How to Plan Before You File for Bankruptcy?

Planning your strategies to file for bankruptcy – it may sound strange and suspicious to some people. In reality, there is nothing wrong about it. If your financial situation is getting worse with every passing day and you seem to have no options to get things back on track, you may look at getting bankrupt as your only option so that you could restart your financial in a more efficient manner. You must do a thorough review and analysis of your current situations in order to determine the right time when you should go ahead and file your petition. There is a wide array of factors that you need to work on.

What Debts Are Going To Be Discharged?

The main reason to file for bankruptcy is that you want to get rid of all your debt problems. But, it is very important for you to keep in mind that not all types of debts are discharged even after you have been declared as bankrupt by the court. You will have to prepare a list of all those dues that are going to be discharged. For example, if you are planning to file your petition under chapter 7, all your unsecured debts are very much likely to be eliminated, including your credit card dues. So, if your credit card debts are going to be discharged, it does not make any sense to keep paying for the same. A better strategy is to save that money for the repayment of the debts are not dischargeable, especially if you are reasonably certain that you are going to file your petition. You have the legal right to pay off the non-dischargeable debts in advance even before the final judgment comes in.

Be Careful While Using Credit Cards

Just because you have decided to file for bankruptcy, you should not go ahead and start using the credit cards extravagantly, assuming that all such debts will get discharged. Such activities will create suspicion. It is very important for you to keep in mind that money that you borrow (or use) resulting from some fraudulently activities will not be discharged, especially when such things are proven. Therefore, you have to be very careful when it comes to using your credit cards. The laws have imposed certain limitations in this regard that you must be well aware of. For example, you cannot buy any luxury goods within the past two months prior to bankruptcy filing. Besides that, you cannot also withdraw more than $1000 as cash advance using your credit cards.

You must also plan ahead of time on how you are going to make the best use of the bankruptcy exemptions so that you can keep most of your assets and properties even after becoming bankrupt. For this, it may be a wise idea to consult an experienced and reputable attorney who specializes in handling these types of cases.

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Posted in Bankruptcy, Filing Bankruptcy | 1 Comment »

One Response to “How to Plan Before You File for Bankruptcy?”

  1. Stephen says:

    Good points. It is always good to plan every thing before implementation. If you have tried every thing to fight with your debts and you have not reached to any solution except Bankruptcy then go for it with complete preparation. It will prove a wise decision when your financial condition will be back on the right track. Bankruptcy does not mean like you will not be liable of any of your debts. You should clarify with your lawyer about the future of secured and unsecured debts; it will depend upon the terms and condition like under which chapter your lawyer is going to file your petition. If it is clear that yours unsecured debts will be dispersed off then no need to pay them. One more thing mentioned in the article is if you know that credit cards due will be discharged, it does not mean that you start using credit cards extravagantly. It can give bad impression to the honorary court you must consult your lawyer before doing any such things like taking cash advance or buying luxury items. Your lawyer can give you the best tips on how you can get benefits of the exemptions given in bankruptcy.

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