5 Things To Know Before Declaring Bankruptcy

| January 14, 2014

Bankruptcy (Photo credit: LendingMemo)

If you’re considering declaring bankruptcy, then you may feel overwhelmed by where to begin. Searching online for help can be a good start, but there’s an abundance of misinformation because each person’s situation is unique. While some advice is true, the best option is to speak with a qualified professional who can answer your questions in detail. Since every situation is unique, you need to make sure you go over every aspect of your finances and explore every available option before maybe deciding that bankruptcy could be the right thing for you.

Bankruptcy might seem scary, and somewhat depressing, but you have to realize that your finances are more important than how you feel about yourself. If bankruptcy is the only option you have left, then taking it is something that you have to do.

But Before you file, here are five basic things you need to know about bankruptcy.

1. You May Have Other Options

Before you file, consider your options. There are many professionals in your area who may be able to give you complimentary or pro bono advice before you file for bankruptcy. Discuss your options with a trusted friend and consider whether the benefits outweigh the impact of filing bankruptcy. If your debt is all credit-card debt, then you may be able to work out payment plans with your credit card company and get yourself back on your feet. Also, a good budget may be another option you have to get your finances back up in the green.

2. Bankruptcy Can Offer a Fresh Start

For some people, bankruptcy can be a fresh start. Filing for bankruptcy may help you eliminate debt and alleviate your stress. While it’s a drastic measure and a difficult decision to make, you should know that filing may actually help you in the long run based on certain factors. While you will have a long road back to recover from the hit your credit score will take, starting from scratch again may be a great way to get your finances back on track.

3. Certain Assets are Exempt

Certain property may be exempt from bankruptcy, and you may still owe creditors depending on the type of property you own. You should also know that if you’re married your spouse does not have to file bankruptcy at the same time. Staggering your filing could help you keep more assets. A professional can explain in detail what this means.

4. You Need Current Tax Information

Filing bankruptcy usually begins with a review of your current tax information. Before you file or consider filing, you need to consult with a professional accountant or at least bring your taxes into the most recent year. You’ll save a lot of time by keeping current financial records. A lot of people throw out forms and statements when in reality, there’s a lot of good those papers and reports can do for you.

5. An Attorney May Provide Valuable Assistance

While you can file for bankruptcy on your own, you may benefit from the experience of a professional. Attorneys who focus on bankruptcy and financial asset protection know the ins and outs of the legal system and can help you stay on track. The most effective law firm will be one that offers dependable guidance based on current federal laws and laws in your state.

Don’t underestimate the power of a good attorney to help you navigate this complex issue. Many professionals offer a contingency-based fee system and can work with you on payments. Before you declare bankruptcy, speak with a professional to ensure that you have the right information.


Tags: , ,

Category: Bankruptcy

About the Author ()

Comments are closed.