In this article, noted Philadelphia bankruptcy attorney David M. Offen, Esq. explains what a bankruptcy petition is and how it works in the bankruptcy process.
If you are researching bankruptcy petitions online, you are likely considering filing bankruptcy and want to know more about it. An educated debtor is a successful debtor.
Find out even more about your options considering your unique financial situation by scheduling your free, no-obligation consultation with the Law Offices of David M. Offen. Call (215) 625-9600 and let us help you get free of bills.
Bankruptcy Petition Definition
The bankruptcy petition is the first form in a package of forms you must file in order to open your bankruptcy case. The information you disclose on your petition introduces you to the court and the Trustee. In your petition, you set forth identifying information, the identity of your co-debtor if you have one, your address, what Chapter you intend to file under, and general information about your financial situation.
You will file many other forms with your petition when you file bankruptcy, and the entire filing may also be referred to as “the petition” or “the petition and schedules.”
On your Schedules, you disclose your income, assets, expenses, and debts, and co-debtors, and swear to the best of your knowledge that the information you’ve disclosed is true and correct to the best of your knowledge.
You also complete forms attesting that your social security number is correct, a statistical summary of your assets and liabilities, and certifications that you completed your credit counseling course, and later in your case, the financial management course, also called the debtor education course. Last, you complete your Statement of Financial Affairs.
If you have a lawyer filing for you, the attorney will put together the paperwork for you based on the information you provide. You then sign that the information is true and correct to the best of your knowledge.
Chapter 7 Bankruptcy & Chapter 13 Bankruptcy Explained
Chapter 7 bankruptcy is a four- to six-month process during which you disclose your income, assets, expenses, and debts to the court and receive a discharge of your unsecured debt. You must pass the Chapter 7 means test in order to income qualify to file under Chapter 7. In other words, if you complete the means test and find that you have disposable income, you must file under Chapter 13, except in certain circumstances such as where you were just laid off from a high paying job, no longer have the same income and you need bankruptcy relief right away.
Forms specific to Chapter 7 bankruptcy include:
- Chapter 7 Means Test
- Statement of Intention (how you intend to deal with your secured debt)
- Statement of Current Monthly Income
- Statement of Exemption from Presumption of Abuse
A Chapter 7 debtor may also need to file:
- Application to Pay the Filing Fee in Installments
- Application to Have the Filing Fee Waived
- Statement about an Eviction Judgment
- Forms requesting Mortgage Modification (vary by jurisdiction)
Chapter 13 bankruptcy is a three- to five-year process and works much the same way as a Chapter 7 filing except a Chapter 13 debtor pays Chapter 13 plan payments each month to the Trustee, who distributes the payments to the debtor’s creditors. Chapter 13 debtors often use Chapter 13 to catch up with past-due payments on their mortgage, car loan or lease, support obligation, student loan obligation, or obligation to pay taxes or government fines or fees.
Forms specific to Chapter 13 bankruptcy include:
- Your proposed Chapter 13 plan
- Statement of Current Monthly Income and Calculation of Commitment Period
- Calculation of Your Disposable Income
All debtors are required to provide a list of creditors. These can include credit card lenders, medical providers for unpaid medical bills, holders of deficiency judgments, domestic support obligees such as a child support obligee or an alimony obligee, mortgage lenders, car lenders, car lessors, personal loan lenders, landlords for unpaid rent, second mortgage or HELOC lenders, tax lien holders, the IRS for unpaid income tax, student loan lenders, and the state or federal government. Even if the statute of limitations for debt collection in PA has passed, you should list those creditors.
4 Types of Bankruptcy Petitions
1. Voluntary Bankruptcy Petition for Individuals
Most bankruptcy petitions are filed by debtors voluntarily using Official Form 101.
2. Voluntary Bankruptcy Petition for Non-Individuals
Businesses or organizations filing bankruptcy use Official Form 201 as their petition.
3. Involuntary Bankruptcy Petition for Individuals
Occasionally a creditor forces someone into bankruptcy. Those filing bankruptcy against an individual use Official Form 105 as their petition.
4. Involuntary Bankruptcy Petition for Non-Individuals
If a group of creditors wish to force a business or organization into bankruptcy, they will use Official Form 205 as their petition.
Bankruptcy Petition Requirements
Individual debtors filing voluntarily or married individuals filing jointly must disclose:
- Your legal name and any other names you have used in the last eight years;
- Your spouse’s legal name and any other names they used in the last eight years, if you are filing a joint petition;
- The last four digits of your social security number(s);
- Any business name or Employer Identification Numbers you have used in the last eight years;
- Your address;
- The Chapter of bankruptcy you are filing under;
- How you intend to pay the filing fee, or if you need installment payments or a fee waiver;
- Whether you have filed bankruptcy in the last eight years;
- Whether you spouse or business partner has a pending bankruptcy case;
- Whether you own a business as a sole proprietor;
- Whether you are filing under Chapter 11 and are a small business debtor;
- Whether you possess anything that is hazardous;
- Whether you have been briefed about taking your credit counseling course;
- Whether your debts are primarily consumer or business debts;
- Whether you are filing Chapter 7 and have non exempt assets;
- An estimate of the number of creditors you owe;
- An estimate of the worth of your assets;
- An estimate of the total amount of your debt;
- Your signature “under penalty of perjury;”
- Whether an attorney or a petition preparer helped you prepare the petition.
Be aware that your signature is a sworn statement that everything you’ve disclosed on your petition is true and correct to the best of your knowledge. If you lie on your petition, you have committed perjury, and you may have to pay fines of up to $250,000, face up to 20 years of imprisonment, or both. Just be sure to try to accurately answer any questions that your lawyer asks you.
What Happens After Filing a Bankruptcy Petition?
Once you have filed your bankruptcy petition and schedules, your case will be assigned a docket number and your creditors will be mailed or emailed a notice that you filed, the deadline to object to discharge, and the date of the first scheduled 341(a) Meeting of Creditors.
If you have not done so already, you must complete your credit counseling course and provide your attorney with the certification of completion, which your attorney will file. You must also take a financial management course, also called the debtor education course, and have your attorney file that certification of completion.
341(a) Meeting of Creditors
The purpose of the 341(a) Meeting of Creditors is not only to give your creditors the opportunity to question you about the debt you owe. The Meeting of Creditors allows the Trustee to verify your identity and ask any questions they have about your filing. In most cases, the creditors do not show up to the meeting of creditors.
Your attorney will know if any creditors intend to appear, and will prepare you for the Trustee’s questions.
How an Experienced Bankruptcy Attorney Helps
Regardless of what Chapter you are filing under, an attorney guides you through the process or completing your bankruptcy petition so that you make no mistakes that could be construed as bankruptcy fraud. Also, an experienced bankruptcy attorney will ensure that the process goes very smoothly, that you attain your financial goal through your bankruptcy filing, and that there are no surprises or unintended consequences from your filing.
Call The Law Offices of David M. Offen today at (215) 625-9600 to take advantage of the opportunity to talk with an experienced bankruptcy attorney about your particular financial situation, concerns, and goals – free of charge! Let us help you get a fresh financial start.
