Understanding the Chapter 7 Bankruptcy Petition: A Step-by-Step Guide

Welcome to this first video in a series where I’ll be breaking down the Chapter 7 bankruptcy petition.

If you’ve been following my blog, Bankruptcy.Blog, or my YouTube channel, you know I discuss debt, bankruptcy, and how current events impact our economy. I’ve done chapter summaries of my bankruptcy law textbook before, mainly for legal professionals and students, but this series is different. I’m going to go through each specific part of the Chapter 7 bankruptcy petition in detail.

Listen to this podcast.

This will be helpful for everyone – paralegals, students, and even individuals representing themselves (pro se debtors). I’ll be very thorough, starting with the very first section. I’ll include a link in the description below where you can access these forms.

Voluntary Petition for Individuals Filing for Bankruptcy

Let’s start with the basics: where are you filing for bankruptcy? It might sound obvious, but getting this wrong can cause major problems, including which bankruptcy chapter you even file.

For example, in the Southern District of Florida, North Miami, cases are often pushed up to Broward County, which can be inconvenient for bankruptcy attorneys, even if it’s geographically closer for clients. Filing in the wrong jurisdiction can lead to your case being dismissed, requiring you to file motions and potentially refile at your own expense. So, accuracy is key.

Part 1. Identify Yourself:

Next, we have your name and your spouse’s name. Why is this important? At the 341 meeting of creditors (I have blog posts and videos about this, links below), the trustee will compare your ID to the petition. If they don’t match, your case can be held up.

In Miami, it’s sometimes a bit more lenient with the IRS being in the same building, but generally, discrepancies can cause issues, potentially requiring you to come back another day, costing you time and money.

For instance, I go by “Alex Hernandez,” but my legal ID says “Alexander.” You need to include all previous names, including maiden names for your spouse, to avoid problems with the trustee.

• The 341 Meeting of Creditors. What to Expect

Even if you’re not filing a business bankruptcy, you need to include your Employer Identification Number (EIN) if you own a business. Your business is considered an asset that must be disclosed. Failing to do so can lead to a 2004 examination (like a deposition) or even a more complex adversary proceeding (a bankruptcy lawsuit).

This information will also be required later in the Statement of Financial Affairs (SOFA, Official Form B107), which is always the last form filled out. Trust me, the trustee will ask if anything was omitted, so it’s best to be upfront to ensure a smooth process.

Now, why are there different address fields for you and your spouse? This significantly impacts the bankruptcy petition. Sometimes, lawyers might (with a wink-wink) suggest that a client might qualify for bankruptcy if they were separated because their spouse’s income wouldn’t be included.

However, if you are separated, the trustee will ask more questions to verify. Your current residence is also important because it ties into the homestead exemption. Regardless of the district, your primary residence must be your homestead to be protected. Remember, homestead in bankruptcy is different from the homestead tax exemption.

All your addresses should match your identification. If they don’t, especially with owned homes, it can raise red flags with the trustee. For renters, an explanation for address changes (like moving) is usually sufficient.

• Understanding the Bankruptcy Homestead Exemption

Regarding residency requirements, I’m currently working on a series covering state-specific exemptions and trustee contact information. You generally need to have lived in the filing district for at least 91 out of the last 180 days. But it doesn’t stop there.

For example, while Florida offers unlimited homestead exemption, you need to have lived there for two years (730 days) to use those exemptions, and you must have owned the property for 1215 days to claim the homestead exemption. This illustrates why your residency is crucial, especially if you’re relocating and considering where to file. The state where you file can significantly impact the protections available to you.

• Where to File for Bankruptcy: Understanding Residency Requirements

Choosing the correct bankruptcy chapter is also vital. I often see pro se debtors and even some lawyers mistakenly file a Chapter 7 bankruptcy petition when they’re behind on car or mortgage payments, thinking they don’t have to pay anything back. But if you want to keep your car or home and you’re behind, you MUST file Chapter 13. There are no exceptions to this rule.

When it comes to filing fees, unless it’s a genuine emergency, I recommend paying them upfront. While it’s easy for me to say, since it’s not my money, it avoids the risk of dismissal. If you have an attorney, and you can afford one, you should be able to afford the filing fees. However, you can request a payment plan from the court.

Part 2. Tell the Court About Your Bankruptcy Case

Have You Filed for Bankruptcy in the Last 8 Years?

The petition asks if you’ve filed for bankruptcy in the last eight years. This is because the Bankruptcy Code has this restriction. The court also looks for bad-faith filings. My textbook discusses a case where someone filed multiple times in eight years solely to benefit from the automatic stay (which temporarily stops lawsuits and evictions upon filing).

The judge eventually barred him from filing in any district for five years. If you’re filing again due to something like a foreclosure, it depends on the specifics. I might not take a case if it’s a repeated filing just after a previous dismissal with prejudice (meaning you can’t refile for a certain period). I have to be ethical and avoid appearing to file in bad faith.

Prior or Pending Cases with Your Spouse

This next point is very important. Always talk to your lawyer before taking action that could complicate your bankruptcy. For example, if you’re getting divorced and selling your house, the proceeds might not be protected unless they are rolled over to a new property. In such cases, it might be best to file for bankruptcy together with your spouse before the divorce is finalized to protect the home equity, even if you’re separating.

While Florida, as an example, has a generous homestead exemption (fully protected), the cash from selling it isn’t automatically protected in your bank account. So, if a divorce is pending, consider how it will affect your bankruptcy.

You’ll also be asked if your residence is subject to eviction. Evictions now have separate forms and procedures under the “new” law (passed in 2005, but we still call it new!). You can’t just file bankruptcy to stop an eviction anymore; you often have to deposit rent into the court registry.

If you own a business, make sure to disclose it. Even if it’s an LLC, it’s still an asset in bankruptcy. The protections of business law don’t necessarily apply in bankruptcy. Your LLC might offer some liability protection, but it doesn’t shield the business itself from the bankruptcy trustee. I have separate blog posts on this (links below).

• Why LLCs Don’t Fully Protect You from Bankruptcy

Hazardous materials generally don’t apply to most filers, so I won’t go into that. But credit counseling is crucial. With the software I use, it prompts me to confirm that the course was completed before filing. If your certificate shows completion after the filing time, that’s a problem.

The certificate is valid for 180 days. While there used to be a 14-day requirement that made extensions somewhat relevant, with online courses, it’s usually easy to complete them quickly.

I strongly advise against seeking a waiver or extension unless you have a valid reason, like disability or incapacitation. It’s up to the judge’s discretion, and if your reason isn’t sufficient, your case could be dismissed, leading to more delays and costs. Just complete the class.

Part 6. Answer These Questions for Reporting Purposes

The rest of this section is fairly self-explanatory, asking about the primary nature of your debts (consumer or business) and which chapter you’re filing under. Software usually calculates the relevant figures automatically. For your signature, if you’re filing on your own, make sure it’s there. Attorneys filing electronically have a different process.

So, that covers Section 1 of the Chapter 7 bankruptcy petition. If you have any questions or comments, please feel free to post them in the comments section of the video.

You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.

You can find additional categories by clicking below or by using the search feature at the top of this page:

• Bankruptcy
• Your Wallet

Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.

Updated on August 30, 2025.