What should you do before filing for bankruptcy? There are things you will need to do in preparation for filing bankruptcy. These may vary from state to state, check with your local laws or a lawyer for bankrutpcy help.
Checklist
Due to the individualized nature of a chapter 13 filing, this checklist will only apply to chapter 7. A detailed discussion with a attorney would be advisable if chapter 13 is your option.
Go Back - this is the time frame the court will require you to provide records such as bank statements, retirement statement, stocks, bonds and other asset records. The general range for this is usually 3 to 4 months.
Retirement Accounts - 250k is the general amount the court allows you to exempt from this bankruptcy.
Cars - you are allowed to keep one car valued at 15k or less (as of this date).
Assets - reasonable goods such as clothes, appliances are exempt. You are allowed to keep 1k in cash before they penalize you.
Disputes - lenders can go back past 4 months if they can prove you abused your credit lines by doing cash advances, purchases or any other use of credit while you were knowingly going to file for bankruptcy. This is generally hard to do unless it was so obvious due to your charge pattern.
People have tried to hide things from the courts and some have gotten away with it, but if caught this will jeopardize you right to file. If you prepare legally and pay attention to the time frames you will have no need to panic.
Of course, if you exceed the limits of what you are allowed to keep you will be forced to sell or adjust your filing.
Advantages of Hiring a Lawyer
Knowing the rules, filling out the paperwork properly the first time and making sure you include all your liabilities are the benefits of hiring a lawyer. Even a paralegal with experience can be a good choice too. Going in front of the court can be a intimidating experience so, all and all the cost of an attorney can be well worth it.
How About the Emotional Side?
Many people find bankruptcy embarrassing, confusing, stressful and even lonely. That's why you need to keep reading, read about the process, know what to expect and realize this is a part of the capitalistic system.
Of course one never intended for this to happen, but it does and it will as long as this system exists.
This can be a lonely process because you don't want people to know about it, just remember millionaires have gone bankrupt, what's important is they came back. If you want to think about anything think about that, how will you come back.
