What do I need to do to file for bankruptcy?

If you are an individual filing for bankruptcy relief, you are required to take a budget and credit counseling course from an agency that has been approved by the United States Trustee's Office before you file. It is a "gatekeeper" provision that is required under section 109 (h) of the Bankruptcy Code. If you do not take the course, your bankruptcy petition is jeopardy of being dismissed because you will be deemed ineligible to be a debtor. This course will review your budget with you and review your possible options. The course is offered online and takes between 60 to 90 minutes. Depending on the agency, the cost of the course varies between $15- $30. After you complete the course, you will receive a certificate of completion. You must complete the course within 180 days or six months before you file the petition. So, if you take the course and decide to wait to file and do not file until seven months later, you will be required to take the course again. Besides taking the initial credit counseling course, you will need to get many financial documents together. The bankruptcy petition contains schedules, statements and declarations that relate to your assets, debts and finances. These are official forms that need to be completed. The schedules of your bankruptcy petition will require you to list all of your assets, liabilities, monthly income and expenses. You will also need to answer questions regarding your finances on the statement of financial affairs. In addition to completing the official bankruptcy forms, you will be required to supply certain documents to the trustee appointed to oversee your bankruptcy case. First, you will certainly need to provide the trustee with copies of your tax returns for the year prior to the filing. However, many trustees demand that you turn over several years of tax returns, so it is a good idea to gather the tax returns filed within the two to three years period before the filing. You will also need to complete a statement of currently monthly income which will require you to report the average monthly income of those in your household that contribute to the household expenses. This will require you to gather six months of your paystubs together your spouse's pay stub for the past six months prior to the filing. You will also need to assemble all of your bills and order a credit report so you can list all of your creditors on your schedules. You will have to do an inventory of all of your assets. If you own a home, you will need recent mortgage statements, a copy of your deed and an appraisal of your home. If you own a car, you will need a copy of the title, a car loan statement and an appraisal of your car. You will need your bank statements for period covering six months to a year before the filing. You will be required to provide IRA account statements, 401k statements, pension fund statements and investment statements. You will need a driver's license or government issued identification and a copy of your social security card. If you are self employed, you will need profit and loss statements for at least six months. Yes, that's a lot of documents. Depending on your financial circumstances, you may be required to submit more or less financial information. When you file a bankruptcy petition, you will be mandated to pay a filing fee. If you cannot pay the filing fee at the time of the filing, you apply to the Bankruptcy Court for permission to allow you to pay the fee in installments. There are some circumstances where you may apply to Bankruptcy Court to have the fee waived. Bankruptcy offers equitable relief. It provides you with an opportunity to wipe the slate clean and relieve you of the obligation to pay certain debts. However, only an honest debtor is entitled to this relief. To determine whether a debtor is "honest", the debtor is required to disclose all of his or her financial information. This is why the debtor is required to supply so much information. It can be quite intimidating. However, what you receive in return for the disclosure is relief and peace of mind.