What You Need to Do Before Filing for Bankruptcy

When you have financial stress, it’s tempting to try to do anything to stop the pressure. With a bit of planning, your bankruptcy should run smoothly. Here’s a few tips on what you need to do before you file bankruptcy, whether it’s Chapter 7 or Chapter 13.

Don’t rush into it

Bankruptcy works well to wipe out debt, but don’t rush into it. Keep in mind that you can only get a discharge with Chapter 7 every 8 years. And with a chapter 13 bankruptcy, you can only get a discharge every 6 years. And if you have  been accumulating debt due to an illness, you may want to wait until your medical condition stabilizes. At the same time, there may be circumstances when it’s best to file bankruptcy quickly. For example if there is a wage garnishment, the more money you get the faster you can pay off your bills.

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Creditors and lawsuits

Another example is if a creditor has a current lawsuit against you. You may not be able to wipe out that debt in a bankruptcy. If the creditor wins a judgement, your home can be foreclosed, your cars can be repossessed, and your bank accounts can be seized. Filing a bankruptcy quickly can prevent these things from occurring.

Keep in mind that bankruptcy does not give full protection from liens. A lien can be attached to your property. It’s really very complicated. That’s why it’s important you contact a Columbus bankruptcy lawyer to assist you with your bankruptcy.

You also need to avoid draining your retirement account before filing for bankruptcy. Most retirement funds are protected in a bankruptcy. There’s no need to use your nest egg to pay off your debt when a bankruptcy will eliminate it for you.

Honesty and accuracy are paramount

It is important to mention that you need to provide accurate and honest information regarding your bankruptcy. There are penalties for perjury. You are required to provide accurate information about debt, assets, expenses, income and financial history.

Perjury penalties include either a $250,000 fine or 20 years in jail. And if you provide incomplete information on your bankruptcy paperwork, the court just made dismiss your case.  And if you forget to list an asset, a trustee of the court can seize that asset.

This is why it is extremely important to provide complete information on your bankruptcy paperwork. Be sure not to leave anything out. The FBI investigates all bankruptcy crimes.

Piling up new debts

Be sure not to pile up new debt before you file for your bankruptcy. If you wrap up debt after 90 days before filing bankruptcy, you could have troubles. Unless it’s for food utilities or closing, do not do it. A creditor might object to your discharge if you do this.

If you use a credit card to purchase luxury items before filing for bankruptcy, it is considered presumptive fraud. Meaning that you never intended to pay with your debt. If you do this, you just not may be able to get a discharge for your debt. In addition, you may be subject to criminal penalties.

Your assets should stay put

Keep your assets put before filing bankruptcy and do not try to move them. Avoid the temptation of trying to sell your assets or to hide assets before filing for bankruptcy. Again, you could risk being able to get a discharge, and you also risk incurring criminal penalties. Just don’t do it. It is not worth the risk, but if you have sold property prior to filing a bankruptcy to pay for food, shelter and clothing, that is acceptable. Just be prepared to provide the proper documents to support this. In this case, there is no wrongdoing on your part.

Whenever you file for a bankruptcy, you must always be honest and transparent about everything.  Your creditors and the court have the legal right to know everything.

Consult a bankruptcy attorney

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Whenever you’re filing for bankruptcy, it is always wise to consult with a bankruptcy attorney before doing so. They will help you select the best bankruptcy for your particular circumstances. In addition, a bankruptcy attorney may even provide you with other options instead of filing for a bankruptcy. Filing for a bankruptcy can be stressful.

A bankruptcy attorney can help lessen the stress for you. Keep in mind that there are a lot of rules, laws and regulations when filing for a bankruptcy. A bankruptcy attorney will ensure that you’ve got your i’s and your t’s crossed. This way, you won’t wind up in any legal trouble if you should make a mistake.

If you are thinking about filing for a bankruptcy, call a bankruptcy attorney today. You will be provided with a free consultation. This way, you have all the information you need in order to make an informed decision. Get peace of mind today and call a bankruptcy attorney today.


Interesting related article: “What is Debt?