If you need relief from debt and a fresh start in life, filing a petition for Chapter 7 or Chapter 13 bankruptcy may be the answer for you. Before rushing to the courthouse to file your petition, there are some actions you can take to make the process smoother and avoid pitfalls.
1) File tax returns. For Chapter 7, you will need to submit your tax returns from the two years prior to the date you file your bankruptcy petition. For Chapter 13, the previous four years are required. The trustee may ask for more tax information.
2) Assemble documentation of your debts. Obtain your credit reports from all three reporting agencies so that you have a complete list of your creditors. All creditors must be listed and the amount you owe them in order for the debt to be discharged. Debts owed to creditors who are not listed will not be discharged even if it is the type of debt that would normally be discharged.
3) Gather together your necessary paperwork. Certain documents called schedules must be filled out and filed with your bankruptcy petition. Information that must be included is:
- Account numbers of each creditor, the amount you owe along with their names and addresses.
- Account information of all savings and checking accounts.
- List of all of your assets from jewelry to your house. Include the value of the assets and what your equity in them is.
- List of all your monthly expenses.
- Review to be sure you have not left any asset or liability off of your list.
4) Stop using your credit cards 90 days before filing. Any charges you made in the 90 days prior to filing may be considered fraudulent. Creditors may claim that when you charged items to the card, you were planning to file for bankruptcy and had no intention of paying the debt. The debts may not be discharged and you may also face prosecution for fraud.