Planning and Preparing for Bankruptcy

Bankruptcy might seem scary, but it’s sometimes the best solution to get yourself out of financial trouble. If you’ve exhausted all options to help you financially, and you’ve found that bankruptcy might be the only way, then the least you can do is to prepare yourself for the worst before you officially file for it. Here’s some practical advice for you to ensure that you can weather the storm:

Hire a bankruptcy attorney

An experienced bankruptcy attorney can assist you when it comes to planning ahead, exploring any possible options to relieve you of debt, and understanding the implications of what will happen when you file for bankruptcy. The process is quite complicated and requires tons of paperwork. Any errors in the information you provide, regardless of how seemingly insignificant, might get you in trouble. This is why you’ll need an attorney to help you acquire, correctly fill out, and submit all the necessary documentation. Since there are different types of bankruptcy out there, your attorney can also help you determine which kind is appropriate for your specific situation.

Complete your Credit Counseling Course

It’s mandatory that you complete a Credit Counseling Course to help you better prepare for your new circumstances. Much of what is covered in this course will be found on the bankruptcy forms, so it’s helpful to be knowledgeable about it. You’ll have to pay a small fee to take it, and it only takes around two to three hours to finish.

Produce an accurate record of your financial status

You’ll be required to report your complete financial information on the forms. To help you and your attorney create a full and accurate picture of your financial status, you should compile your bills, credit reports, and a list of everything you owe. You should also gather documents that demonstrate your expenses, income, and assets. Any property under your name and its corresponding value should also be listed down as well. If you don’t know how much a certain luxury item is, you should have it appraised.

computation of finances

Set up a reasonable budget

Filing for bankruptcy will render you unable to use credit. This is the perfect time to set up a reasonable budget that you should stick to. You can also ask your attorney to help you craft one too. The best way to start would be to make a comprehensive list of your expenditures per month. From there, try to get rid of any unnecessary expenses and whittle it down to only the essentials.

Be cautious about your financial activity

Any financial actions that you take within the last six months before you file your bankruptcy case will be thoroughly evaluated by the court. This means that you need to halt any activity that may seem suspicious or odd, such as keeping a large sum of money for another person. To make sure that you’re complying with the necessary actions, it’ll be helpful to divulge any and all information about what you have in your accounts to your attorney.

Filing for bankruptcy doesn’t have to be such a daunting task if you adequately prepare for it. This practical advice will help you take hold of your financial situation and prepare for the worst.

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