Steps to Follow Before Filing for Bankruptcy

Nobody anticipates filing or bankruptcy. It really shouldn’t be done unless it your absolute last resort. Sometimes when you are down and low, it may be your only option. If you do consider filing for bankruptcy, be sure to educate yourself about the outcomes of its course, so you know what to expect. Before making the final decision to file, there are a few things that you should do.

Take a moment to list all of your assets. Speak with an attorney to find out which items won’t be counted towards your bankruptcy. You definitely don’t want any types of surprises later on. It is important to make sure some of your most important assets won’t be seized from the bank. Do some research to find out about any cars that you may own, bank accounts, CD’s, or any other monetary assets that you own.

A bankruptcy trustee often wants copies of your previous tax returns. If you haven’t kept copies, speak with your tax accountant or contact the company who filed your taxes. If you are unable to get copies that way, call the IRS for copies. It is always important to keep copies of your tax returns for future reference.

Make sure you understand what happens when you file or bankruptcy. If possible, speak with any friends or family who might have done so. You can learn first hand what their experiences were. You can also speak with a bankruptcy trustee or attorney and they will answer any questions that you have.

Look over all of the debts that you owe one more time. Be sure to stop payments on any of the ones that you will file for the bankruptcy with. Keep all of your debts written down or typed onto a computer or storage device. Find out which debts won’t be able to be discharged. Sometimes there are debts that won’t be included with the bankruptcy. If you have some that won’t be included, make payment arrangements with the companies.

There is nothing worse than being disorganized. Be sure to have all of the documentation that your bankruptcy attorney or trustee asked for. Store them in a file folder or briefcase. Be sure to have copies for yourself as well. When you don’t have all of the correct documentation, it slows down the processing.

There is nothing to be ashamed of if you have to file for bankruptcy. While it will be a sore spot on your credit report for the next 7 years, you can think of it as a way of starting over. After filing, do not apply for credit cards or loans that you will be unable to repay. Try to pay everything with cash that you have on hand. There is nothing worse than debts hanging over your head.