Essential Bankruptcy Strategies

The Best Way to File Bankruptcy Yourself Requires Careful Planning

The temptation to file bankruptcy yourself, without a lawyer, may be irresistible. An individual may save about $750 in attorney fees when filing Chapter 7.

Yes, you can complete bankruptcy for free, or nearly free, but for the filing fee. Perhaps if you file bankruptcy yourself your effort is well spent in typical small cases. In all bankruptcy cases however, success depends on proper planning. Familiarity with both Chapter 7 and Chapter 13 requirements helps. Understanding the bankruptcy means test is essential if you begin bankruptcy yourself using free forms. Knowing how to manipulate means test results legally is vital for success and prevents wasting untold thousands of dollars. Whether filing bankruptcy alone or retaining a lawyer, the means test calculation has far-reaching consequences. The best results begin weeks or perhaps months before filing.

Calculate the Means Test Before You File Bankruptcy Yourself

The differences in Chapter 13 and Chapter 7 determine how long a case last. These differences are extremely important if you file bankruptcy yourself.

Chapter 13 plans for repayment typically range from 36 months to 60 months. In large part, the means test determines if an individual may elect a 36-month term or must propose a 60-month plan. If you choose to file bankruptcy yourself, you may optimize your means test results and qualify for Chapter 7 and your case may last as little as four months.

Many people wait until the last possible few days to begin sorting through their financial records only to struggle. Preparing official bankruptcy schedules and forms takes even more time if you file bankruptcy yourself. Be aware, the official bankruptcy instructions included do not explain how to claim maximum benefits. The instructions do not offer tips or advice on how to avoid problems.

One of the required forms for all individuals is the means test -- Form B 22A. When working through the form and calculations the first time, almost all people regret having waited so long. The test uses actual income and expenses over the last full six months for many calculations. Everyone could have changed test results slightly if only beginning preparation six months ago. Everyone could change results dramatically if knowing what, when and how to push legal limits safely. The benefits and risks both multiply if you file bankruptcy yourself.

How to Calculate the Means Test Yourself for the Greatest Benefit

Official Bankruptcy Form B 22A includes instructions prepared by the Federal Court System that are specifically designed to help courts administer cases. In the most basic sense, these instructions tell debtors what to do. Not if, but when questions arise, federal employees are prohibited by law to provide any interested party legal advice. Debtors who file without an attorney are on their own.

Almost anyone can complete the bankruptcy means test accurately, reduce income, increase expense deductions, and minimize monthly disposable income. These three considerations help debtors qualify for Chapter 7 bankruptcy and decrease Chapter 13 bankruptcy payments. However, there is a catch. Inside knowledge is required.

The best way to calculate the bankruptcy means test is in the privacy of your own home. Custom forms are available that explain -- in detail -- what, when, how and why test results can change. Anyone may change their spending habits during the six months before filing. Knowing how to change spending habits is the key to improve means test results legally.

The Best Chapter 7 and Chapter 13 Means Test Forms with Debtor Tips

Dave Clark's bankruptcy mean test form is expanded yet simplified. It is designed to assist debtors who want to improve their results and qualify for Chapter 7. Extensive instructions, tips and examples appear within the accompanying manual. These aids show clearly how average people may begin planning weeks or months in advance and perhaps qualify for a quick discharge under Chapter 7.

Timing is critical. A few people already qualify for Chapter 7. Many people simply earn too much and will never qualify. However, average and above average earners may qualify if making small lifestyle changes within the 6-month calculation period.

In addition, even if filing Chapter 7 bankruptcy is not possible, all people who file may significantly reduce Chapter 13 payments. These changes may save 10's of thousands of wasted dollars over the term of a repayment plan. In exchange for a few hours, potential savings of $20,000 to $30,000 and more are common.

To discover your potential, see: Means Test Strategy to File Bankruptcy Yourself