Prudent Preparations Before Filing for Personal Bankruptcy
Bankruptcy can be an effective tool in resolving financial problems. But it is not the solution to all problems, nor is it right for everyone. There are some important things you should consider when weighing if bankruptcy may be a good option for you.
Consider the Timing
It is imperative to choose the right time to file bankruptcy. You should generally wait as long as possible because you can only file once every six years. It is important to save this valuable "fresh start" until you absolutely must have it.
Evaluate Your Assets
Examine whether you have non-exempt property and/or wages before deciding to file bankruptcy. If you have no non-exempt vulnerable property or wages within creditors' grasps, then it may not be prudent to file. You cannot be jailed for failing to pay civil debts that are not fines or pursuant to court orders.
Prepare a Detailed Inventory
If you provide a detailed and complete list of your property and assets in bankruptcy proceedings, the court will protect the listed items pursuant to bankruptcy laws. If you fail to provide a thorough listing, then omitted items are unprotected and may be seized.
Be Prepared for Your Credit Report to Be Blemished
Filing for bankruptcy does not rehabilitate an already-damaged credit report. The credit report will remain blemished through the bankruptcy. Bankruptcy stays on the credit report for ten years.
Do Not Incur More Debts
While undergoing bankruptcy, it is prudent not to build any more debts. If you intentionally accumulate new debts, thinking the bankruptcy will erase new debts anyway, you may be found guilty of criminal misconduct and penalized.
As soon as you file bankruptcy, the automatic stay goes into effect and creditors are silenced. They are not allowed to contact debtors for any purpose and all harassing contact ceases.
Bankruptcy cases are dismissed in dishonest circumstances. If a debtor is caught lying, stealing, and/or cheating, the court will likely dismiss the debtor's case in punishment. Hiding facts, omitting information, failing to provide ample information, misrepresenting oneself, and failing to be upfront and honest with counsel are offenses which might lead to dismissal of the bankruptcy.
Know what you are signing up for
Bankruptcy is not an easy process. There are court appearances required. You must provide detailed information to the court and trustee. It may be difficult to understand the process. The costs and fees for counsel are not insignificant. Bankruptcy will disrupt a debtor's life (and others) for a long period.
It is important to seek consult of counsel before filing bankruptcy and undergoing the process, so as to maximum the benefit of its "fresh start" relief and its crucial timing.
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