Bankruptcy is a process which allows individuals or businesses who owe others more money than they are able to pay the money within a time or completely eliminate most of the bills. Everyone is not eligible to file bankruptcy. Whose conditions fulfill some criteria is able to file bankruptcy. Consumers can file bankruptcy under chapter 7 and chapter 13, while chapter 11 is businesses bankruptcy.

In all bankruptcy processes chapter 7 is faster. Under Chapter 7 of the Bankruptcy Code all property of the consumer is sold and is distributed to the creditors. In order to be eligible to file bankruptcy under chapter 7 consumers must meet several criteria. The income of consumer must not be high. The “means test” determines whether a debtor qualifies for Chapter 7. The consumer must pass the means test. If he has filed a previous bankruptcy within a certain period of time, most of the time within the past 180 days, the court will dismiss his case. Again, if the court believes he is cheating his creditors, then court may dismiss his case. If the debtor fails to meet Chapter 7 criteria, a bankruptcy court can convert the case to a Chapter 13 bankruptcy.

Chapter 13 bankruptcy is little different from chapter 7 bankruptcy. Under chapter 13 a debtor gets opportunity to repay some or all debts with lower or no interest. Chapter 13 bankruptcy is applicable for a debtor who has a regular and high income, and thus can afford to request for such adjustments or reductions. Regular income of debtors is the most important criteria for chapter 13. Again a attorney is needed for debtor. The United States Bankruptcy Code gives the debtor a time period about 5 years, within which the creditors must be paid back. The process is carried out under the supervision of the courts. Debtor’s property and interest will be safeguarded by the attorney whole time. A new interest-free plan for repayment is needed, which is approved by the court. The advantage of chapter 13 over chapter 7 is that debtors are allowed to keep all of their property here.

Chapter 11 bankruptcy is reserved for companies or business. If any debtor wants to continue to his business operation but needs to develop a plan to pay back his debts, he should file bankruptcy under chapter 11. The bankruptcy court and a trustee will arrange a payment schedule so that all parties or creditors are paid. But this kind of bankruptcy is very complicated.

Post Filing Bankruptcy course

After much thought and finally deciding that bankruptcy is the ONLY option for you, the next step is figuring out how to file for bankruptcy. Of course the best option is hiring the best bankruptcy lawyer in town. Then again, you would be surprised at how much it would cost to hire a bankruptcy lawyer and because you are bankrupt, most of the time, you wouldn’t have enough money to pay for this extra service.

If your case is not complicated, you may choose to file bankruptcy Pro Se. This means you will take charge of all the processing for your bankruptcy application. The downside of this is, not a lot of people are trained to organize documents. And in filing for bankruptcy, there are a lot of documents that can easily get lost or get mixed up in the process. Fortunately, however, in the advent of modern technology, it is now possible to file a case online. You may gain access to online services that provide you with bankruptcy forms, others offer a bankruptcy filing software, and what is more, you may actually file the case with the court over the internet.

It should also be noted that when filing bankruptcy online, it is not actually free. You will still have costs, although it would be significantly lower than when you let a lawyer do the job for you, especially if you pay the lawyer by the hour. Filing online under chapter 7 would cost around $200 and $300 when filed under chapter 13.

Here is a step-by-step process on how you can file your bankruptcy papers online.

1. Prepare a list of the things you need to do starting with the list of creditors, whom you owe money. This step is crucial in order to prevent any delays in the process of filing your papers.
2. Find out under which chapter of the bankruptcy code you are going to apply. A means test form is available at the Department of Justice website that you may is in order to assess your income each month. If it is more than the median income in your state and you can pay $100 each month, you are qualified to apply under Chapter 13. If it is less than the median income, and you can no longer pay for an extra $100 every month, you can only apply for Chapter 7.
3. Enrol in a credit counselling program approved by the government. You may also search and apply for credit counselling classes online.
4. Find and download all the forms you need to file for bankruptcy. Online software can help you in filling out your forms. These are available for download from the internet. They will be responsible for collecting and documenting income and credit details. Under Chapter 7, the site will prepare the Bankruptcy Form 22A and Bankruptcy Form 22C for Chapter 13.
5. Electronically sign your completed bankruptcy forms. Then your papers can now be sent to the bankruptcy court to begin processing and in order to verify if you papers have been submitted, you may call the Voice Case Information Systems (VCIS) of the US Bankruptcy Courts. This service is free of charge.
6. And lastly, the only thing you cannot do online is to meet with the court-appointed trustee as a part of the application process. After filing your papers, you can now prepare yourself for a “341 meeting” with a government-hired agent. He will be evaluating your papers for veracity. 

It definitely does not get any easier than that. But be aware that you must not rely on the website alone to process your papers. You must actively follow-up or monitor your papers as well and see if the processing pace suits your preference. If any trouble happens during you online application; by all means, hire a lawyer.