Filing bankruptcy can be a frustrating process. You don't just sign a paper and have your social security number wiped clean. It's a process that involves notifying each individual creditor. Along with notifying creditors, you have to file paperwork with the courts and appear in court as well. If you are thinking about filing for bankruptcy, you might want a heads up about what to expect from the process so you can prepare yourself. Here are some things you can do to get ready to file bankruptcy.
Get a lawyer
Getting a lawyer to handle your bankruptcy is one of the most important things you can do. Between dealing with the courts and needing proper paperwork for your creditors, you need someone who knows the ropes. Bankruptcy is too important to do it on your own. If you try, you'll likely miss creditors or miss crucial paperwork. If that happens, you'll have creditors collecting from you after your bankruptcy is filed. Those creditors will still provide negative marks on your credit report, and your bankruptcy will be for nothing.
Don't use credit cards or take out loans
Don't use any of your credit cards or take out a loan after you have begun the bankruptcy process. You might think it's a good idea to max out your cards before the paperwork is finalized since you won't have to pay the money back. Doing so is dishonest and a federal crime. If your creditors notice that you used your credit after knowing you'd file bankruptcy, they can file fraud charges against you. The courts can decide to charge you with either a misdemeanor or a felony. Jail time for credit card fraud can be anywhere between three and 20 years.
Stop paying unsecured debts
Once you have begun the bankruptcy process, you should stop paying your unsecured debts. You need to keep paying current bills, such as mortgage or rent, utilities, car payments, and other bills. While the creditors aren't actually allowed to bill you after you file bankruptcy, they can still cut your services and repossess if you don't stay current.
Learn to live below your means
If you are full of credit card debt, you are probably used to buying what you want when you want it. Now that you're filing bankruptcy, you need to learn to live below your means. You need to write up a budget to stick to, and retrain from spending frivolously. You won't have access to credit cards for a while after you file bankruptcy. Once you do have access to them, you need to be smart with your cards so you don't end up back in the same position in a few years.
Assemble the creditors
You need to make sure that you have all of your credits on your bankruptcy when you file. As soon as you decide to file bankruptcy, stop throwing your bills in the trash. Put them in a box or envelope to take to your lawyer in case they aren't showing on your credit report yet. Your credit report is an important part of the filing process. The report will show all of your creditors who have reported to your credit. It will allow you to know exactly who to write down on your bankruptcy paperwork.
Filing bankruptcy is important when you're drowning in debt. You need to get a lawyer to make sure the whole process is done properly. You need to stop paying credit card, and other unsecured debts. Stop using the credit cards and learn to live below your means. When you meet with your lawyer, bring a copy of your credit report. For more information, see a website such as http://www.wflaw.net.