How to Prepare for Filing a Chapter 7 Bankruptcy

This guide is meant for those deep in debt who are interested in the option of filing a Chapter 7 bankruptcy.

Payment of debts

Do not pay more than your normal balance due on any debt in the six months before you file. Otherwise this may be looked at as preferential treatment of a creditor. You may choose to discontinue paying your unsecured (credit card debt not secured by real property) altogether.

Keep all Collection letters

Make a detailed diary of collection calls and contacts by collection agencies including dates, times and names. This will be useful for a number of reasons, least of all of which is protecting your federal rights not to be harassed by collectors.

DO NOT PURCHASE LUXURIES

Please do not go out and buy a new stereo system or a flat panel plasma television! This is detrimental to your ability to file and your money is better used to pay for the necessities of life, ie. food, housing, clothing, medicine. If you make purchases with the expectation of filing bankruptcy this is abuse of the bankruptcy process and you can be prosecuted. Again, do not purchase with the intent of discharging in bankruptcy

Gather your documents

People often file bankruptcy without preparing which results in problems recovering documents that a trustee demands. The trustee can determine whether your bankruptcy will receive a discharge. If you are unable to comply with the trustee you may not get your discharge. You should gather at a minimum the following: 1. Last two years of state and federal tax returns 2. the last six months of paystubs for all employment 3. a Profit/loss statement if you own your own business 4. your credit reports (preferably all three or four bureaus) 5. your social security card and drivers license 6. bank statements for the last six months. 7. an appraisal or comparative market analysis of your house 8. a title report showing what liens are on your property and copies of your deed and mortgage 9. paperwork from any real property transaction in the last two and a half years. 10. credit bills for the last 6 mos

Credit Counseling Class

As of October 2005, the BAPCPA (new bankruptcy law) requires all debtors to take a class on credit. This must be taken within six months of filing the bankruptcy. Your lawyer can help you sign up for this course. It can be taken by phone, by internet or by paper.