DIY bankruptcy filing entails engineering your own bankruptcy paperwork and filing. Since bankruptcy filing procedures differ from state to state, the first thing you need to know are the exact laws in your state. However, the basic steps should be fairly similar for both Chapter 7 and Chapter 13 bankruptcy.
The first step in DIY bankruptcy preparation is preparing the documents to file the bankruptcy petition. Bankruptcy documents are very complicated and lengthy – some in excess of 100 pages. The documents must be filled out and filed with the U. S. District Court, Bankruptcy Division, in your area. You will be asked to pay a filing fee. This is around $200. If you file a waiver and it is approved you will be exempt from the filing fee.
In terms of bankruptcy law a court trustee will be assigned to you. Their role is to oversee the liquidation of assets, review documents, and protect the rights of the creditors. If you are intent on a DIY bankruptcy and do not want to hire an attorney, you might consider the services of a paralegal to help you prepare the documents. Even one error can be very costly and result in having to redo the paperwork.
Bankruptcy courts are very rigid and will reject any paperwork that has been poorly filled out. You will then have to resubmit your filing. What about bankruptcy law liquidation exemptions in your DIY bankruptcy filing?
These are liquidation exemptions of property. They may allow you to keep your home, a car, personal clothing and some items of household furniture. You will find Schedules within the bankruptcy documents where these items may be listed along with an approximate value. Make sure that you list them when you do a DIY bankruptcy filing.
As part of your DIY bankruptcy you have the option to reaffirm a debt on which you have filed. If you have signed legal documents stating that you will pay the debt after the bankruptcy you can reaffirm this. You might want to reaffirm a mortgage on your home if you are claiming exemption for the home.
If you do claim an exemption on property that has a secured loan against it like a car or house) you must reaffirm the debt on that property in order to qualify for the exemption. Your DIY bankruptcy filing must include this information.
Certain states allow for homestead exemptions that mean you can retain your home, other states limit the exemption and some don’t make provision for homestead exemptions. You can find a list of exemptions using the Map of Districts. Make sure that your DIY bankruptcy filing offers protection for your vital assets.
After the paperwork has been accepted by the court your creditors will be notified. Once all your creditors are aware of your bankruptcy filing a meeting will be held. This is known as a “meeting of creditors”. At the meeting any creditors who wish to question you may do so. They can also object to your filing if they wish to do so. You need to be prepared to field questions as part of a DIY bankruptcy.
