If debts are becoming unmanageable and you need protection from creditors, bankruptcy offers a court-ordered stay of collection action and a "fresh start." To commence a bankruptcy, you must file a petition in federal court; upon receipt, the court will impose a stay that prevents your creditors from contacting or suing you, or proceeding with any lawsuits that have already been filed. Filing a bankruptcy case on your own is legal, but not recommended.
Anyone proceeding in court on their own, without an attorney, is acting "pro se." Federal law allows pro se bankruptcy petitions on the part of individuals, but not businesses. If you are filing for a business, you must have an attorney. Although the necessary forms and instructions are available online, bankruptcy is a complicated area of law in which a legal misstep can end with a dismissal of your case.
Anyone filing for bankruptcy protection must attend credit counseling with a qualified agency or provider within the 180-day period before filing the petition. The Certificate of Counseling and Statement of Compliance must be submitted with the petition schedules and forms. The debtor must also submit any repayment plans developed through credit counseling.
Petition and Schedules
The debtor initiates a bankruptcy case by filing a petition in the court with jurisdiction over his place of residence. The federal courts handling bankruptcy cases are entirely separate from the federal district and criminal courts, as well as state-level courts. The debtor must also file schedules, including lists of all assets and liabilities, statement of income and expenses, statement of financial affairs, and list of contracts and leases still in effect. The bankruptcy law also requires debtors to submit their most recent tax returns or tax transcripts, and continue submitting tax returns while the case remains open.
Bankruptcy petitioners must submit wage statements from employers received within 60 days before the filing. Federal law now requires debtors to qualify for a Chapter 7 bankruptcy, which discharges debts after a court trustee seizes non-exempt assets. You qualify by earning less than the median income for your state, depending on family size; if you don't qualify for Chapter 7, you must file a Chapter 13 bankruptcy, in which a court trustee sets up a plan for partial repayment of your debts.
If you are filing a bankruptcy petition pro se, you must be prepared to deal with any objections to the petition, or requests to revise the schedules, that are filed by your creditors. You must also negotiate with secured lenders (such as mortgage companies) if you wish to reaffirm their loans and keep your property. You must appear at any hearings scheduled by the court and attend a confirmation meeting of your creditors if you're filing for Chapter 13. Any oversights or mistakes made in this process can bring about a dismissal and a legal ban on bankruptcy filings for a limited time in the future.