In April 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act officially amended the U.S. Bankruptcy Code and is now recognized as the uniform federal law that governs all bankruptcy cases. Today, you must take each of the following steps to officially file a bankruptcy claim:
- Choose and file for a specific type of bankruptcy. There are two types of bankruptcy for individuals or personal bankruptcy — Chapter 7, where your assets are sold off to pay creditors, and Chapter 13, where you can develop an interest-free repayment plan. You must apply for one type or the other, and your eligibility for each is based on your reported income when you file.
- Arrange for official credit counseling. New laws require that you must work with a licensed counselor for the bankruptcy filing to be legitimate.
- Attend a meeting of your creditors. In almost all personal bankruptcy cases, this is the only official proceeding you must attend. Informally called a "341 meeting" (named after section 341 of the Bankruptcy Code), it's designed for you to meet directly with your creditors so you can answer specific questions about your overall debts and property. This meeting usually takes place 20 to 40 days after you file the claim.
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