How To Prepare For Bankruptcy Filing
If you are struggling with overwhelming debt, bankruptcy may be a good way to get out of financial trouble and start afresh. However, you need to prepare thoroughly before filing for bankruptcy to ensure everything goes smoothly during and after the bankruptcy process. The better you prepare, the smoother things will go. In this article, our Pennsylvania bankruptcy attorneys explain some steps you can take to prepare for a bankruptcy filing.
Speak to a Bankruptcy Attorney
In Pennsylvania, there is no law that requires you to hire an attorney before filing for bankruptcy. However, it is highly recommended that you hire an attorney. Even the United States Courts’ website warns against self-representation. According to the United States Courts’ website, seeking a bankruptcy attorney’s help is highly recommended because bankruptcy filing has long-lasting legal and financial outcomes. Filing bankruptcy requires careful preparation and understanding, and making an error or misunderstanding the law in the process can have a negative effect on the outcome of your case.
Gather Information
Before filing for bankruptcy, prepare a list with the following information and gather documents, including;
- A list of all your assets and debts
- All your deeds and titles to property
- Your tax returns
- Copies of proof of income
- Statements from retirement accounts
- Proof of identity
- Statements from brokerage
- Copies of your credit reports
For example, getting copies of your credit reports can help ensure you do not forget to list a creditor in your bankruptcy forms. If you forget a creditor, you will still have to pay that creditor after your bankruptcy is complete. Also, remember that when you sign your bankruptcy forms, you assert under oath that you have listed all the parties you owe.
Learn How To Budget
When you file a Chapter 13 bankruptcy, you create a repayment plan that siphons your disposable income towards repayments. So, if you plan to file a Chapter 13 bankruptcy, you need to learn how to budget. Find areas where you can cut costs. For example, if you regularly eat out, you can start cooking at home. If you have things you no longer use, you can consider selling them. Or perhaps, instead of always taking a cab to work or school, you can start using public transportation.
Complete Your Credit Counseling Course
Before filing for bankruptcy, you need to take a credit counseling course. Take this course, not only because you are required to do so but also because this course can help you prepare for bankruptcy. During your credit counseling course, you’ll be asked many of the same questions about your income and expenses that you’ll be asked when completing your bankruptcy forms.
While you can attend credit counseling in person, you can also attend this course online. If traveling is not an option for you, you can try taking an online course.
Stop Using Credit
Finally, avoid borrowing money after you decide to file for bankruptcy unless it is for necessities such as food, clothing, and utilities. If you borrow money 70 to 90 days before filing bankruptcy, the creditor may argue you borrowed the money without the intention of paying it back. This is considered fraud.
Contact a Pennsylvania Bankruptcy Attorney Today
If you think you are ready to begin the process of bankruptcy filing, contact our Lehighton & Carbon County bankruptcy attorney at Adam R. Weaver for legal guidance.
Source:
uscourts.gov/services-forms/bankruptcy/credit-counseling-and-debtor-education-courses#:~:text=Credit%20counseling%20must%20take%20place%20before%20you%20file%20for%20bankruptcy%3B
