If you’re researching how to file for bankruptcy, then you’re likely in a financial situation requiring serious intervention. Before submitting the documents necessary to declare yourself bankrupt, you’ll need a plan to make the process as simple and painless as possible.
1. Learn About Bankruptcy and the Different Chapters
Before you learn how to file for bankruptcy, it’s important to know there are different chapters of bankruptcy in Florida. However, most people in St. Petersburg will likely file chapter 7 or 13. Chapter 7 eliminates most unsecured debts in a few months by giving up non-exempt property like houses or cars. Chapter 13 takes longer, usually a few years, but instead of relinquishing property, establishes a repayment plan to pay back the debt in monthly installments.
Certain citizens must complete a “means test” to establish which chapter of bankruptcy they qualify for. The calculation accounts for multiple aspects of the debtor’s financial situation, including income, and the amount of debt. If the debtor’s annual income is less than Florida’s median income for the size of their household, as long as the debtor meets other qualifications, they can generally choose chapter 7 or 13. If the income is higher than the median, the debtor must list expense deductions to identify the disposable income for the next five years. The test determines if chapter 7 or 13 is an option.
Once you determine which chapter is appropriate for your situation, you can begin gathering and completing paperwork.
Federal bankruptcy code provides certain exemptions, but Florida code doesn’t permit many of the federal allowances. Instead, you can only use Florida state exemptions. There are federal “non-bankruptcy” exemptions you may be able to utilize, including wages, social security benefits, civil service benefits, and veterans benefits. If you’re uncertain what property is exempt, talk to an experienced attorney in St. Petersburg for assistance.
Go to Credit Counseling Before Filing
Before filing for bankruptcy, you must attend a credit counseling program approved by the St. Petersburg court district. Not every counseling agency is accredited by the court, and to fulfill your pre-filing requirement, you must receive a certificate from an approved source.
Gather and Complete Financial Paperwork
If you’ve researched how to file for bankruptcy, you’ve likely noticed that it’s not as simple as submitting a form and calling it done. Instead, the process requires fifty-plus pages of paperwork with forms listing debts, income, expenses, assets, and collateral. For Chapter 13, you’ll need to submit a repayment plan with your paperwork. You’ll also need to provide information regarding secured debts.
It is possible to do this yourself, but many people in St. Petersburg choose a local attorney to provide professional assistance when they want to know more about how to file for bankruptcy.
File Forms with the Court
After completing all paperwork, you can file the forms with the court. Then, you may need to meet with a court trustee. Filing stops liens, foreclosure, creditor harassment, debt collection, and more. Once the repayment process is complete, you’ll attend a pre-discharge session for credit education. Afterward, you’ll receive a discharge order from the court officially eliminating certain debts. From then on, you can resume your life in St. Petersburg.