Preparing to File Bankruptcy
So you’ve decided to file for bankruptcy. Now what? While your lawyer takes on your case, there are some documents that you will need to provide to your attorney in order for your filing to be complete. This information is standard in any bankruptcy case
You will need to provide:
- Income information (pay stubs or profit & loss statements) for the last six months of income prior to filing.
- The last two years of tax returns. In some instances you may need to provide more than the last two years of federal tax returns, but two years will usually suffice.
- You will need to provide inventory of your assets and assess a value to your belongings.
- Bank statements for the last year.
- Account information on bank accounts, investment accounts and retirement accounts.
Prior to your filing you will be required to take an online credit counseling course. You will receive a certificate which your attorney must file with your case.
Besides meeting with your attorney and providing the necessary information for your case to be filed, there are a few other considerations that you may want to review.
Here are few tips to make this process go a little more seamlessly for you:
1) Consider switching banks – If you have a loan or debt to your current bank, they can help themselves to your account. If you bank at a Credit Union and owe money they will most likely close your accounts and suspend privileges such as ATM use and online banking. It is wise to open a new account with a bank that you do not owe any money. It is not necessary to close your current account, but start over somewhere fresh!
2) Review automatic bill payments – When in financial distress, you want to stop the bleeding of money in your account. Make sure to control everything that goes into your account and everything that goes out. Occasionally, canceling an automated billing system can be a headache, but sometimes the best way to stop the bleeding is to close your account. This is important for accounts that you hope to discharge in the bankruptcy; there is no sense in continuing to throw money at a debt you are seeking to discharge. However, you need to also be aware that once you file the creditors that is automatically drafting your account for things you want to keep paying for, such as car or mortgage payments, will stop taking money out of your account due to the automatic stay imposed by the bankruptcy.
3) Stop using your credit cards. Continued use of the credit cards right up unto the date of filing may be considered abusive, depending upon the time of charges you have been making. Typically the only acceptable charges on your credit card in the 90 days prior to filing a bankruptcy are for reasonable and necessary living expenses.
4) Check your account balance – If you write a check near the time you file for bankruptcy, it might not clear, leaving you in a sticky situation. What counts is what is actually in your account at the time of filing. Keep an eye on your actual balance before filing for bankruptcy to ensure smooth sailing.
Filing for bankruptcy is a stressful situation to be in, but hopefully these tips can make the transition a little easier. Remember, bankruptcy is not failure, rather it is taking control over your finances. It can be a strategic move to get people back on their feet.