Completing A Bankruptcy Petition? Learn What's Involved

Typically, a Chapter 7 bankruptcy proceeding is initiated with what is known as the bankruptcy petition, somewhat of a formal notification of an individual's request to file for bankruptcy. This extensive request must include very specific details concerning your income, assets, and other financial status information. In fact, many people are stunned when they see just how involved the process is. Having a general idea of what to expect before you begin the process can be helpful.

Property And Assets Outline

One of the more important topics you will be required to cover is the property and assets outline. The purpose of this section is to determine what you have, how much it's worth, and whether or not you plan to have it included as part of the bankruptcy. Within this section, all forms of real property must be listed and have a value attached to them.

This includes everything from expensive jewelry to real estate, even if the property has not been paid off. As far as the exemption section, within this area you include those assets that you would like to keep out of the sale, such as family heirlooms. While all requests are reviewed, ensure you understand that all aren't always granted.

Financial Management Course Certificate

Bankruptcy is meant to be a one-time solution. To ensure individuals have the resources and are equipped with the right tools to help avoid this type of outcome in the future, successful completion of a financial management course is generally required as part of the petition process.

Within this course, basic level information pertaining to budgeting, credit card usage, and other helpful money savings tips are included. Upon successful completion, you must include a copy of a certificate certifying your completion of the course within the petition packet.

Means Test

As part of the final section you can expect to complete the means test. Bankruptcy is generally reserved for individuals facing significant financial strain that need immediate legal assistance to avoid further finical catastrophe. The means calculator is a way of determining if this type of scenario is taking place.

As part of this process, you deduct all your expenses from your income and compare the final figure to a chart based on the size of your family. If your income falls within a certain range, you may qualify. If not, you can still submit your petition, but you could be denied.

As evident, the completion of the petition is a very involved process and an error in this area could affect the outcome of your request. You can protect yourself with the assistance of a petition preparer.