10 Steps and 6 do’s and don’ts before preparing for bankruptcy in 2015

Filing for bankruptcy will affect your future. If you really think it’s a final option for you then you should understand the process clearly. This article is for those who are deciding to file bankruptcy in order to start a fresh in 2015. Below are some recommended steps you need to follow before filing bankruptcy.

Steps to prepare for bankruptcy in 2015

1. Find out an efficient lawyer

Talk to a bankruptcy lawyer as early as possible when you decide to file bankruptcy. Filing bankruptcy is quite difficult without consulting a lawyer as the process is risky and complex. You can get knowledge to know “how to file bankruptcy” from books, local law school . You can also go for DIY filing incase you can’t afford the lawyer.

2. Check your credit report

Your old accounts can give you trouble. So, don’t take any chances as it could lead to a lawsuit. Check your credit report from all the three credit bureaus. Download the apps to get a review of your report for free.

3. Compile all the documents

Find out all the documents including the records of your debt, credit card bills, bank statement, medical bills (if any). Your attorney may ask you for assets documentation, monthly income statement. So, make sure you’ve all the documents in hand before filing bankruptcy.

4. Consult a credit counselor

Try to talk to a credit counselor to downsize the amount of the interest rate . Moreover, you need to learn a smart budgeting plan to minimize the chances of future debt trouble. Talk to a credit counselor to know if there is any chances to pay off all the debts without filing bankruptcy. You can talk to the counselor in person, phone or online.

5. Work with the family as a team

You may not control all the emotional stress alone. Try to get your family involved and let them know about the current financial condition. Talk to them and decide the monthly family budget together to avoid unnecessary expenses. Thus, you can control on overspending and get moral support from your family as well.

6. Find out a second source of income

Try to get a part time job to earn some extra money. You can work extra hour at you office if your employer allowed. Thus, the extra money will help you in such bad financial condition.

7. Don’t use your plastics

Try not to use your credit card once you decided to file bankruptcy as its a legal fraud as you’ve no plan to pay off the bills. Moreover, it’s highly recommended not to purchase any major things in such situation using credit cards as the creditor will show your activities as irresponsible account holder in court.

8. Stop paying your bills

You should stop paying your debts once decided to file bankruptcy . If the creditors bother you much then seek help to an attorney for further action.

9. Follow a proper monthly budget

If you set a rigid monthly budget then you can cover all necessary expenses throughout the time when you file bankruptcy. Moreover, once you make it habit you can secure your future financial life as well. Sticking to a budget is basic step to get a good financial health.

10. Will bankruptcy is best option for you?

This is probably the first question you need to ask yourself. Understanding the bankruptcy process is vital before filing. Remember, there are many disadvantage of filing bankruptcy. bankruptcy doesn’t pay off the student loan debt and tax debt. So, ask yourself or ask an expert whether or not bankruptcy is the best remedy for you.

Do’s and don’ts before filing bankruptcy

It’s very tough to take right financial decision when the creditors are giving you so much trouble through phone calls, letters so on. But, you shouldn’t do any blunder to make the bad situation worse. Heres are some easy guideline to avoid some general mistakes before filing bankruptcy.

Do’s

1. Evaluate the value of your assets. (home, car. other assets)
2. Keep the proof of your identity.
3. List down all your debts (secured ,unsecured).
4. Keep your bank accounts down.
5. Try to open bankruptcy attorney plan.
6. Tell the truth to your lawyer

Don’ts

1. Don’t borrow money once you decided to file bankruptcy.
2. Don’t hide your assets.
3. Don’t transfer money or property to family and friends.
4. Don’t try to damage the property once you've decide to handover to the creditor.
5. Don’t pay off your preferred creditor.
6. Don’t hide any bills from your attorney.

Final words

Remember, bankruptcy process is complicated and its quite challenging to complete the whole process. So, seeking a professional help is always advisable. Confess all the truth regarding your finance and try to be clear to your attorney. Telling lie or hiding will delay your case and make your financial condition worse. So, help your attorney and yourself as well. Thus, he/she can do better on your case. Moreover, take an oath that in future you won’t make your financial condition bad. Read books of personal finances and follow the expert's guidance in order to make yourself educated financially. Once you start to build a good credit things will be more easy to you.