It doesn't take much to end up in a financial tailspin. Unfortunately, just a couple of missed payments can make it difficult – if not impossible – to recover from. If you've reached the end of your rope, and the creditors are hounding you at home and at work, it's time to consider bankruptcy. Filing for bankruptcy protection will allow you to get out from under your debt so that you can start building a firm financial foundation again. If you've decided to file for bankruptcy, there are some precautions you should take. Here are four steps you should take that will help ensure your bankruptcy case proceeds without complications.
Speak to an Attorney
If you're in debt, and you're considering bankruptcy, you need to speak to a bankruptcy attorney as soon as possible. Bankruptcy can be a confusing process. Unfortunately, making just one mistake in the filing process, or in the paperwork, could result in your case being dismissed. If that happens, you'll need to start the process all over again. To prevent problems with your case, you should have an experienced bankruptcy attorney help you through the process.
Document All Your Debt
When filing the paperwork for bankruptcy, you'll need to list the sources of your debt. Failing to list each creditor could leave you responsible for those debts. As soon as you know that bankruptcy is an option, start gathering documentation for each of your creditors, including names, account numbers and contact information. Once you've filed for bankruptcy, you'll need to contact each one of those creditors to inform them of the proceedings. At that point, the creditors will stop contacting you.
Avoid New Debt
After you've filed the bankruptcy paperwork, you need to avoid new debt. That includes applying for new credit cards, or making large credit purchases. In some cases, the creditors may be able to argue that you obtained credit knowing that you couldn't afford to make the payments. If they're able to prove that during the bankruptcy proceedings, you may be required to retain that portion of your debt, which means you'll need to continue making those payments.
Keep All of Your Assets
If you have assets, don't give them away. It might be tempting to give your personal property to family and friends for safe-keeping, especially if you're going to be required to liquidate your assets for the bankruptcy. However, if you're caught giving your assets away, your bankruptcy case could be dismissed.
If financial problems require you to file for bankruptcy, don't make mistakes that could jeopardize your case. The information provided above will help you avoid complications. For other questions and concerns regarding bankruptcy, be sure to speak to your attorney.