Bankruptcy is a legal proceeding that most people have heard of, but until you’ve actually gone through it you don’t know what to expect or how to prepare. Like anything unfamiliar, filing for bankruptcy can be intimidating to anticipate, but if you take the following steps one at a time, you can feel confident as you move forward.

  1. Complete credit counseling – These courses are required prior to filing for bankruptcy. They only take about an hour and can be taken online or over the phone. The cost of this class is generally about $25.
  2. Pull together all of your financial papers in preparation for meeting with an attorney. You’ll need your bank statements, your taxes for the past two years, proof of your income, a credit report, and all correspondence regarding any legal claims or collection letters against you. If you have a mortgage or car loan, be sure to include those statements.
  3. If your bank is also one of your creditors, it would be a good idea to open a new bank account. That is because once you file for bankruptcy, your creditor/bank might close your account.
  4. Once you’ve selected an attorney, start referring all collection calls to them. You will be amazed at how quickly these annoying and threatening calls and letters stop.
  5. Make a list of questions you can ask your attorney, making sure you let them know if any of the information on the paperwork that you’ve assembled has changed.

In addition to following these steps, there are a few things that you should avoid doing for fear of making your situation worse or ruining your chance at being approved for bankruptcy. These include:

  1. Even if you owe your family members or friends money, now is not the time to pay them back, and do not transfer any assets to any of them in order to try to protect them. In fact, if you’ve repaid loans to any close associates in the last year, make sure that information is included in your documentation.
  2. Leave your retirement accounts untouched. Their holdings will be safe from liquidation.
  3. Don’t charge things on your credit cards or take on any new debt on things like financing a car. The only exception to this rule is unplanned medical debt.

For more information on the bankruptcy process, contact our experienced, helpful bankruptcy attorneys today to set up a time for a consultation.

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