While the process of going through a bankruptcy can help you to wipe out a large amount of debt in one fell swoop, you still have to be diligent if you are to get out of this financial sinkhole. If you file for bankruptcy, the entire process can take just a few months, and you can find yourself completely free of most if not all of your bad debt. Try these six pieces of advice so that none of your old bad debts appear when you start to rebuild your life after bankruptcy.
1. Know The Difference Between Chapter 11 And Chapter 13 - Filing for bankruptcy can either help you to have your debts forgiven, or it can restructure your financial obligations in a manner that allows you to pay what the court decides you are capable of remitting. Learn whether you should put in a petition for Chapter 13 or Chapter 11 bankruptcy so that you can get lasting debt relief.
2. Declare All Income - Copies of your tax filings and paycheck stubs are needed to file for bankruptcy, but don't try to conveniently forget about other sources of income. Whether you receive dividends or have income from a small business, be sure to include every dollar that you have made on your bankruptcy petition.
3. Don't Go On A Spending Spree - One of the worst things that you can do prior to submitting bankruptcy petitions is going on a shopping or credit card application spree. Bankruptcy courts do not reward consumers who have no respect for the process, and you will have a hard time justifying why your application for bankruptcy should be deemed valid if you just opened and ran up several lines of credit.
4. Get All Your Financial Documents Together - Get copies of your bank statements as far as you can go back, find all of your original contracts, and even go through your phone records so that you can have a complete history of all financial obligations, past and present.
5. Communicate With Creditors - Before a judge can decide whether or not to allow your debts under bankruptcy to be discharged, your current and most recent financial history is going to be examined closely. If you are able to show that you have at least tried to work with your creditors, the judge is more likely to give you some leeway and allow bankruptcy proceedings to continue.
6. Find Out Who You Owe Money To - Starting with the major credit agencies, learn about all of your existing debts so that they can be included with your bankruptcy petitions. You may also want to check with the courthouses of every county that you have ever resided in to see if there are any pending lawsuits or unpaid judgments. Doing this will help you to get through bankruptcy proceedings faster, and you won't be surprised by an unknown or long-forgotten creditor coming in at the eleventh hour.
Contact a company that specializes in preparing bankruptcy petitions for more information.Share