Tips for Success in Personal Bankruptcy

Bankruptcy is daunting process for most first-timer filers. It is a difficult system to navigate even with the assistance of counsel. In fact, many lawyers refuse to dabble in the practice area, due to complexity of the practice and potential magnitude of mistakes.

But bankruptcy is more than manageable and a readily-available, expedient solution to appropriate financial situations. Like most things, with a reasonable amount of preparation and effort, debtors can maximize benefits of a bankruptcy filing and glean as much success as possible (which is hopefully a once-in-a-lifetime occurrence).

Here are some helpful tips for achieving success in a personal bankruptcy filing under Chapter 7.

Establish Clear Priorities and Goals

Many debtors have a preliminary goal of hiring legal counsel to assist with their bankruptcy case. Experience, reputation, costs, appointment hours, and office location all may factor into a client's decision-making when retaining bankruptcy counsel. Another significant goal of filers is to rebuild credit as soon as practicable upon completion of the bankruptcy process.

For most bankruptcy filers, bankruptcy is a last resort and not something that was spontaneously and impulsively chosen as an expedient remedy or alternative. Rather, after much contemplation and deliberation, bankruptcy was selected as the most appropriate alternative for improving the difficult situation. It is important for debtors to be realistic and realize that credit rehabilitation will likely span several years after the bankruptcy case's completion. Other goals may include saving a house, saving a car, eliminating credit card debt, or eliminating a tax problem.

Hire Local Counsel

A local bankruptcy counsel will likely be a preferable candidate for legal assistance in navigating a bankruptcy case. He or she will be aware of local procedures and rules, local laws governing exemptions, state-specific guidelines, local evidentiary requirements, and local judges and their proclivities. Local attorneys also will likely have the best relationships with counsel representing creditors and adverse parties, trustees, and court personnel. The time, effort, and money savings likely achieved by hiring a local bankruptcy counsel is key to having a successful bankruptcy experience.

Write Down Debts to Discharge

If a debtor wants to include a particular debt in his bankruptcy case so that it will be eliminated, it is imperative to write down and schedule that debt in the bankruptcy filing papers. Otherwise, the discharge that occurs during the bankruptcy process will not include that debt because no creditors and other potentially-affected parties had notice of the intention to include the debt in the case. A prudent practice is to err on the side of inclusion for debts and assets in a bankruptcy, so there is no risk of potentially having the debt excluded from discharge or the asset not addressed in debtor’s preferred manner.