You may have seen commercials for bankruptcy attorneys on your television, and you may have even read a number of blog posts from different bankruptcy bloggers covering a number of the different elements of bankruptcy law and issues bankrupt individuals face. However, you may still be left wondering what exactly you should do before filing for bankruptcy. Here are some suggestions on what to do before you file.
The first step you should always take is making sure you have properly weighed all the alternatives to filing for bankruptcy available to you. Filing for bankruptcy can have many far reaching consequences. For one, the fact that you filed for bankruptcy will more than likely remain on your credit history for ten years. If you ever intend to borrow money again for a significant purchase, you should certainly keep this in mind.
There are a number of alternatives available to consumers for resolving debt related problems other than bankruptcy. These include hiring a legal representative to negotiate an out of court settlement with your creditors. You should also probably contact a consumer credit counseling service to see if they can find a way to help you better manage your debts. In fact, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 demands that you see such a consumer credit counseling service one-hundred and eighty days before filing for bankruptcy.
The next step you should take is weighing the two kinds of bankruptcy available to individuals against each other. These are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 is more of a liquidation of assets, and Chapter 13 is more of a restructured repayment plan. There are a number of distinct advantages each has over the other that are not shared. Research both so you can decide on the form of bankruptcy best for you. However, due to changes in the law, you may be forced to file for Chapter 13 anyways if a “means test” deems you to have too much disposable income to file for Chapter 7.
The next step is to decide how you are going to file for bankruptcy. One option is choosing to file on your own behalf without the help of a lawyer. While you can legally choose this option, it’s not recommended. Instead, you should probably seek out a lawyer to help you work through your bankruptcy.
Shop around a bit for a lawyer. Choose one that has lots of experience in bankruptcy law. You should also consider how you will have to pay for the services of different lawyers. Certain lawyers will charge you a flat fee for assisting you in filing for bankruptcy. Others may charge you a rate based on your amount of debt. You may also be asked to pay up front or pay in installments with a deposit. Whatever the case, make sure you are comfortable with both your lawyer’s expertise in the field as well as how you will pay for his or her services.
Of course these are only a few of the things you should do to prepare for filing for bankruptcy. It is advised you set up a consultation with a bankruptcy law firm so they can lend you their expertise and help you prepare for the bankruptcy process in the context of your own personal situation.
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