For most, bankruptcy is a last resort, and it is typically one that they don't want to have to pursue. However, for those who need it, bankruptcy can be a true savior for financial woes. If you've found yourself financially strained and unable to meet your commitments, you might be wondering if you should file for bankruptcy. If you are even remotely considering a bankruptcy filing, there are some things that you should do. Here's a look at a couple of the things that you need to do before you file for bankruptcy.
Pull Credit Reports And Gather Bills
The first thing that you should do before you file for bankruptcy is to get a copy of your credit report from each of the bureaus and gather copies of all of your creditor bills or statements. This is important because you'll have to have clear records of how much you owe to each creditor. This is a crucial part of your bankruptcy calculations, so you should make sure that you have comprehensive records that cover everything.
Check Your Tax Records
When you file for bankruptcy, your tax records are used to help calculate your income and asset valuation. That means you need to have all of your taxes filed up to the current year in order for those calculations to be completed. In fact, if you are missing any tax filings, this can often leave your bankruptcy filing facing denial. Before you file for bankruptcy, take the time to go through your past tax records and make sure that everything is up to date. If you're missing any years, file them right away and discuss the issue with your bankruptcy attorney.
Avoid Changing Anything
One mistake that people make before a bankruptcy is that they make sweeping financial changes. Whether you try to give away assets in the hope of preserving them or you take out an extra credit card or two since you assume that you can just discharge them in the bankruptcy too, either of these decisions can be problematic.
In fact, you may have your bankruptcy denied for fraud if you try to do either of these things. If you're giving serious thought to filing bankruptcy, talk with a bankruptcy attorney before you make any financial decisions or changes so that you don't inadvertently do something that could affect the outcome of your case.
Complete The Counseling
In most cases, credit counseling is a requirement for filing for bankruptcy. You'll have to complete this consumer credit counseling program before you can file your bankruptcy claim, and you'll need to include a copy of the certificate of completion with your filing.
During this credit counseling program, you'll learn about money management techniques, tools for keeping track of your income versus expenses, and advice for ensuring that you don't end up in over your head again in the future. These classes can be really valuable, especially if you are struggling with the fundamentals of money management.
If you're not sure where to find the right courses, or if you're wondering whether the course you found will be accepted by the courts, ask your bankruptcy attorney. He or she can give you a list of the programs that the local court will accept.
Bankruptcy is never a simple decision, and it should not be one that's made lightly. However, it's important that you avoid the misconceptions and mistakes that can be costly for those who need financial relief. If you've been struggling to cover your debts and feel like bankruptcy may be the only solution, reach out to a local bankruptcy attorney like Harold S. Entes Esq. today. He or she can go over these tips as well as many others to help you decide if this is the right path for you.