Some Helpful Tips in Preparing for Bankruptcy
Written by Emil Fleysher | February 16, 2013 | Bankruptcy
In today’s economy, often times people are forced to choose between paying their bills or buying groceries. When they eventually decide they can no longer continue this way, bankruptcy can offer a fresh financial start. Whether your decision to file bankruptcy stems from a financial disaster or simply not having enough income to cover your expenses, retaining an experienced bankruptcy attorney will ensure you are successful in obtaining financial relief. Here are some tips for you to consider while filing bankruptcy.
Do not leave out any income.
You might think that the small amount of income you earn from your part time night job doesn’t count, but that is incorrect. Gather all necessary documents including paystubs and financial statements to show your attorney before filing to ensure the correct debt relief option is chosen.
Even if it seems like disclosure may keep you from being able to file your bankruptcy, the consequences of providing false statements and documents can be far worse than not having filed in the first place. In many cases, there is no reason to hide assets or information since timing and exemptions can often remedy any concerns over most issues.
Do not leave out your cars.
You may be hesitant to list a vehicle because you do not want to lose it, but do not leave it out. All assets must be listed and , in many cases, you can keep your car through exemptions and/or lack of equity. If the value of the car is less than the amount of the loan securing it, then it is a liability(as opposed to an asset) and it is to your advantage to list it. Additionally, if your child drives a vehicle of yours that has not yet been transferred into their name, do not transfer it before you file bankruptcy as this can be viewed as a “fraudulent transfer” which would hurt your case and create a unnecessary trouble with the Trustee.
Do not leave out any of your creditors.
There are 2 reasons why you should include ALL of your creditors in your bankruptcy petition. First, the bankruptcy laws require you to truthfully and accurately disclose all of your assets and liabilities. Second, if a creditor is not listed in your bankruptcy schedules, they will not receive any notice of your bankruptcy filing and will therefore potentially be prejudiced. If after the bankruptcy discharge and closing of the ase, a creditor that was not listed in your schedules but should have been contacts you regarding collection of that debt, they will have the right to continue to pursue you since they were not on notice of your bankruptcy filing. This issue often arises with medical debts that do not appear on your credit report and for which you do not have statements or bills. For these reasons, it is crucial that you make sure to include all of your debts in your bankruptcy schedules.
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