4 Steps of Filing for Bankruptcy

June 21, 2023

Filing for bankruptcy can provide a way out of debt for borrowers struggling to keep up with their bills. Unfortunately, it’s also a complex legal process that people find intimidating. Knowing what to expect when filing for bankruptcy can help alleviate your anxiety so you can get the debt relief you need.

A Guide to Filing for Bankruptcy

1. Financial Counseling

Borrowers hoping to file for bankruptcy will first need to meet with a government-approved financial counselor. During this meeting, your counselor will explain your bankruptcy options and try to create a budget based on your current financial situation. Based on this information, you can decide whether pursuing bankruptcy is the best option for you.

2. Filing the Petition

filing for bankruptcy

Filing the petition with the court is the official beginning of your bankruptcy case. Your petition will need to include a complete list of your debts and assets, as well as any exemptions you wish to claim. Incomplete information can cause unnecessary delays, so it’s best to leave the preparation of your petition to an attorney.

Filing a bankruptcy petition also triggers an automatic stay, which puts an immediate stop to all collection activity. This includes letters and phone calls from creditors, as well as wage garnishment, lawsuits, and repossession.

3. Creditor’s Meeting

Before appearing before the judge, you’ll have to attend a meeting with the trustee. While creditors may attend, in most cases, it will just be yourself, your attorney, and the trustee of the court. During this meeting, they’ll ask questions about your finances and work with your lawyer to resolve any last-minute issues.

4. Debtor’s Education

Before discharging your debts, the court will require you to complete a debtor’s education course. These programs, which can usually be completed online, are designed to help you build financial skills that may help you avoid falling back into debt. Once you’ve fulfilled the requirements, the court will send you a notice informing you that your debts have been discharged.

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