Filing for bankruptcy is never an easy choice.
What Is Chapter 7 Bankruptcy?
While similar in many ways, they differ in some big areas.
you’ve got the option to include bothsecured debtsandunsecured debts.
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Of the two, Chapter 7 is by far the most popular.
Heres how to determine if you qualify and how to file.
If not, its still possible you’re free to qualify.
Youll have to participate in a pre-bankruptcy counseling session with an approved credit counseling agency.
Itll also help you withbudgetingin hopes that you wont repeat the bankruptcy process in the future.
The fee for this credit counseling session can range from $25-$50 and lasts 90-120 minutes.
The last thing that can make you ineligible for filing is your history with bankruptcy.
Youre ineligible to file if youve had another bankruptcy case dismissed within the last 180 days.
How Much Does a Chapter 7 Bankruptcy Cost?
Once youve checked those three boxes, then youre ready to file.
But be prepared for the costs.
The initial filing fee for Chapter 7 is $338 as of 2022.
Pros and Cons of Chapter 7 Bankruptcy
The upside to Chapter 7 bankruptcy is great.
you could get much of your debt discharged and be able to start fresh.
But there are other drawbacks you may not think of.
Filing for bankruptcy can also be an emotional decision for many people.
Take that into consideration when youre making your own decision.
Heres a step-by-step guide to the process, whether you hire an attorney or not.
Paying an expert to guide you through the bankruptcy process can be money well spent.
it’s possible for you to represent yourself in your Chapter 7 bankruptcy though.
The trustee will be in charge of executing your bankruptcy.
Attend the Meeting of Creditors
Youll attend one meeting with your trustee and creditors after filing.
Be aware that if you dont show up to your meeting, the court will dismiss your bankruptcy case.
You wont want to procrastinate on this.
You only have 60 days after your initial meeting of creditors to file your completion certificate with the court.
Youll also probably have to file an extra petition requesting they accept the late certificate.
Thats called an automatic stay.
If a company continues to make a run at collect during the stay, itsviolating a court order.
Let the company know in writing, and the collections will likely stop.
If they dont, notify the bankruptcy court, and theyll likely pursue litigation against the company.
Seizing of Assets
Your trustee will handle all of this for you.
Jen Smith is a former staff writer at The Penny Hoarder and author of Meal Planning on a Budget.
She gives money-saving and debt-payoff tips on Instagram at @modernfrugality.
Senior editor Johna Strickland contributed.
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