How to Prepare for Filing Bankruptcy

If you find yourself in a situation where you have too much debt that it has become impossible to manage and you have tried everything you can think of, it may be time to consider the option of bankruptcy. Most people don’t even consider bankruptcy as an option due to the stigma that it carries, but it is tool that is there to provide relief and a fresh start for those who really need it. If you are considering filing bankruptcy, there are a several things you should do before you file.

Debt Payments
It is advised that you do not pay above the normal balance that you owe to any creditor six months before you file, you may be doing it in good faith but to the court it may look like favoritism to a specific creditor. You can also elect to not continue paying your unsecured debts, if you have any.

Keep records of collection attempts
It is advisable to keep some sort of log detailing any collection calls by creditors, this can include the name, date, and time the creditor tried to collect. It may seem a bit tedious but it could also be beneficial for you since you have federal rights that protect you from harassment from collectors.

Refrain from extravagant expenses
It is important that you do not make any big expenses or go all out simply because you are planning on filing for bankruptcy. Doing so can be harmful to your eligibility to and it can be seen as fraudulent. Making large purposes with the intent of not paying back and planning on filing bankruptcy is considered taking advantage of the system and you can be prosecuted for that. Instead of spending the money you have on luxuries, it is better to spend it on necessities such as food or housing.

Get all your required documents together
It is important to be prepared in advance, since time is important. During your bankruptcy process, the court will appoint a trustee to your case. The trustee will be the one that you will interact with and turn in any documents that they ask for; it is advisable to remain on good terms with the trustee since they are the ones who will state to the judge whether you should get a discharge or not. Some of the important documents to have include credit bills from the last six months, bank statements from the last six months, pay stubs or proof of income for the last six months, your driver’s license and social security card, tax returns for the last 2 years, a title report stating any liens that could be on your property , copies of your deed or mortgage, paperwork from any property transaction for the last 2 years, and a statement that shows any profit or loss if you own a business.

Attend a credit counseling class
Anyone that files for bankruptcy must take a class on credit within six months of the bankruptcy filing date. This is mandatory according to bankruptcy law; the good thing is that there are a couple of ways of taking the class; in person, over the phone, or online. Ask your attorney of if you have any questions about signing up for the class. A competent bankruptcy attorney should be able to refer you to a very low cost credit counseling course that satisfies the court’s requirements for filing bankruptcy.

Speak with an attorney about filing bankruptcy
The bankruptcy process can be difficult to maneuver if you do not have the right knowledge and experience. There are many circumstances that can affect your eligibility of filing for bankruptcy, and then it needs to be determined which Chapter you can file under. It is possible to represent yourself but it is not advised if you have no prior experience with bankruptcy courts as they can be quite difficult. Having an attorney can help you a great deal and spare you a couple of headaches.

Begin thinking of your life after your discharge
Once your debt has been discharged you are free to start over on clean slate, financially at least. It is a good idea to have some goals ion some mind to work towards to. Most people make claims such as living solely on cash from then on, which is nice but also a little inconvenient at times. It might be a good idea to try to start re-establishing some credit. Whatever your goals are, just keep them in mind as you continue to work towards your future.