With limited exceptions, § 109(h) of the Bankruptcy Code
requires that all individual debtors who file for bankruptcy relief on or after
October 17, 2005, receive a briefing that outlines the available opportunities
for credit counseling and provides assistance in performing a budget analysis.
The briefing must be given within 180 days before the bankruptcy filing. The
briefing may be provided individually or in a group (including briefings
conducted by telephone or on the Internet) and must be provided by a nonprofit
budget and credit counseling agency approved by the United States trustee or
bankruptcy administrator. The clerk of the bankruptcy court has a list that you
may consult of the approved budget and credit counseling agencies.
In addition, after filing a bankruptcy case, an individual
debtor generally must complete a financial management instructional course
before he or she can receive a discharge. The clerk also has a list of approved
financial management instructional courses.
2. The Four Chapters of the Bankruptcy
Code Available to Individual Consumer Debtors
Chapter 7: Liquidation ($240 filing fee, $39 administrative fee,
$15 trustee surcharge: Total fee $299)
1. Chapter 7 is designed for debtors in financial difficulty who
do not have the ability to pay their existing debts. Debtors whose debts are
primarily consumer debts are subject to a “means test” designed to determine
whether the case should be permitted to proceed under chapter 7. If your income
is greater than the median income for your state of residence and family size,
in some cases, creditors have the right to file a motion requesting that the
court dismiss your case under § 707(b) of the Code. It is up to the court to
decide whether the case should be dismissed.
2. Under chapter 7, you may claim certain of your property as
exempt under governing law. A trustee may have the right to take possession of
and sell the remaining property that is not exempt and use the sale proceeds to
pay your creditors.
3. The purpose of filing a chapter 7 case is to obtain a
discharge of your existing debts. If, however, you are found to have committed
certain kinds of improper conduct described in the Bankruptcy Code, the court
may deny your discharge and, if it does, the purpose for which you filed the
bankruptcy petition will be defeated.
4. Even if you receive a general discharge, some particular
debts are not discharged under the law. Therefore, you may still be responsible
for most taxes and student loans; debts incurred to pay non-dischargeable taxes;
domestic support and property settlement obligations; most fines, penalties,
forfeitures, and criminal restitution obligations; certain debts which are not
properly listed in your bankruptcy papers; and debts for death or personal
injury caused by operating a motor vehicle, vessel, or aircraft while
intoxicated from alcohol or drugs. Also, if a creditor can prove that a debt
arose from fraud, breach of fiduciary duty, or theft, or from a willful and
malicious injury, the bankruptcy court may determine that the debt is not
Chapter 13: Repayment of All or Part of
the Debts of an Individual with Regular Income ($235 filing fee, $39
administrative fee: Total fee $274)
1. Chapter 13 is designed for individuals with regular income
who would like to pay all or part of their debts in installments over a period
of time. You are only eligible for chapter 13 if your debts do not exceed
certain dollar amounts set forth in the Bankruptcy Code.
2. Under chapter 13, you must file with the court a plan to
repay your creditors all or part of the money that you owe them, using your
future earnings. The period allowed by the court to repay your debts may be
three years or five years, depending upon your income and other factors. The
court must approve your plan before it can take effect.
3. After completing the payments under your plan, your debts are
generally discharged except for domestic support obligations; most student
loans; certain taxes; most criminal fines and restitution obligations; certain
debts which are not properly listed in your bankruptcy papers; certain debts for
acts that caused death or personal injury; and certain long term secured
Chapter 11: Reorganization ($1000 filing
fee, $39 administrative fee: Total fee $1039)
Chapter 11 is designed for the reorganization of a business but
is also available to consumer debtors. Its provisions are quite complicated, and
any decision by an individual to file a chapter 11 petition should be reviewed
with an attorney.
Chapter 12: Family Farmer or Fisherman
($200 filing fee, $39 administrative fee: Total fee $239)
Chapter 12 is designed to permit family farmers and fishermen to
repay their debts over a period of time from future earnings and is similar to
chapter 13. The eligibility requirements are restrictive, limiting its use to
those whose income arises primarily from a family-owned farm or commercial
3. Bankruptcy Crimes and Availability of
Bankruptcy Papers to Law Enforcement Officials
A person who knowingly and fraudulently conceals assets or makes
a false oath or statement under penalty of perjury, either orally or in writing,
in connection with a bankruptcy case is subject to a fine, imprisonment, or
both. All information supplied by a debtor in connection with a bankruptcy case
is subject to examination by the Attorney General acting through the Office of
the United States Trustee, the Office of the United States Attorney, and other
components and employees of the Department of Justice.
521(a)(1) of the Bankruptcy Code requires that you promptly file detailed
information regarding your creditors, assets, liabilities, income, expenses and
general financial condition. Your bankruptcy case may be dismissed if this
information is not filed with the court within the time deadlines set by the
Bankruptcy Code, the Bankruptcy Rules, and the local rules of the court.
Certificate of [Non-Attorney] Bankruptcy Petition Preparer