Filing for Bankruptcy: First Steps

Filing for bankruptcy is a difficult decision, but it is often the first step toward getting your finances in order. If you’re considering bankruptcy, here are some things you can do to get the process started properly.

If at all possible, discuss your bankruptcy with a lawyer. Other options may work better for you than filing for bankruptcy; sometimes debt consolidation or loan refinancing are good choices, and a bankruptcy lawyer has the experience to evaluate what best suits your circumstances. If bankruptcy is the most appropriate choice, a lawyer will be able to give you guidance as to which type of bankruptcy will be most beneficial for you and which type of bankruptcy you’re eligible for.

Take the time to document your income, your assets, your expenses, and your debts. Keep all your financial records. You’ll need bank statements, brokerage statements, tax appraisals on property, documentation on liens or legal judgments against you, collection letters, bills, and tax returns. Do an inventory. Make a list of your assets and make a guess about the current value of each asset. Include real estate, household goods, vehicles, stocks, insurance, bank accounts, and retirement accounts.

Look into credit counseling. Undergoing credit counseling is a requirement for bankruptcy, and it may be useful in any case. The agency providing the counseling must be approved and you need to keep your certificate of completion to file with your bankruptcy petition. These classes include information about handling personal finances. The class will also provide you with information about Chapter 7 versus Chapter 13 and the eligibility requirements. Your lawyer can advise you as to when is the best time to take the course.

Once you’ve decided to file for bankruptcy, stop using your credit cards. You may not be able to keep anything significant that was purchased within 90 days of filing for bankruptcy, and large purchases you make with a credit card you don’t intend to pay off may look like fraudulent activity. Don’t give valuable items away; this looks to the court as if you’re trying to hide assets.

Try not to worry! You’re taking positive steps towards getting your finances back on a firm footing. After your attorney files your case, your creditors have to leave you alone. With aggravating phone calls a thing of the past, you’ll have time and energy to enjoy your life again. If you’d like to learn more, or if you’re ready to start the bankruptycy process, please get in touch with us today!