Hi, I am probably going to be filing for bankruptcy due to some old apartment bills that I can’t pay for and I have a lawsuit against me because of it and I have no money to my name at the moment due to being sick for quite sometime so, I’ll have to file for bankruptcy, what happens in regards to that? I’ve been reading a bit and wanted to know what happens if you don’t have any assets to sell, because I really don’t have anything at all.
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For chapter 7 (probably what you will file if you have no income): Basically you will file a petition in federal court listing your assets, debts, and showing that you do not have sufficient income to pay those debts. A trustee will look at your petition (and any necessary documentation) and see if you have assets that 1) are not protected and 2) which could be sold to pay your creditors. You probably don’t, so then if no creditors object (they probably won’t) a judge will enter an order discharging your unsecured debts (i.e. you don’t have to pay them.) You’ll go back to paying your secured debts, if any (car, mortgage.)
If you are currently behind on your car or house payment, and wish to keep them, you will probably need to file a chapter 13, which is a longer and more complicated process of reorganization of your debts, in which the court oversees your payments to these creditors.
In any bankruptcy you will be broadly protected by the automatic stay provisions of the bankruptcy code: that is, most creditors will be unable to try to collect on a debt without permission from the court.
That’s in a nutshell. Each state has different specific rules and requirements, and allows different kinds/amounts of assets to be protected, and needless to say an attorney should advise you of your best course.
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