5 Tips to Assist in the Bankruptcy Filing Process

financial advisor lawyer consulting mature middle-aged couple showing them debts, bunkruptcyEveryday finances are already a pain, but filing for bankruptcy is worse. That is why we are here to help.

There are different types of bankruptcies, so it can be confusing to pick the right one. It may also be possible that bankruptcy may not be necessary at all. The Loris Bankruptcy Law Firm presents you with these five tips to help.

1. Stop Using Credit Cards Before Filing

In the case of Chapter 7 bankruptcy, it uses your assets to pay off your debt. Some assets are exempt, such as the equity in your home. The remaining debts get discharged while some debts, such as student loans, cannot.

You should stop using credit cards before filing for Chapter 7 bankruptcy. Although credit card debt is typically dischargeable in a bankruptcy case, it does not discharge debts incurred solely for the intent of erasing them. It is best to stop using your credit cards if possible.

2. Know Your Budget Before Filing for Bankruptcy

For instance, Chapter 13 allows you to keep your assets but requires you to make payments over three to five years. A trustee collects your payments and distributes them to the creditors. This bankruptcy plan buys time against foreclosures and other seizures of assets.

But how to survive bankruptcy?

It starts with a budget. A budget will show how much you can pay, clarifying what type of bankruptcy is right for you. If your budget cannot accommodate the payments, it is time to consider other options.

3. Reevaluate and Change

If you file for bankruptcy, you may need a plan for the debt. This will mean you must reevaluate how you manage your finances and change accordingly. Your situation will determine whether you choose Chapter 7, Chapter 13, or one of the bankruptcy alternatives.

Bankruptcy for personal finances will be on your credit for seven or ten years, depending on your file type. This will make it harder to rent an apartment and do other things that require credit checks. Because of this, bankruptcy should be only a last resort.

4. Talk to Your Creditors

Things happen that are out of your control. It could be job loss, medical problems, inflation, or any other unexpected occurrence. People often just skip certain bills when this happens.

This makes things worse because it harms your credit score. Instead, see what your creditors are offering for a revised payment plan. Some creditors may temporarily halt payments.

You may even be able to get a debt consolidation loan. This has saved people from filing for bankruptcy altogether.

You may also be able to refinance an asset such as a house for lower monthly payments. An attorney will walk you through all the options.

5. Have All Your Paperwork Together

Forgetting a bill is the last thing you want to do. Paperwork for bankruptcy is often lengthy, and no one wants to do unnecessary running back and forth.

First, you will need to gather all your financial records from tax returns, pay stubs, bank statements, and other documents. If you have not filed this year’s tax return, you will have to do so before you can file for bankruptcy. Make a habit of keeping them at hand and organized so you can hand them to your attorney and access them for other issues.

A Bankruptcy Attorney Mobile Alabama Can Help You

A reasonable bankruptcy attorney in Mobile, Alabama is a must-have. Loris Bankruptcy Law Firm can help you walk you through the paperwork and help you understand all of your options. Do not hesitate to give us a call when you are ready to start the process.