Filing for bankruptcy is a big decision. It can be helpful to know what you can and cannot do before choosing to file. You may consider bankruptcy if you have difficulty paying your bills. Review the following list to avoid common mistakes and gain the maximum legal benefit from bankruptcy.
The Dos of Bankruptcy:
- Do consult with an experienced bankruptcy attorney. Bankruptcy is a complex area of the law, and you want to make sure that you are taking the proper steps for your unique situation.
- Do be honest with your attorney. To give you the best legal advice, your attorney needs to know all of the facts about your financial situation. Reveal every debt, every asset, judgment, garnishments, or lawsuit.
- Do gather all of your financial documentation. This will include tax returns, pay stubs, bank statements, and credit card statements. Your attorney will need to see all of this documentation to give you the best advice.
- Do make a budget. This will help you and your attorney determines what kind of bankruptcy is right for you. It will also help you keep track of your expenses after filing for bankruptcy.
The Don'ts of Bankruptcy
- Don't use a non-attorney "bankruptcy preparer" as they cannot give you legal advice.
- Don't incur new debt before filing for bankruptcy. Any new debt you incur after filing for bankruptcy may not be discharged in your bankruptcy case.
- Don't transfer assets to friends or family members. This can be considered fraud and can result in criminal charges.
- Don't forget to list all of your debts. If you forget about a debt, it may not be discharged in bankruptcy.
- Lastly, don't worry! Millions of Americans have filed for bankruptcy, which is not a sign of failure. You have a right to seek relief from bill collectors, wage garnishments, and foreclosures by filing bankruptcy! Bankruptcy can give you a fresh start.
Do I Qualify for Bankruptcy?
There are a few factors to consider when determining if you qualify for bankruptcy. First, you must determine which type of bankruptcy you need to file. There are two types of bankruptcies. Which type you are eligible for depends on your income, and then the court will consider your assets.
For filers who cannot repay their debts, Chapter 7 bankruptcy may be the right choice. To qualify, a debtor must pass the means test, which analyzes income, expenses, and the total amount of debt. When the debtor has sufficient disposable income to repay even some of their debt, they must file for Chapter 13 bankruptcy.
When figuring out which chapter best suits your situation, it is highly recommended to consult with an experienced bankruptcy attorney. Bankruptcy is a complex area of law, and you want to make sure that you are taking the proper steps for your unique situation.
Begin Your Journey to Financial Freedom Today
Bankruptcy can be a complex and daunting process, but it doesn't have to be. The attorneys at RHM LAW LLP can guide you through the process and help you make the best decisions for your unique situation. We have extensive experience representing clients in bankruptcy proceedings, and we can help you understand your rights and options. Contact us today to schedule a consultation.
Contact us at (213) 344-0043 or through our online contact form.