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The first step to prepare for bankruptcy is to gather proof of your income. Copies of your tax returns and copies of proof of income for the past six months are required when you file a Chapter 7 case. To prepare for bankruptcy under Chapter 7, you must complete the Chapter 7 Means Test.
What debts aren't affected? Declaring bankruptcy won't wipe out all debts and some types of debt will survive the bankruptcy. In other words, if you declare yourself bankrupt, you will still be required to pay: court-ordered penalties and fines.
Examples of other non-dischargeable debts in a Chapter 7 bankruptcy case include:401k loans.Other government debt such as fines and penalties.Restitution for criminal acts.Debt arising from fraud or false pretenses.Debts you intentionally did not include in your bankruptcy forms.Damages related to a DUI accident.
While the goal of both Chapter 7 and Chapter 13 bankruptcy is to put your debts behind you so that you can move on with your life, not all debts are eligible for discharge.
Here are common mistakes you should avoid before filing for bankruptcy.Lying about Your Assets.Not Consulting an Attorney.Giving Assets (Or Payments) To Family Members.Running Up Credit Card Debt.Taking on New Debt.Raiding The 401(k)Transferring Property to Family or Friends.Not Doing Your Research.