Steps To Prepare For Filing For Bankruptcy
There is much to do just in preparation for filing for bankruptcy. If you don't know much about filing for bankruptcy, you might be confused about what you should do in preparation for filing for bankruptcy. This brief article will serve to help you figure out just what you should be doing. Throughout the course of this brief article, you will learn about finding a lawyer, how to stop paying your loans, how to stop paying your credit cards, how to stop paying your bills and how to start budgeting your finances.
Find A Lawyer
It is important to find a bankruptcy lawyer who can adequately represent you in a court of law. Make sure the lawyer has a robust understanding of Chapter 7, Chapter 11 and Chapter 13 bankruptcy filings. Bankruptcy lawyers tend to cost between $500 to $3,500 per case. The more complex your case is, the more it will cost. For example, if you own a large number of properties, many different vehicles and have many different accounts, your case would cost more than if you are only renting an apartment and have no vehicle. Your lawyer should be able to meet with you for a consultation before you hire him, which will ensure that you comfortable with him and his practices before you pay him to have him help you file for bankruptcy.
Stop Taking Out Loans
Bankruptcy is a great way to be absolved of the responsibility of paying back most loans (there are some outstanding exceptions, such as student loans). However, it is greatly advised that in the time leading up to filing for bankruptcy, you should stop taking out loans. Taking out loans in the time leading up to filing for bankruptcy will not merely look bad on your credit score, it will also look bad in front of the judge reviewing your case, who will be looking at your spending and saving habits, as well as your predilection towards loans.
Stop Paying With Credit Cards
Credit is another way that you can easily rack up expenses. Especially when credit cards can charge a sizable interest on the amount you wish to pay. There are several reasons why you will wish to cease using your credit cards in the time leading up to filing for bankruptcy. For one, it will show the judge reviewing your case that you are serious about rehabilitating your credit score through bankruptcy. Another reason is that added expenses with interest can serve to haunt you in the future.
Stop Paying Your Bills
Although this may sound counterintuitive, you will want to cease paying any current bills you have if you are in the process of filing for bankruptcy. This does not mean that you should simply cease paying the bills, willy nilly. Rather, you will have to contact the proctor or owner of the debt of the bills that you are paying, and explain that you are in the process of filing for bankruptcy. Most businesses will be understanding and will be able to put a hold on your bills immediately, while other businesses may require a notarized letter from your lawyer.
Start Budgeting Your Finances
Although this is something that will require different effort for different people, considering the uniqueness of each bankruptcy circumstance, every person involved with filing for bankruptcy should begin the process of budgeting their finances. This means no extraneous spending on frivolous "fun" items such as cars, video games, and the like. Stick merely to the basics until you once again get back on your feet.
Filing for bankruptcy can be a harrowing experience. It can also be one of the most frustrating times of your life. Hopefully, this brief article has given you a bit of insight regarding what to do in the moments leading up to filing for bankruptcy.