DIY Bankruptcy - How to file for bankruptcy on your own
Pre-filing bankruptcy process - Steps you need to take
Step 1Go through the Notice to Consumer Debtors.
- You can hire a bankruptcy attorney if you can afford it.
- 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 available to consumers and business owners.
- You have to speak the truth in your bankruptcy paperwork.
- Hiding properties or making small false claims is a bankruptcy crime.
- You can be imprisoned or fined for committing a bankruptcy fraud.
Step 2Check out your credit reports.
- Get free copies of your credit reports from annualcreditreports.com.
- Get copies of your Experian, Equifax, and Transunion credit reports.
- Get copies of your credit reports either in the mail or online.
Step 3Calculate how much you owe and to whom.
- 1Check your credit report and 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 mention the status of your accounts’ in the written statement.
- 4Send a letter to your creditors and debt collectors if you cannot contact them over the phone.
- 5For court judgments, request the court to issue a written statement mentioning the current balance.
- 6Collect the latest copies of the court order when you owe or alimony child support. Also, collect the latest statement from the child support collection agency.
- 7List all your debts accurately. Make sure you include even those debts that are not there in your credit report. So it is better to get the latest financial statement from your creditors or debt collectors.
Do not calculate your debt amount based on the information you get from your credit report only. Credit reports may not contain the latest information. Some creditors, like landlords, doctors, and utility companies do not report to the credit bureaus. So, it is best to calculate your debt amount based on the written statements you received 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.
Compute your median income
Average gross monthly income (Pre-tax) for last 6 months:
Median income test result
If you know your annual income, then you can divide it by 12 to get your average monthly income.
If you are paid every two weeks, then just double the amount of your paycheck.
Net income | |||
---|---|---|---|
You | Your spouse | Total amount | |
Gross wage and commissions | $ | $ | $ |
Estimated overtime pay | $ | $ | $ |
Subtotal 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 |
- Put your total monthly income and your annual income in the form. Make sure you do not change the figure just to match your W-2s or tax returns.
- Mention the name of your state and the number of people in your household.
- Find out the state median income of different household sizes.
- Find and put down the state median income for a household of your size.
- Acknowledge in the form that there is no presumption of abuse.
- Put your signature and date in the form.
Step 5Determine the type of bankruptcy you can file.
Step 6Go through the counseling session.
Step 7File your income tax returns.
Step 8Organize your financial documents.
- 1Documents for a real estate property, which includes land. Submit copies of the mortgage, deed, and declaration of homestead.
- 2Copies of federal income tax returns.
- 3Documents for any boat or vehicle you purchased with an auto loan.
- 4Copies of your life insurance documents.
- 5Copies of your loan agreements, bank statements, credit card statements, and investment account statements.
- 6Copies of stocks and bonds that you own.
- 7Documents for any mobile home you own.
- 8Documents for retirement plans.
- 9Copies of loan applications you made in the last two years.
- 10Copies of your divorce decree received in the last two years.
- 11Copies for vehicle titles of trailers and motorized vehicles.
- 12Documents for vehicles that you own. Include documents for vehicles that you have sold, or that lenders have repossessed in the last four years.
Should | 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 |
Step 1: Complete your bankruptcy paperwork.
You have to fill out the required bankruptcy forms to the best of your knowledge and submit them to the court.
- Housing -Rent, home renovation, 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 -Monthly expenses of owning and operating the rental property, monthly expenses for business, etc.
- 1 Real properties, timeshares, your home, and other real properties.
- 2 Motor vehicles you own.
- 3 Your checking account balance
- 4 Household goods like appliances, furniture, computer, audio, and video equipment, etc.
- 5 Jewelry
- 6 Cash value of life insurance
- 7 Stocks, bonds, and other investments
- 8 Firearms
- 9 Art objects
- 10 Items you have collected as a hobby
- 11 Interests in any trusts
- 12 Business interests
- 13 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.
- 14 Patents and copyrights.
- 15 The money you will get as an inheritance.
- 16 Tools and instruments used at work.
- 17 Any office equipment that you have not included in your business inventory and household goods.
Names and addresses of debt collectors
Name and address of the court to whom you owe money
Name and address of the co-debtor who has not filed bankruptcy with you
Account numbers
This is called the Creditor Matrix.
Instruction:
Type all the details in capital letters on a blank form.
Type your name and contact details in a single column on the left side.
Leave one-inch space at the upper and lower part of each page.
Do not insert page numbers.
Mention the mailing addresses of all the creditors under their names.
Do not provide any other information apart from your name and mailing address.
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 ($)
Title loans - Amount ($)
As soon as you create and submit the Creditor Matrix, the court will inform creditors and others mentioned in the list that you have filed bankruptcy.
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.
- You can surrender the property used as the collateral for secured debts.
- You can retain the property used as collateral for secured debts.
If you want to retain the property, then inform the court how you are planning to pay off secured debts.
You have three choices.
Step 2: Submit your bankruptcy petition.
Step 3: Handle your creditors in the 341 meeting.
- Have you listed all your assets accurately?
- Do you have non-exempt assets that can be sold to pay off your debts?
- Have you transferred any property before filing bankruptcy?
Step 4: Complete the Personal Financial Management course.
Step 5: Act as per the bankruptcy court’s instructions.
Step 6: When you should get help from the lawyer.