Table of Contents:
- How to File for Bankruptcy in Michigan
- How to File for Bankruptcy in California
- How to File for Bankruptcy in Kentucky
- How to File Bankruptcy in Illinois
- How to File Bankruptcy in Texas
Visit one of the U.S. Bankruptcy Court -- Michigan web sites (see Resources) to find resources for declaring bankruptcy. Those in the areas surrounding Detroit and Flint will need to find a court in the Eastern District, while people living around Kalamazoo and Lansing would want to visit the Western District website.
Decide whether you want to pursue a Chapter 7 or Chapter 13 case. In Michigan, your personal property and most farm animals cannot be seized if you declare any form of bankruptcy. However, in Chapter 7 you do risk losing your house and to qualify must pass a federal means test (see Resources).
Write down a list of all your debts, including those which may not be noted on your credit file such as utility bills, and a list of all your assets. You cannot lose a retirement account in Michigan or any other state by filing bankruptcy, but you still have to disclose the fact that you have one.
Collect copies of your recent tax returns, any proof of recent income, and banking account statements.
Complete an approved credit counseling session and keep the certificate you will receive. You cannot file bankruptcy in Michigan without this certificate. A link to federally approved credit counselors is noted in the Resources section below.
Fill out all bankruptcy forms, which you can download and print from the U.S. Bankruptcy Court forms web site (see Resources). Full instructions are available, and you will be advised which documents you must copy and place into your bankruptcy petition. You can also hire a lawyer to handle this for you, and also act on your behalf in your local Michigan bankruptcy court.
Take your forms, any required document copies, and payment to your local bankruptcy court in the Eastern or Western District of Michigan. As of 2009, filing a Chapter 7 case in Michigan cost $299, while a Chapter 13 case in the state cost $274. If you truly cannot pay the entire fee upfront, the court might allow you to pay this debt in installments. If you hired an attorney, he or she will do this for you.
Wait for notice of your 341 hearing, which is a meeting of creditors. Those people and institutions to which you owe money have the opportunity to come to the Michigan bankruptcy court and object to your case, but this rarely happens. Be sure to attend this hearing, even if you have a lawyer.
Visit the Michigan bankruptcy courthouse as directed for any other hearings. Likely you will only need to go to the courthouse one more time, and that is for your bankruptcy completion. If you secured an attorney, you might not need to go to court again.
Attend a credit counseling class. Before you file for bankruptcy, you must receive credit counseling from a course approved by the U.S. trustee within 180 days of filing. You can complete the course online, over the telephone or in-person. Upon completion, you will receive a certificate of completion.
Complete a petition package. The package contains every form needed to file for Chapter 7 or Chapter 13. The main document, the petition, initiates the bankruptcy case. Other forms in the package include Schedules A, B and C (personal and real property), Schedules D, E and F (debts) and Schedule I, which documents your income. In all, a package contains approximately 30 forms.
File the petition package with the California bankruptcy court in your area. You only need to submit one original copy of the petition and schedules with the bankruptcy court. If you desire, you may request that the court stamp another copy with the word "filed" and keep this for your records. You can file the documents in-person at the court or by mail. Electronic filing is not an option for debtors; it is a method only attorneys may use. Along with filing the petition package, also file your certificate of completion of credit counseling.
Pay the filing fee. You may pay the fee with cash, a money order or a cashier's check. The money order or cashier's check must be made out as follows: Pay to the Order of the United States Bankruptcy Court. The court does not accept personal checks. At the time of publication, the filing fee for a Chapter 7 bankruptcy is $299, and it's $274 for Chapter 13. If you are filing for Chapter 13, you must pay the entire fee in one lump sum. However, if you are filing for Chapter 7, the court may waive the fee or allow you to make installment payments if your income is less than 150 percent of the federal poverty line. You must complete a Fee Installments and Fee Waiver Application.
Determine which type of bankruptcy you are planning to file. There are five types of bankruptcy that can be filed in the State of Kentucky: Chapter 7 Liquidation Bankruptcy, when all or some of the debt is erased; Chapter 11 Reorganization Bankruptcy, when the court reorganizes a corporation's structure and arranges a debt repayment plan; Chapter 12 Family Farmer or Family Fisherman Bankruptcy, designed for individuals who make their living on farms or through the fishing industry; Chapter 13 Individual Debt Adjustment, when the court reorganizes an individual's finances and arranges a debt repayment plan; Chapter 15 Ancillary Bankruptcy, for bankruptcies where other countries are involved, usually when the proceedings originate in the debtor's homeland. More information regarding each type of bankruptcy can be found at the Bankruptcy Court of Kentucky website (see Resources below).
Download and print out the specific bankruptcy forms and form instructions from the federal government's U.S. Bankruptcy Court's website (see Resources below).
Fill out the primary bankruptcy petition. You will need to provide your name, address and Social Security number. Next, you will be asked to choose the estimated number of your creditors, the estimated amount of money you owe and an estimated amount of assets. You will also be asked if you have filed bankruptcy any time in the previous 8 years and if you are involved in a bankruptcy that is pending in the courts. Sign and date the form.
Fill out the list of creditors form. Include a list of the 20 creditors to whom you owe the most money. Fill out the creditors' names, addresses and phone numbers. Fill out the type of debt (loan, credit card, etc.) and the amount of the debt. Sign and date the form.
Fill out any other forms that pertain to your situation, such as real estate property you own, income, unsecured debts, co-debtors or business obligations. Read the form instructions for your specific type of bankruptcy to find out exactly which additional forms you will need to fill out.
Find out how much the filing fee will be for your type of bankruptcy by going to Kentucky's Bankruptcy Fee Schedule site (see Resources below).
Go to the U.S. Bankruptcy Court that covers the district that you live in. Kentucky is divided into two districts, Eastern and Western. To find the district office nearest you, visit the districts' websites (see Resources below).
File your bankruptcy forms at the Court Clerk's office. Make sure to bring all of your forms and fees at the time of filing. The courts do not accept personal checks, but will take all major credit cards, cash, certified checks and money orders.
Decide if you will file Chapter 7 bankruptcy. This type of bankruptcy wipes the slate clean on the majority of your debts. But the State of Illinois does have income restrictions for filing Chapter 7 bankruptcy. For a single person, you can earn $52,597 or less, $68,075 for a family of two, $80,344 for a family of three and $96,695 for a family of four. For each additional family member, the State of Illinois allows an additional $6,900.
Decide if you will file Chapter 13 bankruptcy. Chapter 13 bankruptcy allows you to repay your debts by allowing an extension for repayment. The repayment plan usually spans several years. However, to qualify for this type of bankruptcy, you must have steady income with money left over after paying your monthly expenses. But the State of Illinois doesn't allow more than $1,010.650 in secured debt and $336,900 in unsecured debt.
Seek the help of an attorney. Securing legal representation can be helpful for those who are overwhelmed by the bankruptcy process. State Lawyers is a company that provides a free directory of bankruptcy attorneys in the state of Illinois.
File bankruptcy paperwork. You can download the necessary forms to file Chapter 7 and 13 bankruptcies at the United States Bankruptcy Court District of Illinois website. (Follow the link in Resources.)
Get ready to be called to attend a hearing. When declaring bankruptcy in Illinois, you will need to attend a court hearing. At this hearing, you will be required to answer questions about your debts that will be posed by creditors and the court trustee.
Bankruptcy in Texas does not discharge some debts, including most back taxes, child support, alimony, most student loans, penalties or fines, and purchases greater than $550 made within 90 days of filing bankruptcy.
To file for Chapter 7 bankruptcy in Texas and have your debts erased, you must pass a means test. Under the test, if you make less than the median income for a Texas family, you may file under Chapter 7. For singles, the median income in Texas is $36,285. $51,355 is the median income for a family of two, $53,803 for three persons, and $61,511 for four persons. If there are more than four members of your family, add $6,900 for each additional person.
Before you file Chapter 7 bankruptcy in Texas you will need to undergo credit counseling approved by the state, as well as complete any unfiled tax returns.
Once you meet the minimum requirements, your attorney will need to file a Statement of Financial Affairs with the Court. Your Statement of Financial Affairs will include a list of all your debts, both secured (such as mortgages or car loans) and unsecured (such as credit cards and medical bills). You will also need to include names and contact information for all your creditors and an itemized list of your personal property and assets.
If you own a home or property and file bankruptcy, you will most likely be able to keep it under federal and Texas state exemptions. Keep in mind, however, bankruptcy does not erase mortgages or liens, so if you are behind on your payments, your house may still be foreclosed on.
You can also exempt your car from Texas bankruptcy in most cases, regardless of whether you choose Texas or federal exemptions.
If you choose Texas exemptions on your bankruptcy, you can keep the following: $30,000 in personal property, including vehicles, livestock, pets, family heirlooms, sporting equipment, food, clothing, and a limited amount of jewelry. You can also keep disability, social security, veterans', and unemployment benefits, alimony, and child support. You are also entitled to your burial plots, retirement plan, and any health aids you use.
If you choose federal exemptions on your bankruptcy, you can keep: most life insurance payments and policies; alimony and child support; jewelry valued up to $1,350; and social security and unemployment benefits.
If you have extra income that would allow you to repay your debts, you may want to file Chapter 13 bankruptcy. Under Texas Chapter 13 bankruptcy, you will establish a payment plan with the approval of the court.