Preparing to file bankruptcy is about as fun as preparing for a tax audit. Fortunately, the preparation is the most difficulty part of the bankruptcy process, and the end result of your bankruptcy case is financial relief, rather than a potential tax bill. To get you started on the right track, here are four tips for preparing to file bankruptcy:
Stop Using Credit Cards
If you are considering bankruptcy, you are likely already insolvent. Using credit when you cannot repay the creditor may be fraudulent. Your credit card charges may be found nondischargeable in bankruptcy, or, at worst, you could be charged with a criminal act. The safest advice is to stop charging immediately.
Assemble Important Documents
You will need to verify your identity and social security number with the court, usually in the form of a government issued photo I.D. and a Social Security Card. Additionally, the bankruptcy trustee may want to see important legal and financial documents, such as:
Pay stubs
Business income and expense records
Income tax returns for the past two years
Retirement and investment accounts
Life insurance policies
Vehicle titles and loan paperwork
Home documents such as deeds and notes
Collect Information Regarding Your Debts
Collect your monthly bills and obtain a copy of your credit report. A free (no-strings-attached) credit report can be obtained from www.annualcreditreport.com. If you do not have paper documentation concerning a debt, write down the name and address of the creditor, and the amount owed.
Find a Bankruptcy Attorney
Bankruptcy is a powerful legal and financial tool to help the honest individual who is overwhelmed with debt. However, this federal process can be very complicated and you need the guidance of an experienced bankruptcy attorney. Your attorney can help you make decisions before and during the case, and create a plan for you to get back on your feet after bankruptcy. Your attorney understands the bankruptcy laws and procedures and can take advantage of the streamlined nature of the bankruptcy system. Debtors represented by experienced counsel can expect their cases to proceed quickly and smoothly to resolution, without surprises. Don’t go it alone! Ensure your fresh start by hiring a skilled bankruptcy attorney.