Before filing for bankruptcy, you should be sure of two things. First, you should know that this is the right option for you. Second, you should be completely prepared to move forward with this process if you do decide to file. Of course, you should also talk to a Bergen County Chapter 13 bankruptcy lawyer along the way. Someone from our firm can tell you more about what to expect from this process and why preparation is key.
What Can I Do Before I File?
You should have all of the necessary paperwork together before you file. This includes anything that can serve as proof of your assets or liabilities. Some good examples of documents you might need include:
- Bank statements
- Credit card statements
- Any paperwork relating to loans you have taken out
- Deeds and titles to property
- Tax returns from the last three years
Once you do that, you should make sure that filing for bankruptcy is your best option. This can mean reaching out to your creditors to see if there is anything that can be done to work out payment plans. It can also mean exploring common alternatives to bankruptcy, like debt consolidation. You should also seriously consider talking to a lawyer to learn more about this process and see if you’re a good candidate for it.
What Should I Avoid Doing Before I File?
There are also a few things that you should avoid doing before you file for bankruptcy. You should not:
Drain retirement funds to pay debts: Retirement funds are often protected in bankruptcy. You also may not want to pay down certain debts before filing for bankruptcy, but we’ll talk about that more in a second.
Incur even more debt: If you take on even more debt in the three months or so before filing for bankruptcy, that may look suspicious. Unless you can show that you only charged necessities, try to avoid racking up any more debt before filing.
File if you are expecting a windfall: If you expect to win a lawsuit or get an inheritance, you should definitely hold off on filing for bankruptcy. You may be better off staying in debt for a bit and avoiding bankruptcy altogether. A lawyer can advise you on your best options here.
Pay off certain debts or loans: This can seem strange, but taking the time to pay off specific debts before filing for bankruptcy can actually cause trouble. This can be seen as a “preferential transfer.” Let’s say you pay off “Lender A” completely, but “Lender B” and “Credit Card Company C” hear about this when you go into bankruptcy. They may ask the bankruptcy trustee to reclaim that money so that it can be evenly distributed.
Meet With Our Legal Team
So if you are considering filing for bankruptcy, contact the Law Office of Boyd & Squitieri before you make any major decisions. We can schedule a consultation and tell you more about what our attorneys can do to make this process simpler and less stressful for you.
