Pre-bankruptcy Steps

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In order to maximize the benefits of bankruptcy, you need to do it correctly. This entails filing for the suitable type of bankruptcy and following all instructions from your bankruptcy trustee. But many bankruptcy lawyers do not advise their clients on what to do before even filing for bankruptcy. If you do not do certain things in the pre-bankruptcy stage, you may not gain the most advantage out of the bankruptcy process. Here are some things to do before filing for bankruptcy protection.

Stop incurring debt or using credit

In an impending bankruptcy, you should stop using your credit cards at least 2 months before filing as far as possible. This is to reduce the amount of debt you need to eliminate. Bankruptcy is to help lighten your debt burden; it is not to give you an excuse to get out of your debt without paying for it. So you should not take advantage of the system by incurring lots of debt or maximizing your credit limit and using bankruptcy to eliminate them.

Do not transfer ownership or give away any assets

You should not transfer the ownership or give away any of your assets to a family member before filing for bankruptcy to avoid liquidation of those assets. This may jeopardize your filing and your petition may be dismissed. Under Chapter 7 bankruptcy, non-exempt assets have to be liquidated (although you will not lose your primary home or vehicle). So if you wish to keep your assets, file for Chapter 13 bankruptcy instead. To understand the difference between the two types of bankruptcy and which is more suitable for you, consult a qualified bankruptcy attorney. Call us at (813) 200 4133 for a free discussion.

Find out which debts are dischargeable

The dischargeable ones are usually the unsecured debts like credit card or medical bills. You may want to stop paying towards unsecured credit or debt just before filing your petition as they are likely to be discharged through the bankruptcy.

Hire a bankruptcy attorney

While it is permissible to represent yourself (this is known as pro se), it is highly advisable to hire a qualified bankruptcy attorney. The bankruptcy code is a complex legislation and you should seek the help of an attorney to guide you through the process. You can ask questions along the way and draw the most benefit from your bankruptcy. Hiring a bankruptcy attorney often saves you money in the long run.

Plan for your life after bankruptcy

The most important thing after bankruptcy is to avoid falling into huge debts again. This entails putting in certain habits and limits upon yourself like applying for a secured credit card, putting aside savings regularly and setting financial goals. This also gives you something to look forward to during the bankruptcy period.

 

Published In: Bankruptcy Updates

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.

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