5 Ways to Make Your Bankruptcy Smoooooth….

by John Skiba
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The financial situations that lead up to bankruptcy are usually pretty stressful.  Collection calls, law suits, wage garnishments, all bring uncertainty and strain most people to the breaking point. The bankruptcy process doesn’t have to follow this same path.  In fact, what I tell most clients is if we (notice I said we) do a good job in preparing your bankruptcy, the actual process usually goes pretty smoothly.  Here are 5 things you can do to make sure your bankruptcy is smooth and successful:

1.     Be Detail Oriented

This one can be tough.  The typical chapter 7 bankruptcy filing consists of about 45-60 pages of documents.  These documents are full of information about your income, assets, expenses, debts, and financial transactions.  The amount of detail that is required is extensive.  This is where a problem can arise.  Many people who are dealing with big-time debt problems simply become overwhelmed.  They try to keep up with everything for a while, but eventually it gets to the point where collection letters aren’t even opened anymore and they have no idea who is actually trying to collect from them and how much.

We can overcome this, but you are going to need to provide as much detail as possible to your bankruptcy lawyer.  If you lawyer asks you to provide dates or dollar amounts, do your best to provide the actual date and the precise dollar amounts.  If you recently sold your boat for $3,200, don’t tell your lawyer that you sold it for about “three grand”.  The more detailed you are in the beginning, the less likely you will have problems down the road.

2.     Disclose Everything – No…Seriously, EVERYTHING

Fear and trust.  These are the two reasons, in my opinion, that people don’t disclose assets.  They have a fear of losing the asset during the bankruptcy and/or they don’t have trust in their attorney to do what is necessary to protect their stuff.

First, you must know that it is a felony to conceal an asset in a bankruptcy.  And when I say felony I am not talking about the FBI Warning-at-the-beginning-of-a-DVD felony, I am talking about the type of felony where people really go to jail and pay huge fines.

Second, in almost all situations if I know about an asset prior to the filing of a bankruptcy we can either protect it through local exemption laws or we can plan for you to buy it back from your bankruptcy estate.  However, if I learn about it for the first time after your case is filed my hands will likely be tied at that point and there is a good chance you will lose the asset and possibly face other sanctions.

When it doubt disclose.  Tell your attorney EVERYTHING.  This is no time for secrets.

3.     Respond to Requests from Your Lawyer, Your Bankruptcy Trustee, and Your Judge

Even though you are hiring a bankruptcy lawyer to help you through this process, you need to be aware that your active participation is mandatory.  You are going to be required to provide your lawyer with documents and information to assist them in completing your bankruptcy petition and schedules.

Likewise, once your bankruptcy case is filed you will be assigned a bankruptcy trustee who will administer your case.  Your trustee will also ask for things like pay stubs,  bank statements, and tax returns.  If you don’t comply with these requests your case will at a minimum be delayed and possibly even dismissed.

Basic rule – help me to help you.

4.     Don’t Wait Until the Last Minute

There are times when me must do what are called “emergency” bankruptcy cases.  The typical emergency occurs when there is a foreclosure sale set on your home or your wages are now getting  garnished and you need it all to stop – now.  But if truth be told, pretty much all emergency bankruptcies could be avoided with some planning.  If you are facing foreclosure on your home or if you have been sued reach out to a bankruptcy lawyer and find out what your options are.  That way if you need to file quickly you will already have the background information and have gathered the necessary documents to get your bankruptcy filed.

The problem with emergency bankruptcy cases is your attorney won’t be able evaluate all issues prior to filing your case.  And once the case is filed, the attorney’s hands may be  tied.

5.     Breathe.

The financial and life situations that lead to a bankruptcy are stressful.  You have dealt with the collection calls, the snotty letters, the lawsuits, wage garnishments, sleepless nights, and everything else that comes with overwhelming debt.  Filing bankruptcy will provide you some shelter from this collection storm you have been going through.  Soon after your case is filed you will notice something you have experienced in a while.  Silence.  The phone will stop ringing and you will have an opportunity to catch your breath.

A chapter 7 bankruptcy typically only lasts about 4 to 5 months.  Take this time to regroup and move forward.

Work with your bankruptcy lawyer closely and your bankruptcy will proceed smoothly and truly give you the fresh start you seeking.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© John Skiba, Arizona Consumer Law Group, PLC | Attorney Advertising

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John Skiba
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