Top Things to Do Before You File for Bankruptcy Failed negotiations with creditors, imminent repossession, and ongoing foreclosure proceedings are some of the things that characterize one’s lowest point financially and in life. In this situation, no matter how small your bills are, your income may not be enough to cover all of them. When you have reached such a point in life, it is time for you to consider filing for bankruptcy. Since bankruptcy laws have evolved, you have to be more careful when filing for it. The following are some of the things you must do before filing for bankruptcy. The most important thing you can do while filing for bankruptcy is to disclose your expenses, income, and assets in the petition. Full disclosure of your income will help you in discharging debts. It shows that you are honest and you will be allowed to proceed with making payments for debts that have the highest priority. If you fail to disclose everything, not only will you lose the right to a discharge of your debts, but you may pave the way for criminal charges to be filed and fines imposed. You shouldn’t borrow funds nor take an early withdrawal from an individual retirement account. Retirement funds are among the assets and income sources that are protected by the bankruptcy laws hence you should not use it to offset a debt. Before withdrawing anything from your savings, you have weigh all the negatives and positives involved. If you are in a position where you cannot repay debt, just file for bankruptcy and channel your retirement benefits to be used for your personal needs.
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The aim of bankruptcy is to discharge your debts hence you shouldn’t raise a red flag by transferring ownership of your assets to family members. When you file for bankruptcy such transfers will be examined and even transferring a car to a family member will be considered as an attempt to reduce your assets. When it is determined that you are trying to reduce your assets to cheat your way in bankruptcy law, your right to a discharge will be taken away.
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Don’t use credit cards close to the time you are filing for bankruptcy. Spending using credit cards at this moment when you are filing for bankruptcy is a clear indication that you will not be able to repay for the amount you are spending. When you use credit cards yet you aren’t able to repay your debts, it shows that you are doing this intentionally and this decision might end up leading to major complications in your case. It is important that you follow the things that have been mentioned here in order to successfully file for bankruptcy. While bankruptcy might seem a low point in life, you can use it as a positive thing to regroup your finances and improve your financial position.