The bills are flooding in but the income is not. You can't catch up and you see no way out. You may even feel frozen!
You have an option in filing bankruptcy to make a fresh start. But where do you begin? First and foremost, learn your options.
You can file pro se. That means you prepare and file your own petition. It is best to research the process and know what you can and cannot do prior to filing. For instance, you cannot rack up any debt in the 90 days prior to filing. If you pay a friend or family member back within a year of filing or other creditors within a 90 day period, this is called a preferential transfer. The trustee may file to get that money back.
Another option is to hire an attorney. Most attorneys do a free consultation which will enable you to determine your eligibility. You will need to provide the most up-to-date and accurate bank statements, taxes, and paystubs as well as any pertinent financial documents and lawsuits so they can review your entire situation carefully. You must be up front an honest about everything. An attorney can also advise you on whether you should file chapter 7 or chapter 13. They may also be able to explain to a trustee unusual situations.
There are many things to consider when filing for bankruptcy. Most importantly, know the laws and deadlines. If you fail to present something by a deadline, it could mean your case gets closed without a discharge. Also, exchanges of money and repayment can become a problem with a trustee. You must be sure to know the laws. Be sure to read about pre-bankruptcy planning and possibly consult an attorney.
Want to learn more? Read Who Can File a Chapter 7?