow these steps to prepare yourself to file bankruptcy.

Step 1Read the Notice to Consumer Debtors

It provides key information like:

You should attend a credit counseling session 180 days before filing bankruptcy.
You have to complete a financial management course after filing bankruptcy.
Different types of bankruptcy are available to consumers and business owners.
You have to be truthful in your bankruptcy paperwork.
Hiding property or making false claims in a bankruptcy filing is a crime.
You can be imprisoned or fined for committing bankruptcy fraud.

Step 2Get your credit reports

Get free copies of your credit reports from annualcreditreports.com.
Make sure to get copies from all three reporting companies: Experian, Equifax, and Transunion.
Get copies of your credit reports either in the mail or online.

Step 3Calculate how much you owe and to whom

1Use your credit reports to make a list of your creditors and debt collectors.
2Ask your creditors or debt collectors to send you a written notice confirming the amount you owe to them.
3Ask secured creditors or debt collectors to disclose the status of your accounts in the written statement.
4Send a letter to any creditor or debt collector you cannot reach by email or phone.
5For court judgments, request the court to issue a written statement disclosing the current balance.
6If you owe alimony or child support, get the most recent copy of the court orders. Also, get the latest statement from the child support collection agency.
7Get the most recent statements from your creditors and debt collectors - especially ones that aren’t listed on your credit reports. Make sure to list all your debts accurately in the filing documents.

Table of contents

The Bankruptcy Process - Before You File
What you should or shouldn’t do before filing bankruptcy
The Bankruptcy Process - Filing
When DIY Bankruptcy is a Bad Idea

Tips

Don’t calculate your debt amount based on the information you get from your credit reports without checking them against your most recent statements. Credit reports may not contain the latest information. Some creditors, like landlords, doctors, and utility companies do not report to credit bureaus. So it is best to calculate your debt amount based on the written statements you receive from your creditors or debt collectors.

Make sure you list any loan that you have taken out from a friend or a family member.

Step 4Conduct the 'means' test

The means test shows if you qualify for chapter 7 bankruptcy. Here’s how you do it: Get the three forms you need to conduct this test. File 22A–1 form to report your monthly income for the last 6 months. The information in this form will determine your net monthly income and compare it with the state median income for households of the same size. If your income is below the state median income, you don't have to fill out the second form. The other forms that you may have to fill out are 22A-1 Supp and 22A-2; you will know if you need to file these forms if form 22A-1 instructs you to.

Bankruptcy forms you need for means test

For Chapter 7 Bankruptcy

For Chapter 13 bankruptcy

For Chapter 11 bankruptcy

B 122B - Chapter 11 Statement of Your Current Monthly Income

Income calculation

Look at all your sources of income to arrive at the correct figure. Possible sources include:

Your paycheck

Previous year’s income tax return

Any alimony you receive

Overtime pay and commissions

How to calculate your income

If you know your annual income, you can divide it by 12 to get your average monthly income.

If you are paid every two weeks, just double the amount of your paycheck. That will be your average monthly income.

Income and expenses Worksheet

    
         Net income 
        
        You
        Your spouse
        Total amount
      
        Gross wage and commissions
        $
        $
        $
      
        Estimated overtime pay
        $
        $
        $
      
        Gross income
        $
        $
        $
      
        Payroll Deductions
Payroll tax and Social Security 
Insurance 
Union dues 
Pension contribution 
Repayments on a personal loan
Support payments deducted from the paycheck
Other payroll deductions 
Subtotal of payroll deductions
        $
        $
        $
      
        Take-Home Pay
Retirement income 
Gross income from rental properties 
Social Security and other government assistance 
Gross income from business 
Tax refund
        
        $
        $
        $
      
        Other income
        
        NET INCOME

Net income
Gross wage and commissions	$	$	$
Estimated overtime pay	$	$	$
Gross income	$	$	$
Payroll Deductions Payroll tax and Social Security Insurance Union dues Pension contribution Repayments on a personal loan Support payments deducted from the paycheck Other payroll deductions Subtotal of payroll deductions	$	$	$
Take-Home Pay Retirement income Gross income from rental properties Social Security and other government assistance Gross income from business Tax refund	$	$	$
Other income
NET INCOME

Completing the Forms

Include both your total monthly income and your annual income. Don’t change the figure just to match your W-2s or tax returns.
Include the state you live in and the number of people in your household.
Include the state median income for the different household sizes listed.
Include the state median income for a household of your size.
Acknowledge in the form that there is no presumption of abuse.
Sign and date the form.

Important

Provide the details of your employment in the form:

Your job

Employer’s name and mailing address.

How long you’ve worked there

Forms you need to declare your income and expenses

Step 5Determine the type of bankruptcy you can file

The means test will give you an idea of what that is. If your income is above the state median, you can still try to file for Chapter 7 bankruptcy, but the court is likely to instruct you to file Chapter 13 bankruptcy instead.

Forms you need to file bankruptcy

For Chapter 7

For Chapter 13

Step 6Get counseling

Before you file for bankruptcy, you must attend a credit counseling program from a court-approved credit counseling agency. You can get a list of court-approved credit counseling agencies directly from the Department of Justice. You can attend the counseling session online, in-person, or over the phone, but you have to show the bankruptcy counseling certificate to the court. Make sure you collect it after attending the session!

Step 7File your tax returns

Before you file for bankruptcy, make sure you file your income tax returns. The bankruptcy court may not agree to discharge your debts unless your tax status is up to date with the IRS and your state’s tax collection agency.

Step 8Organize your financial documents

Gather all the documents that you need to submit to the bankruptcy court and the trustee. Here are some of the documents you may need:

Documents for a real estate property, which includes land. Submit copies of the mortgage, deed, and declaration of homestead, as appropriate.
Copies of your federal income tax returns.
Documents for any boat or vehicle you purchased with a loan.
Copies of your life insurance documents.
Copies of your loan agreements, bank statements, credit card statements, and investment account statements.
Copies of stocks and bonds that you own.
Documents for any mobile homes you own.
Documents for retirement plans.
Copies of loan applications you made in the last two years.
Copies of your divorce decree received in the last two years.
Copies for vehicle titles of trailers and motorized vehicles.
Documents for vehicles that you own. Include documents for vehicles that you have sold, or that lenders have repossessed, in the last four years.

What you should or shouldn’t do before filing bankruptcy

    
        You Should 
        You Shouldn’t
      
        Avoid getting married or divorced
        Take out a new loan
      
        Avoid selling precious assets
        Ignore lawsuits
      
        Avoid making a huge contribution to pension funds
        Contact creditors who have no idea of how to contact you
      
        Avoid leaving your job
        Transfer your property to protect it
      
        Read bankruptcy laws
        Try to sell your property

You Should	You Shouldn’t
Avoid getting married or divorced	Take out a new loan
Avoid selling precious assets	Ignore lawsuits
Avoid making a huge contribution to pension funds	Contact creditors who have no idea of how to contact you
Avoid leaving your job	Transfer your property to protect it
Read bankruptcy laws	Try to sell your property

The Bankruptcy Process - Filing

Everything up to this point was to prepare yourself so that filing your bankruptcy is as painless as possible. Once you’ve taken the above steps, you’re ready to start the process of filing for bankruptcy. Here’s what you need to do next.

Step 1Complete your bankruptcy paperwork

You will need to fill out the required bankruptcy forms to the best of your ability and submit them to the court. Here’s how:

1 Income and Expenses

We have already discussed income in the means test section, above. Now, let's talk about the average monthly expenses that you will need to disclose on Schedule J.

Expenses

Expenses include the following:

Housing Costs: rent, home renovations, furniture purchases, property taxes, etc.
Utilities: cable TV, water, and phone bills.
Food: groceries and eating out.
Clothing: new clothes and laundry.
Medical: medicines, doctors, eyeglasses, and others.
Transportation: gasoline, public transportation, licensing, parking, maintenance, and others.
Debts: credit cards, student loans, auto loans, and others.
Tax: estimated tax payments, the tax you pay at the time of filing annual tax returns, back taxes, and others.
Entertainment: gifts, cell phones, movies, sports events, Internet, events, pet expenses, vacations, etc.
Insurance: auto, health, life, homeowners, and other insurance policies.
Personal items: haircuts, beauty products, health club memberships, etc.
Vices: gambling, tobacco, alcohol, etc.
Child support and alimony: child support payments and alimony.
Children: daily allowance, daycare, toys, gifts, tuition, any money you give to adult children, etc.
Education expenses: Supplies, books, tuition, etc.
Miscellaneous expenses: charitable contributions.
Business expenses: the monthly expenses of owning and operating the rental property, monthly expenses for business, etc.

Note

The sum total of all your expenses in different categories will be your total expenses. Please do not include expenses that are deducted from your paycheck.

2 Determine your assets

These include:

Real properties such as timeshares, your home, and any other real estate you own.
Motor vehicles you own.
Your checking account balance
Household goods like appliances, furniture, computers, audio and video equipment, etc.
Jewelry
The cash value of any life insurance you have
Stocks, bonds, and other investments
Firearms
Art objects
Items you have collected as a hobby
Interest you have in any trusts
Business interests
The money you are yet to receive as part of your alimony and support, bonuses, commissions, tax refunds, claims where you can sue someone, accounts receivable, etc.
Patents and copyrights.
The money you will receive as an inheritance.
Tools and instruments used at work.
Any office equipment that you have not included in your business inventory or household goods.

Forms you need to declare your assets

3 List your creditors and the debt you owe them

You must list your priority debts and unsecured debts on Schedule E/F. You can list your secured debts on Schedule D and your Statement of Intention. Make sure you list all your creditors on Schedules D, E, and F.

Creditors

Next, you’re going to make a mailing list for the court containing the following information:

The names and addresses of your creditors.
The names and addresses of debt collectors who have attempted to collect a debt from you.
The name and address of any court to whom you owe money.
The name and address of any co-debtor who has not filed bankruptcy with you.
Your relevant account numbers.

Once you’ve gathered all that information, the next step is to put it all together in what’s called a creditor matrix.

Putting Together Your Creditor Matrix

Here's how:

Open a blank page in the word processor of your choice.
Type your name and contact details in all capital letters in a block on the left side of the page. Do not include your mailing address.
Set one-inch margins at the upper and lower parts of each page.
Do not insert page numbers.
Using all capital letters, list the mailing addresses of all the creditors under their names.
Do not provide any other personal information apart from your name, your mailing address, and the information listed below.
List your debts by amount owed, as follows.

Debts

Priority Debts
Judgments for injury or death - Amount ($)
Income tax - Amount ($)
Child support - Amount ($)
Alimony - Amount ($)

Unsecured debts
Credit card debts - Amount ($)
Loans - - Amount ($)
Medical bills - Amount ($)
Student loans - Amount ($)
Fines and restitution - Amount ($)
Utilities - Amount ($)
Overdue rent - Amount ($)
Gambling debt - Amount ($)
Mortgage after foreclosure - Amount ($)

Secured debts
Mortgage - Amount ($)
Auto loans - Amount ($)
Second mortgage - Amount ($)
Judgment liens - Amount ($)
Title loans - Amount ($)

Additional Instructions

List each creditor only once, even if you have several accounts with them. Do not include your mailing address or your spouse’s mailing address in the creditor matrix.

As soon as you create and submit the creditor matrix, the court will inform creditors and other entities you have listed that you have filed bankruptcy.

Sign the verification of the creditor matrix

After you have created your creditor matrix, you must sign the verification. That’s the part where you affirm to the court that all the details are correct. If you are filing for bankruptcy with your spouse, then make sure both of you sign the form.

Forms you need for creditors and your debts

4 Fill out the statement of intention

Download the Statement of Intention form. It contains two parts. The first one is the Schedule D, and the second one is the Schedule G.

If you have secured debts, then use the Statement of Intention form to inform the bankruptcy court about what you want to do with them and the collateral.

You have two options.

1You can surrender the property used as the collateral for secured debts.
2You can retain the property used as collateral for secured debts.

If you want to retain the property, you must still pay off the debt, and you must then inform the court how you intend to do that.

You have three ways to go about that.

1 Retain and redeem: You make a lump sum payment to the creditor. You must pay the debt in full, with one possible exception: if your outstanding balance is more than the fair market value of the property, you can choose to redeem it. That means you pay the fair market value of the property, but not the amount in excess. Your debt will be discharged after making the lump sum payment.
2 Retain and affirm: You can inform the court that you will make payments to the lender under a new loan agreement. You can keep the same loan agreement, too. However, if you miss payments, the lender will be able to foreclose on your property.
Forms you need for reaffirmation
3 Retain the property by working out a payment plan with the lender: You can keep making payments to the lender and retain the property. The lender may agree or reject your proposal.

Step 2Submit your bankruptcy petition

After you have gathered and completed your paperwork, you can submit your Chapter 7 bankruptcy petition to the court after paying the $335 bankruptcy filing fee. The clerk of court will schedule your bankruptcy petition, and the U.S. Bankruptcy Court will appoint a trustee to monitor your case. In the case of Chapter 7 bankruptcy, the trustee will sell your non-exempt properties and use the proceeds to pay off your debts. Check out the state exemptions to see what properties you can protect from bankruptcy. Usually, you can keep your primary home, essential clothes, vehicles, pensions, etc.

Forms you need to submit your petition

Step 3Handle your creditors in the 341 meeting

The trustee will organize a creditors meeting within 40 days of submitting a bankruptcy petition. You will have to answer questions in this meeting under oath. Make sure you attend this meeting, as this is where the bankruptcy trustee will try to work out a solution with your creditors.

Here are some of the questions you might face:

Have you listed all your assets accurately?
Do you have non-exempt assets that can be sold to pay off your debts?
Did you transfer any property to another party before filing bankruptcy?

Forms you need for creditors meeting

Step 4Complete the Personal Financial Management course

You must complete a personal financial management course within 45 days of the creditors meeting. The bankruptcy trustee can give you a list of approved organizations that offer this course. Once you have taken this step, the trustee will start discharging your debts one-by-one after selling your non-exempt assets.

Forms you need for Financial Management Course

B 423 - Certification About a Financial Management Course

Step 5Follow the bankruptcy court’s instructions

The court will ask you to do certain things to discharge your debts. The whole process takes several months to complete. Follow the court’s instructions. Do not hide anything or try to manipulate the court to avoid the dismissal of your bankruptcy case. That’s not likely to end well.

Step 6When should you get help from a lawyer?

If the means test excludes you from filing chapter 7 bankruptcy due to your high state median income, then you can file chapter 13 bankruptcy. However, in that case, it is better that you consult an attorney, as Chapter 13 bankruptcy laws are much more complicated than chapter 7. Moreover, you will have to deal with the court for 3 to 5 years, and that is a tough task.

When DIY Bankruptcy is a Bad Idea

When it’s chapter 13. Chapter 13 bankruptcy takes 3 to 5 years to complete. It’s that much more complicated than chapter 7. You will have to research complex bankruptcy laws, fill out numerous forms correctly, and make all the necessary decisions. The court will appoint a trustee for you, but the trustee cannot give you any legal advice. A single mistake could lead to the dismissal of your entire bankruptcy case.

Here are some other reasons a DIY bankruptcy may not be a feasible option:

You may file bankruptcy under the wrong chapter.
You may not be able to fill out the bankruptcy forms.
You may choose inaccurate property exemptions.
You may not be able to navigate the bankruptcy process on your own.

Updated on: May 12, 2021