Filing for bankruptcy is a major financial decision that requires preparation, planning, and guidance. Many people in Utah and across the country turn to bankruptcy when debt feels overwhelming and other options no longer work.
Understanding how to prepare for the bankruptcy process and how to begin under Chapter 7 or Chapter 13 can help you move forward with confidence.
At Blue Bee Bankruptcy in Salt Lake City, we help individuals and families navigate both Chapter 7 and Chapter 13 filings.
Each type of bankruptcy comes with specific requirements and steps. In this article, you will learn how to prepare for bankruptcy, what documents you need, and how the process begins for both Chapter 7 and Chapter 13.
Before you prepare, it helps to understand the basics of Chapter 7 and Chapter 13 bankruptcy.
Both types of bankruptcy offer powerful debt relief, but they require different preparation steps.
The first step in preparing for bankruptcy is to get a clear picture of your finances. Gather information on:
This evaluation helps determine whether Chapter 7 or Chapter 13 fits your situation. For example, if you have little disposable income and mostly unsecured debt, Chapter 7 may be the right choice. If you earn a steady income and need to catch up on a mortgage or car loan, Chapter 13 may work better.
An experienced bankruptcy attorney can review your financial situation and recommend the best path forward.
Federal law requires every person who files for bankruptcy to complete a credit counseling course from an approved provider.
This course must be completed within 180 days before filing. The counseling session helps you review your financial options and confirm that bankruptcy is necessary.
Once completed, you will receive a certificate of completion, which must be filed with your bankruptcy petition.
Bankruptcy requires detailed documentation. Begin collecting the following as early as possible:
Organizing these documents in advance speeds up the filing process. Your attorney will use this information to prepare your petition and schedules.
If you plan to file for Chapter 7, you must pass the means test. This test compares your household income to the median income for a household of your size in Utah.
Because the means test involves complex formulas, it is important to work with a bankruptcy attorney who understands Utah’s requirements.
After reviewing your finances, completing credit counseling, and considering eligibility requirements, you and your attorney will decide whether Chapter 7 or Chapter 13 is the best path.
Choose Chapter 7 if you cannot afford to pay back debt and you qualify under the means test.
Choose Chapter 13 if you have steady income and want to protect assets such as your home from foreclosure while catching up on past-due payments.
Once you and your attorney decide to move forward with Chapter 7, here is what to expect:
Your attorney prepares and files your bankruptcy petition with the Utah bankruptcy court. This petition includes schedules of your debts, assets, income, and expenses.
Immediately after filing, the court issues an automatic stay. This powerful order stops creditor collection efforts, including lawsuits, wage garnishments, phone calls, and foreclosure actions.
The court assigns a bankruptcy trustee to review your case. The trustee examines your petition and may sell non-exempt assets to pay creditors. Most people in Chapter 7 do not lose property due to available exemptions.
You must attend a meeting of creditors, often called the 341 meeting. The trustee asks questions about your finances, and creditors may attend, although they rarely do. Your attorney will attend this meeting with you.
If no complications arise, the court grants a discharge of qualifying debts within three to five months. This discharge legally eliminates your obligation to repay those debts.
If you file Chapter 13, the process has different steps:
Your attorney files your petition along with a proposed repayment plan. This plan outlines how you will repay creditors over three to five years.
Just like in Chapter 7, the automatic stay stops all creditor collection actions. This protection is especially valuable if you face foreclosure or repossession.
The court appoints a trustee to oversee your repayment plan. You begin making plan payments within 30 days of filing, even before the court confirms your plan.
The court holds a confirmation hearing to approve your repayment plan. Creditors may object, but your attorney will respond to these objections. Once approved, your plan becomes binding.
As long as you make your monthly payments, you continue under the plan for three to five years. At the end, the court discharges any remaining qualifying unsecured debts.
Bankruptcy is not just a financial process. It also comes with emotional challenges.
Many people feel shame or fear about filing. Remember that bankruptcy is a legal tool designed to give you a fresh start. Millions of Americans use it every year to rebuild their financial lives.
Practical preparation also matters. Create a budget, track your expenses, and commit to better financial habits moving forward. Bankruptcy gives you a clean slate, but long-term success depends on how you manage your finances afterward.
While it is possible to file for bankruptcy on your own, it is rarely a good idea. Bankruptcy law is complex, and mistakes can cost you valuable assets or even lead to dismissal of your case.
A qualified and experienced bankruptcy attorney will:
At Blue Bee Bankruptcy in Salt Lake City, we have the experience and dedication to help you through this process from start to finish.
Preparing for bankruptcy requires careful planning, organization, and professional guidance.
Whether you file Chapter 7 or Chapter 13, the steps include evaluating your finances, completing credit counseling, gathering documents, and working with an attorney to file your petition.
Bankruptcy can be the turning point that allows you to break free from overwhelming debt and build a stronger financial future. If you are considering bankruptcy in Utah, contact Blue Bee Bankruptcy today.
Our team is ready to help you prepare for and begin the process with confidence.
If you’re dealing with the potential of bankruptcy, give us a call. Our team will work to help you by reviewing all of the options our firm has available. We will ensure you’ll get the best possible outcome for your situation.
Get in touch today so we can start working on either halting bankruptcies or preventing them from taking place altogether!
Contact Us Today For Help! You can schedule your free consultation online or call us at (801) 285-0980.
