Bankruptcy is an option for those who are severely struggling with finances and the ability to repay debt. The process can seem very overwhelming, so obtaining help is recommended. There are lawyers who are certified and specialize in bankruptcy law, and they can help to explain the laws in a way that is simple and easy to understand.
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Doing Research First
The first thing to do is learn about the different types of bankruptcy. Information can be found at totalbankruptcy.com, and this will help debtors have an idea of what to expect during the process, as well as for which type they might qualify.
It is crucial to avoid making false claims or omitting information on bankruptcy documents. Some individuals are very wary about losing personal property, such as investment real estate, personal automobiles, or other assets. However, lying to a judge is a federal offense and can result in far worse outcomes. Being completely honest with the court-appointed trustee will always result in a better outcome.
Collect All Documentation First
Another tip to remember is compiling all financial information before filing the paperwork. Leaving out a debt or creditor, whether done intentionally or accidentally, will slow down the process. It can also cause additional problems with the court case along the way, so making sure all information is current and truthful will help to simplify the experience.
Other Forms of Income
The debtor must record any additional income, like part-time jobs or a small household business. Being upfront when it comes to income will help both debtors and creditors; failure to do so may result in the case being delayed, or worse, dismissed.
Moving Money Around
Some debtors may be tempted to quickly move assets around, or shift them over to family members. This is against the law, and a good attorney will help to protect personal assets legally. Another tip is to avoid repaying any outstanding money owed to family members in the year prior to filing bankruptcy because based on bankruptcy laws, they are also considered creditors. Your payments should be structured so that all your creditors are paid evenly, based on your capacity.
Bankruptcy lawyers will also ask for information about any outstanding lawsuits against the debtor, or being filed by the debtor. The court-appointed trustee must be aware of any and all potential legal issues along the way, which will eliminate surprises and delaying of the case.
For individuals who are drowning in debt and are simply unable to repay the money, bankruptcy can be helpful. This process helps manage debt better, while working out a plan to repay everything as soon as possible.