The bankruptcy process may seem scary, but it actually can be quite therapeutic. Besides, nothing can be more stressful than being in over your head with debt and being hounded by creditors for payment. The truth is, bankruptcy can set you on the path to financial freedom, but it does take some effort from you to be successful.
Preparation
When you file for bankruptcy you will be required to fill out a bankruptcy petition. This document outlines the details of your financial life, which is used to determine your plan of action. You may need to provide copies of your tax returns for the last few years, paycheck stubs, bank statement and the like. It is important that you have this information organized and ready to provide, should the court request it.
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Honesty
When going through the bankruptcy process it is of utmost importance that you remain open and honest about your financial affairs. Lying about income, hiding assets or concealing information about funds can put you in serious trouble with the court. Not only can your case be dismissed, you may even face fraud charges if the court feels you acted intentionally.
It is also a good idea to freeze unnecessary financial transactions a few months prior to bankruptcy. Debts acquired within 90 days of filing may not be eligible for debt discharge. Similarly, paying down or off debts prior to filing may disqualify you from the ability to file altogether. An increase in income before or during bankruptcy is also important to the outcome of your case and should be reported to the court. If you have a change in income, debts or assets during bankruptcy it is required to be reported to the court and should be reviewed prior with your bankruptcy attorney, whenever possible.
Patience
If you filed for Chapter 13, you should know that it can take three to five years to complete your case. Be sure you remain consistent with your debtor's plan payments and use this time to reshape your financial habits. Remember that you are working towards an end goal, one that will serve you far better in the future.
If your debts have recently been discharged, you are now in a unique position to rewrite your financial history. Although filing for bankruptcy does not damage your credit, your past negative account standings most like have. This means that you need to rebuild your credit history, which takes time. Develop a plan to shop around for new credit, finding the lowest interest rate and fees possible. Plan out your purchases and be sure you can afford the payment each month. Keep your overall debt balance below 40 percent of the total spending limit and make consistent payments. Remember that credit repair takes time and focus.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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