Bankruptcy can be a difficult decision for most of us. There are financial and emotional factors to be considered and resolved before taking the plunge. Many people considering bankruptcy face unwelcome emotions of failure and despair. They may even be ridden with guilt. These emotional issues should be confronted and resolved before embarking on the course of bankruptcy. Once the decision is made however, there are certain things you should put on your “bankruptcy To Do list”. In this post, I’m going to offer you five of what I consider the most important.
1)Consult an experienced bankruptcy lawyer– all bankruptcy petitions are filed in federal court. In the Tampa Bay area, the federal courthouse is located in Tampa. Before we get to the courthouse, we will discuss some important financial matters. There are many items exempt from creditors such as retirement plans, life insurance policies and more. In order to guide you through a successful bankruptcy proceeding, I will need to know every detail of your financial history, including those items which may be exempt from creditors.
2)Make sure your taxes are current-bankruptcy proceedings can’t begin until all tax returns have been filed. For some, this may mean postponing bankruptcy until this issue is taken care of.
3)Be Your Own Advocate-educate yourself on all aspects of bankruptcy, especially the possible benefits and consequences. This is not one of those decisions where the less information the better. Do some background checking on your prospective lawyer as well. Not all lawyers are equipped or experienced to handle these types of cases.
4)Don’t transfer assets-once you’ve made the decision to file for bankruptcy, don’t transfer or sell assets larger than $500. This will unnecessarily complicate the process and may call into question your integrity with the court and with creditors. Before making any financial decision of this type, consult with your bankruptcy attorney first.
5)No time for a shopping spree-don’t run up your credit card debt or make any unusual or large purchases. Just like transferring assets, going on a shopping spree will complicate the process and make it harder for you to resolve the problem.
Once you have chosen to file bankruptcy, be honest and open with your lawyer. Your bankruptcy lawyer should be involved or at least consulted on every major financial decision during this process.