Q: What are the requirements to file for Chapter 7

A: There are many different factors that determine if and what type of bankruptcy you may file. You really need to sit down with a bankruptcy attorney in your area and they will give you a free evaluation of your own unique situation.

A: Assuming your case will be what we call a "consumer" bankruptcy, you will have to pass the "means test", have the required credit counseling, and establish that your living expenses are reasonable, necessary and uses up all of your disposable income.

But there is an awfully lot more that has to be looked at, and there is no way to dig deeper without a complete analysis of a baker's dozen of other factors that may or may not apply to any particular case.

The best way to know what your really need to know, is for you to meet with a bankruptcy specialist. A modern bankruptcy case is no a do-it-yourselfer.

A: Are you having difficulty keeping up with your bills? Are you thinking how liberating it would feel if you could just call up a magic genie from a bottle and wish for no debt? Unfortunately, it's not quite that easy. But there are some federal laws that can help you manage or eliminate that debt. You may have seen references to Chapter 7 or Chapter 13, and you have no idea what either is, much less how they're different

Let's take a look at Chapter 7, the single most common type of bankruptcy filed in the United States. Chapter 7 is also called straight bankruptcy or liquidation bankruptcy. It's the type most people think about when the word "bankruptcy" comes to mind. In a nutshell, the court appoints a trustee to oversee your case. Part of the trustee's job is to take your assets, sell them and distribute the money to the creditors who file proper claims. The trustee doesn't take all your property. You're allowed to keep enough "exempt" property to get a "fresh start".

Preparation

Before a case is filed, you;ll have to gather all your financial records like bank statements, credit card statements, loan documents, and paystubs. You'll use that information to fill out the bankruptcy petition, schedules, statement of financial affairs, and other documents that will be filed with the court.

You can download copies for free from the website maintained by the US Courts. Your attorney will use bankruptcy computer applications to produce them.

Broadly, these documents include the voluntary petition for relief, the schedules of assets and liabilities, declarations regarding debtor education, and the statement of financial affairs.

These documents require you to open up your financial life to the bankruptcy court. They include a listing of all of property, debts, creditors, income, expenses and property transfers, among other things. Once completed, you'll file the documents with the clerk of your local bankruptcy court and pay a filing fee. If you're interested in finding your local court, visit the federal court locator page, choose "Bankruptcy" under "Court Type" and add your location in the bottom box.

Credit Counseling

Almost every individual debtor who wants to file a Chapter 7 case has to participate in a session with an approved credit counselor before the case can be filed. This can be in person, online or over the telephone. The rationale behind this requirement is that some potential debtors don't know their options. A credit counselor may be able to suggest alternatives that will keep you out of bankruptcy. You can get more information about this requirement on the website for the U.S. Trustee.

Means Test

A debtor must also successfully pass the means test calculation, which is another document that must be completed prior to filing for bankruptcy. This test calculates whether you are able to afford, or have the "means" to pay at least a meaningful portion of your debts.

The means test compares your income with the median income for your state. If you fail the means test, you can only file Chapter 7 bankruptcy under very specialized exceptions. Your alternative would be to file a Chapter 13 repayment plan case. You can learn more about the means test and the numbers used in the calculation from the U.S. Trustee website.

Meeting of Creditors

After a Chapter 7 bankruptcy is filed, the court will issue a document giving notice of a debtor's meeting of creditors. This notice is also sent to all of the creditors that are listed within the bankruptcy documents. During the meeting of creditors, the bankruptcy trustee will ask the debtor various questions about the bankruptcy, such as whether all of the information contained within the bankruptcy documents is true and correct.

A qualified bankruptcy will provide further important details of what the process involves.

A: Your question is much too broad for this forum. I agree with my colleagues that you need to meet with a bankruptcy attorney to get specific information, many of us offer a half hour no charge consultation which can provide you the basic information - then you can proceed from there.