What to Do Before Declaring Bankruptcy

  • Once you have made the decision to declare bankruptcy, you may feel an enormous weight of anxiety fade away. The financial burdens of your debts will soon no longer plague your life. However, before you file your Indiana bankruptcy petition, there are certain steps you should take. If you are interested in learning more about the things you should do before declaring bankruptcy, read on.

    Compile and Review Your Debts

    Before you file for bankruptcy, you will be required to provide the judge with a certificate of completion of credit counseling. In your credit counseling session, you will compile and review all your creditors and debts, as well as your overall financial situation. 

    Although declaring bankruptcy can help you clear your name financially, it will have a significant impact on your credit score, which is why you should always explore other options and save bankruptcy as a last resort. Unfortunately, this is not always possible, but by taking a look at your debts, income, and expenses, you’ll have a better idea as to whether declaring bankruptcy is truly the best option in your case. 

    This compilation of your creditors, debts, income, and expenses will be quite useful if you do proceed with your bankruptcy petition, as all of this information will be included in the disclosure statement you provide to the judge.

    If you really want to get ahead of the game, you can also compile a list of your assets, liabilities, and similar information from your spouse if you are married, as these details will also be required in your disclosure statement.

    Evaluate Your Circumstances

    When most people think of filing bankruptcy, they think that they are going to be selling everything they own to pay off debts and become debt-free. There are many issues with this assumption, but the most important is the assumption that you’ll automatically be filing for Chapter 7. 

    Chapter 7 bankruptcy does involve the sale of your assets, but not everyone will qualify for a Chapter 7 declaration. In fact, only those who live at or below the federal poverty level of approximately $12,000 annually are eligible for Chapter 7. 

    Most petitioners will file for Chapter 13 bankruptcy, as this requires the debtor to repay their creditors over a period of time. Any remaining debts will then be discharged. Before you file for bankruptcy, make sure you know what type of bankruptcy is the best fit for you.

    Meet with an Experienced Terre Haute Bankruptcy Attorney

    Having to declare bankruptcy doesn’t make you a financial failure. It can actually open up many opportunities for financial growth long after your bankruptcy petition has been closed. 

    You can reach out to a Terre Haute bankruptcy lawyer at Rowdy G. Williams Law Firm for help with your case. Visit our website or give us a call at 1-812-232-7400 when you are ready to come in for a free financial case review.