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Originally Posted by amendakalt  How I Declare Bankruptcy |
According to the IRS, QUOTE,” Bankruptcy proceedings begin with the filing of a petition with the bankruptcy court. The filing of the petitions creates a bankruptcy estate, which generally consists of all the assets of the person filing the bankruptcy petition. A separate taxable entity is created if the bankruptcy petition is filed by an individual under chapter 7 or chapter 11 of the Bankruptcy Code. The tax obligations of the person filing a bankruptcy petition (the debtor) vary depending on the bankruptcy chapter under which the petition was filed. Generally, when a debt owed to another is canceled the amount canceled or forgiven is considered income that is taxed to the person owing the debt. If a debt is canceled under a bankruptcy proceeding, the amount canceled is not income. However, the canceled debt reduces the amount of other tax benefits the debtor would otherwise be entitled to.”
For personal bankruptcy there are really only two types that you will need to decide from. These are Filing Chapter 7 bankruptcy and Filing Chapter 13 bankruptcy. Chapter 7 is where all your debts are written off by your creditors. This is where there is absolutely no chance of you being able to pay off these debts, so there really is no point in your creditors chasing you for them.Chapter 13 is where you will come to an agreement with your creditors about what amount you will pay off the debt owed to them and over what period of time. You will usually employ the services of a professional person or agency for this type of bankruptcy and they will do all the negotiation and mediation for you. Chapter 13 is suitable for people who do have an income that can potentially pay off some of the debts over an extended period of time (usually up 5 years). You will be given a payment plan which you will have to stick to. You can prepare your own payment plan but this will have to be approved by the courts. The very first thing you need to do if you have not already done it is list out all your debts. Each and ever one of them. Absolutely every organisation and person you owe money to. Do not leave out anything.Then list the minimum payments you are expected to make to each of them.Next list how far you are behind (if indeed you are) with them. This would be called arrears.Next list out all your earnings, and by earnings we mean All money coming into your bank account.If you are having difficulty deciding which bankruptcy to declare then YOU NEED to get a free consultation from a bankruptcy attorney. Nearly all of them offer a free consultation call. Make use of this it is a great service. Once you have decided what type of bankruptcy to declare, then you legally have to have a credit counseling for bankruptcy session with a qualified and certified professional.
To Declare biz bankruptcy, you can elect from one of two different types of bankruptcies. A Chapter 7 bankruptcy allows your biz to wind down its affairs, cease operation and obtain a discharge of financial liabilities. A Chapter 11 bankruptcy permits your biz to keep operating. Through a Chapter 11 bankruptcy, a business reorganizes its operations and restructures its debts. You need to Select the form of bankruptcy that makes the most sense for your biz. If you reasonably believe your biz can operate into the future if you reorganize your operations and restructure your debt and obligations,you need to select a Chapter 11 proceeding. On the other hand, if you reasonably cannot make ends meet even with bankruptcy protection, a Chapter 7 bankruptcy is the suitable alternative. ALSO yo need to obtain a petition form for the type of bankruptcy you desire from the clerk of the bankruptcy court. Bankruptcy court clerks maintain standard forms for biz seeking bankruptcy protection (enterprises that do not have legal representation). Additionally, these forms are available through the main website of the U.S. Bankruptcy Courts (
Bankruptcy Forms).
To File Bankruptcy , you should complete your petition for bankruptcy, following the guidelines provided by the court clerk at the time you receive the form.List all of your biz’s creditors. The petition for bankruptcy includes an attached schedule on which you itemize each creditor, the amount due, the account number and the address.File the completed petition for bankruptcy with the bankruptcy court clerk.You need to pay the required filing fee. The fees for Chapter 7 and Chapter 11 bankruptcies vary. Additionally, the amount of the fees for these types of cases varies from one jurisdiction to another. The bankruptcy court clerk will provide specific fee information
If you are an individual then you are allowed to file a do it yourself bankruptcy. But be warned, this is not such a good idea if you have a complicated or complex situation, but may well save you money in a simple straight forward type of bankruptcy. You may know the process for how to declare bankruptcy, but you must make sure that you are declaring the right bankruptcy for you and your own situation. Get all the free advice that you can.Make those free consultation calls to the bankruptcy attornies. These are invaluable. Make more than one if you need to, after all they are free.Talk to your local court.Be completely upfront and honest in all your dealings and paperwork. Don’t try and fool anyone especially yourself. Everyone you will be dealing with will have heard it all before, so you will shock no-one.
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