Most individuals already know that they are bankrupt for quite a while before they actually decide to file. Some delay this decision hoping to find an alternative that allows them to meet their financial obligations. In many cases, people postpone bankruptcy because of the fear of losing valued assets or even their reputation.

However, doing nothing when you are insolvent or can't pay your debts is never a solution. A bankruptcy petition is a formal request to a federal court for relief from or restructuring of your debts. A bankruptcy judge makes the final ruling on all bankruptcy petitions.Chapter 11 Bankruptcy

Review your options. Individuals can file a Chapter 7 or a Chapter 13 petition. A Chapter 7 petition declares that you have no way to repay most debt and asks the court to liquidate assets and debts. A Chapter 13 petition is a request to restructure your debt with a court-ordered repayment schedule. Both petitions allow you to keep some assets safe from creditor demands. Each state sets different exemptions for your residence and allowances for assets like automobiles.

Determine how to pay the filing fees. The bankruptcy court can waive the filing fee for hardship cases. You must file a separate application for the waiver. The attorney's fees for a Chapter 13 petition can be included in a court-ordered repayment plan. Chapter 7 attorney's fees cannot, since you are requesting total forgiveness of your debts. Pro bono or community legal services can reduce your filing costs.


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