How to File Bankruptcy Step by Step

Step 1: Decide Whether Bankruptcy Is Right for You

Before filing, consider alternatives: debt consolidation, negotiation with creditors, credit counseling agency programs. Bankruptcy is powerful but has lasting consequences (7-10 years on credit report). It is the right choice when your debts are unmanageable and alternatives have failed or are unrealistic.

Step 2: Complete Credit Counseling

You must complete a credit counseling course from a UST-approved provider within 180 days before filing. Courses are available online, by phone, or in person. Cost: $10-50. Duration: 60-90 minutes. You will receive a certificate that must be filed with your petition.

Step 3: Choose Your Chapter

Chapter 7 -- Liquidation. Eliminates most unsecured debt in 3-6 months. Must pass the means test. Non-exempt assets may be sold.

Chapter 13 -- Reorganization. Repay some debts over 3-5 years. Keep all property. Requires regular income. Can cure mortgage arrears.

For a detailed comparison, see Choosing Your Chapter or chapter7vs13.org.

Step 4: Gather Your Financial Documents

You need: pay stubs (6 months), tax returns (2 years), bank statements (6 months), loan documents, vehicle titles, property deeds, mortgage statements, credit card statements, medical bills, and a complete list of everyone you owe money to. See our document checklist.

Step 5: Complete the Bankruptcy Forms

The official forms are available free from uscourts.gov. Key forms include the Petition (Form 101), Schedules A/B through J, Statement of Financial Affairs (Form 107), and the Means Test (Form 122A for Ch.7 or 122C for Ch.13).

Step 6: File Your Petition

File with the bankruptcy court in the district where you live. Pay the filing fee ($338 for Ch.7, $313 for Ch.13) or request a fee waiver or installment plan. The automatic stay takes effect immediately upon filing -- all collection, foreclosure, and garnishment must stop.

Step 7: Attend the 341 Meeting of Creditors

20-40 days after filing. The trustee asks questions under oath about your finances, assets, and petition accuracy. Usually 5-15 minutes. Creditors may attend but rarely do in consumer cases. See 341meeting.org for a complete guide.

Step 8: Complete the Debtor Education Course

After filing, you must complete a financial management course (different from the pre-filing credit counseling). Cost: $10-50. File the certificate with the court before discharge.

Step 9: Respond to Any Objections or Motions

Creditors or the trustee may file objections to your exemptions, motions to dismiss, or adversary proceedings. If you receive any court papers, respond by the deadline. This is where having an attorney matters most.

Step 10: Receive Your Discharge

Chapter 7: Approximately 60 days after the 341 meeting. Chapter 13: After completing all plan payments (3-5 years). The discharge permanently eliminates your liability on discharged debts.