Bankruptcy is often the best option for people who are drowning in debt and have little hope of getting caught up. Even though you may be feeling anxious to take advantage of the relief that bankruptcy will bring, it’s not something you should just rush into without a little preparation. There are a few steps to take before filing for bankruptcy that will help the process to go more smoothly and help you to get the most out of your filing.
Meet With an Attorney
There are a lot of advertisements out there for people and websites that will help you file for bankruptcy without the help of an experienced attorney. Though this route may save you a little money in fees, it probably won’t save you money or be the best decision in the long run. A qualified bankruptcy attorney will be able to help you determine which type of bankruptcy you qualify for, which of your assets will be affected by your filing, and a lot of other details that you’ll want to get right the first time around. I’ve seen people who worked with agencies like those mentioned above who didn’t even run a credit report before filing the bankruptcy and some of their debts were left unsettled when the discharge took place. It’s best to be on the safe side and work with an attorney who knows what they’re doing.
Track Your Expenses
You will be required to complete a means test before you file for bankruptcy that will determine how much of your debt you can afford to pay back. This will be a determining factor in which type of bankruptcy you qualify for, and if you qualify at all. This process will be easier if you track your monthly income and expenses so you have a good idea of how much of your income can be allocated to debt repayment. This will also give you an idea of how much your payments will be if you file for chapter 13.
Take the Required Course
Everyone who wishes to declare bankruptcy is required to take a credit counseling course before they file. This course is conducted by a government certified credit counselor and can be taken online, over the phone, or in person. There will be another course that you have to complete after you file and before your bankruptcy can be discharged that is about debtor education.
What Not to Do
Sometimes people who know they are headed for bankruptcy are tempted to max out their credit cards before they file. This practice is fraudulent and could result in your bankruptcy being denied. Other practices you should steer clear of include trying to hide assets or transferring them to friends or family, damaging your property, or giving your property away. These actions could result in your friends and family getting in trouble right along with you.