4 Pre-Filing Bankruptcy Issues to Consider

4 Pre-Filing Bankruptcy Issues to Consider

9 September 2020
 Categories: , Blog

When filing for bankruptcy, there's a lot more to worry about that just filing the petition. Many issues have to be addressed before you file, and nearly everything has to be handled within a short time frame. In other words, a bankruptcy lawyer will want you to have everything lined up before you sign the paperwork. Here are four things a bankruptcy attorney needs each client to think about before they file.

1. Do Not Transfer Any Assets

Do not transfer assets to other parties in the months before filing for bankruptcy. In the best-case scenario, the court will recover those assets from the people who received them. The worst-case scenario involves a judge rejecting your petition and submitting a criminal referral against you for bankruptcy fraud.

The best advice a bankruptcy lawyer can provide is to refrain from all asset transfers once you think petitioning for relief is something you might pursue. If you did conduct a transfer that the court might question, the best thing to do is to tell your lawyer why you made the transfer and then take your lawyers advice about how to proceed..

2. List the Names of Your Creditors and How Much You Owe

Any party that goes unnamed in your petition has grounds to continue collection actions against you. Make sure you get the most current names for everyone who holds your debts and get the amount of money you owe them as well. Contact your creditors and ask them for both pieces of information. Don't negotiate with them or tell them your purpose. Just get the details and then tell your lawyer.

3. Financial Records

You should be able to present at least your last two years' tax returns. Similarly, it's wise to present at least your last two months' pay stubs. This is especially important if your income has dropped since you last filed taxes because it will help the court see how your financial situation may have changed.

Document your bills, mortgage or rent payments, and living expenses as well. If your bills are highly variable, such as seasonal fluctuations on a gas bill, try to document at least one years' worth of bills.

4. Copies

Make several copies of all of the documents you need to submit. Store the originals in a safe place, and provide a set of copies to your bankruptcy attorney.

To learn more, contact a bankruptcy attorney near you.

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When you have a large amount of debt and no way to pay it, you can start to feel like your freedom has been ripped away from you. With every debt collector that calls and every bill that comes in the mail, you feel more and more uneasy. Thankfully, there is a way forward. You can call a bankruptcy attorney and find out if declaring bankruptcy is an option. This will depend on your income, total debt, and what type of debt you have. Here on this website, you can learn more about the work of bankruptcy attorneys and how to proceed.