No one wants to file bankruptcy…but if you are going to file, you want it to be successful. After all, you are going to take the hit to your credit you might as well make it count. Here are five super important keys to bankruptcy success for those of you who live in Arizona (and other places as well):
#1 – Trust Your Bankruptcy Lawyer
Your bankruptcy lawyer is here to help you. Pretty much all of the bankruptcy lawyers I know here in Arizona are good people who truly care about their clients. Your bankruptcy lawyer has likely done this hundreds to thousands of times prior to you hiring them. I have seen problems arise when clients believe that they can’t or shouldn’t be completely candid with their attorney. Or in response to a question or a request by their attorney some clients will simply disregard the request because they “know better”.
In order for your bankruptcy to be a success it has to get started on the right foot. The only way that will happen is if you are completely candid with your chosen attorney. I realize that sharing all of your financial misfortunes is no fun and often embarrassing. But by placing your trust in your bankruptcy attorney and providing everything that is asked for potential problems can be dealt with and your case will be a success.
#2 – Understand Your Role
Hiring a bankruptcy lawyer is a great help for those going through the bankruptcy process. However, your attorney cannot do it all. You must understand that you must be an active participant in your bankruptcy case. You and your lawyer are really partners in the process. Your lawyer will act more as a guide as you navigate the bankruptcy court.
If you are unwilling to take ownership of your case and do the things that will be asked of you it will make your bankruptcy much more difficult. In Arizona the bankruptcy process requires the debtor (you) to do things like send to documents to your bankruptcy trustee, complete online credit counseling courses, and appear at hearings. Your attorney can do nothing without the information you provide him.
If you are willing to shoulder your portion of the load your bankruptcy attorney will be able to help you successfully navigate the bankruptcy process.
#3 – Don’t Lose Sight of the Big Picture
Sometimes, in both chapter 7 and chapter 13 bankruptcy cases, there are times when assets may be lost or where you will be required to turn over a tax refund or where the court will ask for documents or information that will require work and inconvenience on your part. I understand that none of this fun – particularly if there is an asset that must be turned over.
It helps to muscle through these hard times if you keep the big picture in mind. In most cases you will be getting a complete discharge of all your unsecured debts. That $50,000 in credit card debt you currently have will suddenly disappear. Debts that would have weighed you down and taken literally the rest of your life will now be gone.
Bankruptcy is a powerful tool. Debts that you rightfully incurred will be completely eliminated. I don’t say that try and make people feel guilty about bankruptcy – just to demonstrate that the elimination of your debts through the bankruptcy process is a big deal. It is a rare showing of mercy by the law.
#4 – Embrace the Details
The typical packet of documents that is filed in a bankruptcy case is usually about 45-60 pages long. Everyone of those pages is filled with information about your assets, debts, and financial condition. It is an incredible amount of information. As part of your role as a partner in your bankruptcy you need to be prepared to submit detailed information to your bankruptcy lawyer.
If your lawyer asks for 6 months of paystubs (and I will), don’t give him 5 months and 2 weeks worth. The full 6 months is what is required and 5 months and 2 weeks’ worth simply won’t do. If you made $48,567 last year, don’t tell your attorney you made $48k. In bankruptcy the details matter – a lot. Help your attorney to help you. Be detailed oriented in the bankruptcy process.
#5 – Take Advantage of Your Fresh Start
Part of having a successful bankruptcy is taking full advantage of this new lease on your financial life. Most of my clients are shocked that shortly after their bankruptcy case has been filed their mail box is full of credit card applications and car loan offers. When you emerge from bankruptcy you won’t be able to file again for several years and now that you have no debt some lenders will see you as a good credit risk. Don’t take the bait. Change your approach to financial matters now so that you can avoid the debt problems that you suffered through in the past.
Part of this is getting new perspective on money issues. Because I believe that eliminating your debt is only half of the process – the other being your total financial recovery – I have all my clients take a course presented by Dave Ramsey. I have received nothing but positive comments back on this course and I think it is highly helpful for anyone wanting to learn more about money management.
Your bankruptcy discharge is giving you the rare opportunity in life to start over. Take advantage of this unique time in your life to regroup and move forward stronger than ever!