Filing for bankruptcy is indeed an arduous process that requires you to be acquainted with all the specifics in order to get everything right from the onset. With all its ups and downs, it can help you stop foreclosures and block creditors from harassing you as you try to build your finances. Below are tips to help you wade through the process in such a way that you’ll be able to build your financial standing with ease.
First you need to determine the assets that would be exempt. This is something that you can easily do with close reference to the bankruptcy code which outlines debtor’s assets that will be exempt from the bankruptcy process. You can also just find a local bankruptcy attorney to discuss this with. Assets within this category are not accessible to the trustee and therefore they cannot be seized.
Make sure your tax returns are in order. Typically you will be required by the bankruptcy trustee to present your previous year’s tax returns and in some instances those for the past two years. Having returns ready helps your attorney in navigating the process with admirable ease.
You need to educate yourself with regard to how filing for bankruptcy will affect your future financial status as well as your relationship with creditors. You may choose to do research by yourself but it is advisable that you seek counsel from a qualified bankruptcy attorney as this will go a long way in solidifying your resolve to file for bankruptcy. But don’t worry, your credit can be rebuilt within a short period of time.
You should make sure that you maintain a calm disposition. Many people have the tendency to feel embarrassed and have fear about going through the process mainly because of the misconceptions they harbor about filing for bankruptcy. The truth of the matter is that bankruptcy is a legal process that is designed to help people with huge debts ease their financial burdens through the elimination of bills and many people have found great emotional relief from this.
Take your time to have a thorough review of your debt. You need to ensure that all debts all included in the bankruptcy petition since it’s only those listed that will be discharged. Ideally you should get together all your miscellaneous bills in the house and have a detailed overview of your financial situation.
Know which debts are dischargeable. It is of the essence to note that Chapter 7 bankruptcy does not liberate you from all the debts. A list is provided by the federal law outlining non-dischargeable debts and this is something that you can discuss with your bankruptcy attorney during consultation. For example debts such as alimony, child support and student loans cannot be discharged through chapter 7 bankruptcy.
Make sure you have a thorough grasp of the distinction between a Chapter 7 bankruptcy and Chapter 13 bankruptcy. There are several crucial differences between these two and it is imperative that you get acquainted with them.
Basically what Chapter 7 bankruptcy does is to eliminate all the allowable debts, thus denying creditors the right to seize your assets. Chapter 13 bankruptcy on the other hand enters a debtor into a payment plan that spans up to 60 months. It requires you to pay your creditors all outstanding debts within the stipulated timeframe. What is imperative is to ensure you stay current on all your monthly payments since it’s after the repayment period that the outstanding debts are discharged.
Ensure that that you are in possession of relevant information and documentation. This will be required by your bankruptcy attorney for successful completion of your petition. Details include a list of your personal and real estate property, monthly expenses, banking statements, investments and any documentation detailing home or house ownership.
Stop making payments to dischargeable debts. If you have really resolved to file for bankruptcy, you may elect to cut off payments to creditors who will be discharged through the bankruptcy process. This is because you will no longer be required to repay these debts. You can start to save this money and prepare for a better financial future.
Make sure you successfully complete the mandatory credit counseling courses. There are courses that are stipulated by the court as compulsory for any person filing for bankruptcy. These include a Credit Counseling Course and a Debtor Education Course, both of which can be completed online at a fee or nearly free. A certificate is awarded upon completion and you are required to file it court as you present your bankruptcy petition.