Before you file for bankruptcy, there are a few things you need to make sure you’re doing in order to make the bankruptcy process as smooth as possible. Here are 5 things you should do before you put in the paperwork.
1. Stop Using Your Credit Cards
You don’t have to cut them up, but stop using your credit cards right away. Don’t take out cash advances or make big purchases on your cards right before you file for bankruptcy. Even though credit card debt is considered unsecured and may be discharged in a Chapter 7 bankruptcy case, if you put a lot of charges on your cards right before filing, the court may determine that you still owe this money.
2. Don’t Give Away Assets
If you’re tempted to transfer ownership of your car or another asset to a friend or family member right before bankruptcy to avoid having to list it as an asset, don’t. You’ll have to disclose this anyways, and bankruptcy courts will generally still count it as “your” asset. In a worst case scenario, you’ll lose your right to have your debts discharged in a Chapter 7.
3. Get Together Your Income and Expenses
Before going into bankruptcy, it’s important to have a solid idea of what your income is and what your expenses are. Go back over your bank statements or other financial records to get a clear picture of your financial situation and get it on paper. You want to have this information on hand going in.
4. File Any Unfiled Tax Returns
If you haven’t filed all of your tax returns, now is the time to do so. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) has certain regulations on tax returns in the context of bankruptcy, and if you don’t have the last four years of returns filed, you may be looking at the IRS requesting the dismissal of your bankruptcy case.
5. Hire a Lawyer as Soon as Possible
A bankruptcy lawyer is a critical component to a successful bankruptcy. You never want to go into a filing without having adequate support, advice, and representation from an attorney. At the Law Office of Ted Williams, Jr., we can help you get ready to file bankruptcy and will guide you step by step through the bankruptcy process. Contact us today for a consultation to discuss your case in detail by calling (205) 623-4443. We’re ready now to assist you.