If you are overwhelmed by debt and are wondering what steps to take, this information may help you decide what to do next.

1.  Determine that there are no other options. A bankruptcy will remain on your credit rating file for up to 10 years.  You need to decide if this is acceptable.  If it is, then you must obtain consumer credit counseling from an entity approved by the U.S. Trustee within 180 days of the date of the filing of a bankruptcy case. The intent is to provide you with possible alternatives to filing a bankruptcy case.  You will get a certificate of credit counseling, which your Nebraska bankruptcy lawyer will file with your petition.

2.  Find an experienced bankruptcy attorney or decide if you are able to do this on your own. Bankruptcy filings are complicated.  In 2005, Congress amended the Bankruptcy Code with the Bankruptcy Abuse Prevention and Consumer Protection Act [BAPCPA], making it more difficult for people to file for the simpler liquidation type of bankruptcy.  Once you have retained an attorney, you will refer your creditors to their office.  Your creditors are no longer allowed to contact you, and if they do, then they can be held liable for ignoring the automatic stay that goes into effect when you retain a bankruptcy attorney.

3.  Collect all materials and determine which type of bankruptcy filing to make. You will need all your financial information.  This includes not only all of the money you owe to creditors but also any assets you possess, including assets that have mortgages or liens against them, pay stubs, and the last two tax returns.

4.  Decide which type of bankruptcy filing to make. There are two types of bankruptcy filings: Chapter 7 and Chapter 13.  The most popular is Chapter 7, which is a liquidation bankruptcy.  Your assets and exemptions will be determined and all remaining assets are sold for cash, which is used to satisfy your creditors.  BAPCPA made it more difficult to file Chapter 7 because of the means test, where your income is compared to the median income in your state.  A Chapter 13 bankruptcy may be your option, and your attorney will be able to determine if you qualify, and what your exemptions are to set up repayment or discharge of your debts.

5.  Prepare and file your bankruptcy petition. You or your attorney will prepare and then file your bankruptcy petition in U. S. District Court, Bankruptcy Division, in your area.  Once your petition is filed, you and your creditors will be notified as to the date of the Meeting of Creditors or 341 Meeting in front of the Trustee overseeing your case.  Your creditors can use this opportunity to question you about your assets or even object to the filing, yet neither happens often.  This is generally the only meeting or hearing in a bankruptcy case.

6.  The Trustee will review your materials and make its determination. Depending on the detail of your bankruptcy petition, the Trustee may ask for supplemental materials, such as your income tax statements, W-2 forms, paycheck stubs, your mortgage deed and a recent appraisal of your home’s value.  The Trustee will determine what assets will be liquidated and what the repayment will be to your creditors.

Whether or not to file a bankruptcy petition is a difficult decision to make.  An experienced, knowledgeable Nebraska Bankruptcy attorney can offer a great deal of assistance and guide you every step of the way.  Contact Steffens Law Office if you are considering a bankruptcy filing.

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