Before you begin the process of filing for bankruptcy online, you must understand the two forms of online bankruptcy — Chapter 13 and Chapter 7. If you file for Chapter 13 bankruptcy, your debts will remain, but you will be given a debt repayment term that can last for 3 to 5 years. In Chapter 7 bankruptcy, you are essentially asking the court to wipe out some of your debts. This is achieved by selling off almost everything you don’t need and giving the money to your creditors. Although it is most common to file for Chapter 7 bankruptcy, it is strongly suggested that you seek legal advice to choose the right form in your case as there are exceptions to certain clauses and alternatives you could opt for.
Now, if you’re ready to file for bankruptcy online, the first thing you need to do is download free bankruptcy forms from the official website of the US courts as required. You must then follow the steps mentioned below.
The Means Test form will decide if you are eligible to file for Chapter 7 bankruptcy or not. This is done by comparing your monthly income against the median income of similar households in the state that you reside. You will only qualify if your income is lower than that average. In case it is above the average, other factors will be also be considered in the test. Since these can make things quite complex, especially considering legal jargon, it is best if you approach a lawyer for legal advice before proceeding.
It is mandatory to enroll in a bankruptcy credit counseling course from a government-approved agency and complete it within six months of the bankruptcy filing. After the course, you will receive a passing certificate that you will be asked to present in court.
You are required to start with the first form, B101, which is a voluntary petition form. Following this, in other forms, you will be asked to fill out the details about your creditors, contractors, expenditures, and additional pertinent information.
Once you file a petition, your case will be scheduled in court. If you’re filing for Chapter 7, the court will assign you a trustee and sell all your non-essential property.
You will also need to attend some debt education courses and complete it within 45 days of meeting with your trustee and creditors. Please note that you will be required to meet your trustee in person during this course.
Do you need a lawyer to file for bankruptcy online?
The answer to this is not that simple. Since not all states in America have implemented a full DIY e-filing system yet, you might need a lawyer to file your case. If you do not want to hire a lawyer, you can instead hire a bankruptcy petition preparer. A petition preparer is a non-attorney who will take care of all documents for bankruptcy for a fee.