Filing for Chapter 7 bankruptcy can be a complex process, but with the right preparation, you can navigate it more smoothly. This type of bankruptcy helps individuals eliminate most of their unsecured debts.
Check eligibility requirements
To qualify for Chapter 7 bankruptcy, you must pass the means test, which compares your income to the median income in New Jersey. If your income is lower, you may qualify. If it’s higher, you’ll need additional calculations to meet the threshold.
Mandatory credit counseling
Before filing, you must complete a credit counseling course from an approved provider. This course helps you evaluate your financial options and see if bankruptcy is the best solution. After completing the course, you’ll receive a certificate, which you must include in your bankruptcy filing.
List your assets and debts
Creating a detailed list of all your assets and debts is essential. This includes everything you own and everything you owe. Be honest and thorough, as this information is critical for your bankruptcy case. Missing or inaccurate information can cause delays or complications.
File the necessary forms and meet with a trustee
Filing for Chapter 7 bankruptcy involves completing and submitting several forms, including:
- Voluntary Petition (Form 101) and Schedules of Assets and Liabilities (Forms 106A-106J)
- Statement of Financial Affairs (Form 107) and Statement of Intention (Form 108)
- Means Test Calculation (Form 122A-2) and the Credit Counseling Certificate
- Declaration About an Individual Debtor’s Schedules (Form 106Dec)
- Summary of Assets and Liabilities (Form 106Sum) and Statement of Current Monthly Income (Form 122A-1)
After filing, you’ll need to attend a meeting with the bankruptcy trustee. During this meeting, the trustee will ask questions about your financial situation and the information in your forms.
Moving forward with a fresh start
Filing for Chapter 7 bankruptcy can give you a fresh financial start by discharging most of your unsecured debts. This process requires careful preparation and honest disclosure of your financial situation.