In order to file bankruptcy, there are several steps that need to be taken and certain information you should obtain prior to filing for bankruptcy. This will expedite the process and make everything much easier for you. Please find the ten most important things to do before you file bankruptcy below:
1. Determine Which of Your Assets Would Be Exempt
The Bankruptcy Code lists what assets of a debtor will be exempt from the bankruptcy process. This mean those assets will be outside the reach of the trustee and will not be at risk of seizure. It is important to determine what assets fall within this category in order to avoid any future surprises.
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2. Get Your Tax Returns In Order
The bankruptcy trustee will require your previous year's tax return and maybe even the two prior years even though you tax debts may not be dischargeable. Having these returns handy will allow your attorney to navigate this process much quicker.
3. Educate Yourself
Whether you do this by speaking to a bankruptcy attorney or conducting research independently, it is important that you understand how a bankruptcy filing will affect you and your creditors. Our office offers free initial consultations so our clients understand not only the bankruptcy process, but what effect it will have on your following your discharge.
4. Do Not Be Afraid of the Bankruptcy Stigma
Many people feel embarrassed about filing bankruptcy because of some predetermined notion they have about the process. The fact is though that bankruptcy was developed by the government to assist people overwhelmed with debt and offer them a fresh start by eliminating their bills. Over 1.5 million people filed bankruptcy last year so don't let this embarrassment prevent you from obtaining the debt-free life that you deserve.
5. Review Your Debt
Only debts listed on your bankruptcy petition can be discharged. As a result, it is important to ensure that all debts are included. We recommend you obtain a recent credit report and gather all of your miscellaneous bills around the house in order to obtain a comprehensive overview of your situation. Contact one of our bankruptcy attorneys today in order to learn how to order this credit report for no charge.
6. Understand Which Debts Are Dischargeable
Not all debts are dischargeable in a Chapter 7 bankruptcy. The federal law provides a list of certain non-dischargeable debts, and we discuss all this with you during your free consultation. For example, student loans, alimony, and child support cannot be discharged through a Chapter 7 bankruptcy.
7. Understand the Difference Between a Chapter 7 and Chapter 13 Bankruptcy
There are several significant differences between a Chapter 7 and 13 bankruptcy. A Chapter 7 bankruptcy will eliminate all debts allowed under the law meaning you will no longer owe anything to the creditor. Under a Chapter 13 bankruptcy, a debtor is entered into a payment plan of up to 60 months, where you will pay back creditors during that timeframe. If the debtor stays current on all monthly payments, the remaining debts will be discharged following the repayment period.
8. Gather Necessary Information and Documentation
In addition to the paperwork described above, your bankruptcy attorney will require documentation and information needed to complete your petition. In order to expedite the process, it would help if you could gather a list of your monthly expenses, personal and real property you may own, investment and banking statements, and any documentation involving ownership of a house or vehicle.
9. Stop Making Payments to Those Debts That Are Going to Be Discharged
If you are sure you are going to file bankruptcy, stop making payments to any creditors who will be discharged through the bankruptcy process. Because you will no longer be liable for these debts, it would be more beneficial to put this money aside for future needs.
10. Complete the Mandatory Courses
When filing for bankruptcy, you will be required by the court to complete two mandatory courses. The first is called a Credit Counseling Course. This can be completed online for a nominal fee, and upon completion, you will receive a certificate that must be filed with the court along with your bankruptcy petition. Following your 341 Creditors' Meeting, you will be required to complete a Debtor Education Course, which can also be completed online and must be filed prior to your final discharge being ordered.
In order to determine if bankruptcy is the right option for you, please contact HUBENY & ZABA, L.L.C. today at (630) 455-0500 to schedule a free consultation where we can explain the process and answer any questions you may have. Please also feel free to long on to our website at http://www.westmontattorneys.com.
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