Unfortunately, there is a common misconception that you can simply declare bankruptcy and receive immediate relief. This is far from the truth as there are a number of important considerations that must be made before filing to reap the full benefits of this process. If you’re considering bankruptcy, it’s important to familiarize yourself with the steps you can take to prepare to help make your filing as effective as possible. The following blog explores the steps you should take and what to avoid before filing. You’ll also discover the importance of discussing your legal options with an experienced Orange County consumer bankruptcy lawyer.
What Can I Do To Prepare for Bankruptcy?
If you’re ready to file for bankruptcy, understanding the steps you can take to prepare for this process is critical. Generally, one of the most important things you can do is consult with an experienced bankruptcy attorney. Though it is not a legal requirement to work with a lawyer during this process, it is extremely beneficial to do so as bankruptcy is tedious, overwhelming, and often confusing. Having an attorney to assist you can ensure you can navigate this process as seamlessly as possible.
Once you’ve discussed your circumstances with an attorney, you should gather all necessary financial documents. This includes paystubs, tax returns, a list of debts and creditors, the assets you currently own, bank statements, and any other financial documents that may apply to your circumstances. Not only will you need this information when you file, but you’ll also need to bring these documents when you attend credit counseling.
Finally, you’ll need to attend credit counseling before you can file for bankruptcy. You must attend an approved course in which you and the counselor will explore alternatives to bankruptcy. You are not required to adhere to these options instead of filing for bankruptcy. Instead, you must simply submit the certificate of completion with your filing. The course must be completed no more than 180 days before you file.
Is There Anything I Should Avoid Doing?
While taking the time to prepare for bankruptcy can help reduce the stress associated with this process, it’s important to understand that there are things you should avoid doing as well. One of the most detrimental mistakes filers make is running up debt in the months leading up to filing because they assume they can have these debts discharged as well. It’s vital to know that making large purchases within 90 days of filing constitutes fraud. Even if you fully intend to pay off the debt, it can still be considered “presumptive fraud.” As such, you should avoid making luxury purchases or withdrawing cash advances in the months leading up to your filing.
While you may have to sell assets before bankruptcy to cover expenses like rent or groceries, which is acceptable and understandable, you should avoid moving assets around before filing for bankruptcy. When you have an asset you’d like to keep safe you may assume hiding it or transferring it to a friend for the time being can help you keep it concealed. Unfortunately, it’s incredibly likely that this asset will be uncovered, and as a result, your case will likely be dismissed. Additionally, you can face criminal charges for concealing assets.
As you can see, there are several tasks you should complete before filing for bankruptcy and actions you should avoid. If you’re ready to begin this process, the team at the Law Offices of Michael D. Pinsky, P.C. can assist you through your case from the moment you’re ready to file to when your final eligible debts are discharged. Don’t hesitate to contact our team today.
