People in difficult financial straits often file for bankruptcy as protection against the relentless onslaught of creditors and their demands that they pay up the money that is due (with interest as well.) Declaring bankruptcy is a legal way of keeping most everyone at bay, while the person slowly rebuilds his or her financial reputation; and hopefully, be able to pay back the debts a little at a time.
Although bankruptcy is an effective way of fending off the hounds, this should be a last resort measure only; and only performed when a person or company is truly and legally bankrupt. Bankruptcy frauds are just as prevalent, and these are considered as federal crimes.
If you are indeed going through the same financial straits, here are the procedures (simplified in this case) as to how to file for a voluntary bankruptcy.
1. Collect all necessary documents that prove beyond reasonable doubt that are in a bankrupt state. These documents include: bank statements, paycheck stubs and tax returns. Your past or due bills from within the last six months (and these can be numerous) are also important; these may include: car loans, credit card bills, mortgages, hospital bills, utility bills, etc.
2. You need to hire a bankruptcy attorney; preferably someone whom you can trust, and at the same time a lawyer that specializes in bankruptcy cases. A good attorney at this point can help you negotiate better settlement terms with your creditors, and maybe afford you more time to pay back debts. Also, an experienced attorney may even help you save your assets, instead of having to surrender everything to the courts. This also means that you need to set aside money to pay for both your attorney and your court appearances.
3. You can either ask your attorney where you can get copies of the bankruptcy petition, or you could simply go to any local government office or court house and inquire there. It is advisable that you get multiple copies of the petition, in case you need to rework your original. Once you have the copies, you need to painstakingly list each and every debt you owe to what creditor, and if possible how much money you should be repaying each. You need to be as truthful here as possible, without exaggerating your claims or understating them. Lying about your claims (purposefully or unintentionally) is a federal crime, and if proven that you have done so, you will be charged with perjury. As such, you may even see some time in jail.
4. Now you need to discuss all viable options with your attorney. You also need to give your legal representative a copy of your accomplished bankruptcy petition, and make sure that both of you rake through it with a fine tooth, so as to avoid being charged with perjury later on. Your attorney should give you a blow-by-blow directive as to how you should present your case in court, which payment options you need to fight for, etc. Once both of you agree that your documents are in order, your attorney should file your petition for you. The local courts will then send out a Notice of Commencement to all your creditors.
5. If everything goes well, your attorney will then set up a series of meetings (in court) with your creditors about likely payment options. A bankruptcy judge will preside over your case, and issue your discharge papers afterwards.