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4 Steps To Take When Filing For Chapter 7 Bankruptcy

If you are overwhelmed by credit card debt and unpaid medical bills, you may want to consider filing for Chapter 7 bankruptcy. If you are unsure about filing for bankruptcy, you can be rest-assured that you are not alone. According the most recent bankruptcy statistics, about 800,000 people filed for bankruptcy in the year 2016. Of that number, a large majority of them (490,365) filed for Chapter 7.

To get you started in the process, here are four steps to take when filing for Chapter 7 bankruptcy.

Step 1: Get Your Financial Information in Order

Getting your financial information together will make the process of filing for Chapter 7 bankruptcy go much more smoothly for you. Some of the financial information you will need include:

  • A list of all the debts you owe
  • How much income you receive
  • A list of your assets
  • A list of your expenses

In order to file Chapter 7 bankruptcy, your income must be low enough to qualify. A bankruptcy lawyer can assist you in getting this information together.

Step 2: Receive Credit Counseling

After getting your information together and knowing whether or not you qualify to file for Chapter 7 bankruptcy, you will need to receive credit counseling. In most instances, you will need to do this 180 days before you formally file for bankruptcy.

Step 3: Attend Your 341 Hearing

You will have a trustee that gets assigned to your bankruptcy case. Your 341 hearing is essentially a meeting with your trustee. Your trustee will ensure that all your creditors get paid. Some of the things you will need to bring to this hearing include:

  • A photo ID
  • Proof of income
  • Recent bank statements
  • Your Social Security card

It's important to note that this meeting is not held in a courtroom and a judge will not be present.

Step 4: Complete a Debt Management Course

Before your debts are officially discharged, you will need to take complete a debt management course. The goal of this course is to help you better manage your finances so that you won't have to file for bankruptcy again in the future. You will learn things like how to set up a budget, how to use credit wisely, and how to deal with a financial crisis. You will also learn about certain consumer protection laws and agencies.

The entire process of filing for bankruptcy and getting relieved of your debts usually takes from 3 to 6 months and will stay on your credit report for up to 10 years.