5 Things You should Do before Declaring Bankruptcy
Are you already annoyed by those persistent debt collectors? Do you feel like you have reached a dead end as far as your personal finances are concerned? If you think you can never handle and manage your piling debts anymore, you should already consider filing for bankruptcy.
The process may not be attractive when initially looked at, but it can be a logical and viable option. It can spare your from your debts without much hassle. But it may also come with certain setbacks, which you can surely live by. Are you considering filing for one? Here are five things you should do first before getting into the process.
1. Consult an asset protection attorney.
There are specific items that are exempted from the watch list of creditors like life insurance policies, retirement plans, and others. Specific kinds of bank accounts especially for married couples can even be spared from the hands of creditors in certain areas. Asset protection lawyers surely know which assets can be protected and spared from a possible bankruptcy proceeding. If you can protect any asset from debt collectors, you should strive to do so.
2. Prepare your taxes.
It is mandatory to have your prior year’s taxes prepared before filing for bankruptcy. It may be impossible to file one without tax returns. Staying current is important in this regard. Tax returns should not keep you from getting a fresh start and discharging your outstanding debts through bankruptcy.
3. Do your homework.
Your lawyer can be the best counsel as he may know everything but you should also be familiar and knowledgeable about the process. Sometimes, some lawyers are not to be fully trusted especially when they have their own conflicting personal interests. To educate yourself, ask questions to the experts, seek insights from others who have already undergone the process, read forums, and consult other attorneys.
4. Consider taking advantage of your marriage.
You may not have to file a joint bankruptcy. In many areas, married couples may be allowed to file separately. If this is the case, there is a chance that marital assets can be protected under certain laws. Thus, you can maximise any amount of assets you can keep by taking advantage of the marriage.
5. Embrace the process.
Focus on filing bankruptcy, not on dealing with debts. The annoyance you get from those nasty debt collection agencies may serve as your motivation. If you feel you are already being harassed by those collectors, change your phone number. This is the time to focus on the consequences of filing a bankruptcy to get rid of the baggage and start anew. Bankruptcy can surely pose a great impact to your credit records but you have to think about the greater benefits of having to undergo one.
Financial problems come to everyone. There are just significant differences about how people handle and emerge out from such challenges. Bankruptcy is a process that can save you from a possible deeper financial mess. It may not seem likely at first, but if you will weigh the pros and cons, the advantages might easily outweigh the disadvantages.
Over the last 3 years, Andrew has helped hundreds of people dealing with debt issues and debt consolidation loans. Andrew has a BA in Business Administration with a speciality in banking and is a regular blog and forum contributor.
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