Important Things to Know Before Filing for Bankruptcy

 In Bankruptcy

There are a few important things to know before filing for bankruptcy. The worst thing about bankruptcy is the events that lead up to considering such a decision. You might be stressed, worrying about bills and your well-being. You might be getting highly unpleasant calls from collectors, and assuming you answer them, they’re surprisingly good at making you feel guilty. They practice their craft to make you feel this way, and to guilt you into paying them before you feed your family.

It’s the business model they follow to make their living by collecting money from you. It’s no wonder you decided to make a life-changing move like filing for bankruptcy. So what do you need to do to file bankruptcies? Many people do not understand that and some assume they can handle everything on their own.

Please, don’t be the person who thinks they can do what an experienced attorney does for a living. The first step in the process is finding a bankruptcy attorney that can help you. Bankruptcy attorneys hear stories like yours daily. They know and understand the situation, and they can advise you on the next steps to take for the best possible resolution for you.

Before you file bankruptcy, arm yourself with as much knowledge as possible to understand what you’re facing. The process may seem daunting, but the reality is your attorney does most of the work. Depending on the chapter of bankruptcy you and your attorney decide on for your situation, your attorney guides the process so you can find financial freedom.

The Bankruptcy Process Simplified

Bankruptcy for individuals differs from that of business bankruptcy, but the result is similar. It’s a fresh start. But make sure you are familiar with the most important things to know before filing for bankruptcy.

Most people prefer a Chapter 7 bankruptcy, or liquidation as some call it because with some exceptions, the bankruptcy could discharge all your debt. You get a clean slate from which to start. A Chapter 7 lasts six months or less.

A Chapter 13 bankruptcy, or wage-earners plan, allows you to pay your debts in installments at a much reduced rate for three to five years under normal circumstances. The chapter allows you to keep most of your possessions such as your car and your home. However, to keep either one, you must show the court you can afford the payment plan set up between you and your attorney.

The paperwork involved in filing for bankruptcy overwhelms some people. The bankruptcy law requires it, and it’s the only way to reach the end of the process. Record keeping plays a vital role in all dealings with the court, so it’s in your interest to complete every step in the order given without missing details. Successful completion of your case relies heavily on your honesty.

First Meeting of Creditors

Soon after filing for bankruptcy, you will attend the first meeting of creditors mandated as part of your bankruptcy filing. In the meeting, creditors, if they attend, have the chance to question you, but the presiding bankruptcy trustee will keep the questioning and the meeting civil.

Once again, your honesty wins over the judge and the creditors. Just explain your answers honestly and completely. Your attorney explains how to file for bankruptcy beforehand so your understanding of the process doesn’t scare you and prevent you from reaching your goal.

Your Financial Life Becomes an Open Book

Aside from the normal feelings of embarrassment about bankruptcy, your finances may become open to the court and there could be direct questions about them. The meeting takes place in a courtroom open to the public, and it can leave you feeling apprehensive about moving forward. Remember your attorney guides you through the process and speaks for you in most cases. This is one of the most important things to know before filing for bankruptcy.

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Finding a bankruptcy attorney offers you the best chance for success during all phases of the process. Going solo filing and representing yourself won’t help you because you’re not likely to know and understand the entire process.

Don’t Make Mistakes that Could Cost You

Remember that bankruptcy is a complicated process that eliminates most or all of your debt. Also, remember that dishonest acts such as using all your credit before your filing to purchase items for pleasure constitutes, in some cases, fraud. This act might cause the dismissal of your case, or worse, criminal prosecution.

It’s tempting to transfer valuable assets such as land or expensive vehicles to someone else while your bankruptcy plays out. This too, looks like you’re trying to deceive the court, which they deal with harshly. Dismissal of your case may be a virtual certainty, and you could face criminal charges.

The benefit you receive from the bankruptcy court to help you find relief from the heavy burden of debt makes your financial life good again. If you try to take advantage of the court’s generosity, it won’t work in your favor. So it is imperative you become familiar with the most important things to know before filing for bankruptcy.

Use Bankruptcy to Help You

The court realizes people have financial troubles and can’t find a way out. They’re there to help you through this difficult time. After discharge, it’s assumed that you learned good lessons to apply going forward and you won’t end up in the same situation. These are important things to know before filing for bankruptcy. If you have any questions or want to find out how bankruptcy can help you, click below to contact us so we can evaluate your case for free. You can also visit our office in Torrance.

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We can clarify and simplify everything for you

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