If you have done all you can, but you are not able to pull yourself back up financially, and you feel that filing for bankruptcy is your only resort, here are some personal bankruptcy filing tips that may help you make the process a little less stressful. And with the effects of the current pandemic, I fear more and more individuals will be following the corporations and seeking relief via this route.
When you file for bankruptcy protection, you are immediately safe from creditors’ calls and repossessions. A creditor cannot legally contact you while your bankruptcy has been filed, and after it has been discharged, they will not have a reason to contact you since all your debts will have either been wiped out, Chapter 7, or you have a repayment plan in place, Chapter 13.
Here are the steps you will need to take:
- Decide whether or not you will be hiring an attorney. For most people, it is advisable since bankruptcy laws are complicated and are different from one state to the next. If you decide to hire an attorney, take the opportunity to meet with several. Make sure you ask for a fee schedule, this is not the same as asking them how much your case will cost, it just means you know how much they will charge per hour and what other fees you may incur.
- Gather up copies of all three credit reports as well as a thorough listing of all your debts and assets. This will include all loans, whether they are secured or unsecured, medical bills, and a complete listing of any accounts such as savings or checking that you have. Make sure to include a full listing of any investments you may have and their current value.
It is not a good idea to leave anything out. If it is found out later, you will face serious legal issues, be honest. In many states, you will be allowed to keep some personal property like your home and a car. It does vary not only from state to state but also depending on how much equity you may have in your home. Many states will set limits to the amount of equity you can have in your home and still be able to keep it.
- When gathering up your paperwork, make sure to include the last few years of income tax records along with all your pay stubs for several months.
- Once you have hired your attorney, have an honest conversation about what option you should choose, Chapter 7 or Chapter 13. Each form has its pros and cons, and your attorney can help you decide which form would be best for you and your circumstances.
- Even if you choose to hire an attorney, make sure you are as proactive during the process as possible. It would help if you stayed in close contact with your attorney to make sure there are no surprises. It would be best if you also went to all the hearings even though this can be a time consuming and stressful thing to do.
The truth is that many people will hire an attorney and step back. That is not a good idea. Any good attorney will have dozens of clients, and while you would like to think that they have all the facts about your case readily available, the fact is that they can overlook and forget things. You must pay close attention so you can point out any oversights to your attorney. After all, this is your life, and your future is on the line.
If the time comes to do a personal bankruptcy filing, the tips listed above can take at least a little of the fear out of the process. You have heard the saying that knowledge is power. Use this knowledge to help you make this difficult time a little less stressful.
In addition to seeking the counsel of a bankruptcy attorney, it may also be wise to seek out the assistance of a fee-only Registered Financial Consultant who could be in a position to advise you on a course other than bankruptcy.
If you need assistance, feel free to reach out to me directly or leave a message below. Also, if you wish to receive our email newsletter, fill out the form below.
