The moment you realize that you need to file bankruptcy is important because it signals a time of even harder work and preparation. Indeed, now that you know that you will be legally allowed to restructure and rethink your debt, you will be more able to seize control of your life and your finances.
Howeve,r you do need to be an active participant in your bankruptcy — it is not a process that happens to you, but rather with and for you. Your bankruptcy attorney will need your total cooperation and engagement if the outcome of your case is to be maximally beneficial to you. That being said, you will definitely need bankruptcy help from a specialized, professional bankruptcy lawyer. They can help you take the following steps to become completely prepared for your case.
What Debt is What?
Not all debt is made equal, and some of it won’t disappear or change at all after your file for Chapter 7 bankruptcy. Therefore, it is wise to maximize payments to debts that are not going to be discharged, and stop or decrease the amounts you pay towards dischargable debts.
Remember that any cash advances on a credit card over $750 (aggregated) made within 70 days before your case is filed is presumed fraudulent and nondischargeable. Similarly, any charges made to credit cards after you file for bankruptcy are nondischargable because you clearly didn’t have the intent to pay the bill when you made the charge.
What Are My Exemptions?
The other important area to consider when preparing to file bankruptcy would be your exemptions — what will you be allowed to keep, and what will be liquidated to help you repay your debt? Courts can be variable when it comes to exemptions, but it is important to disclose everything — hindering your creditors could be grounds for a denial of discharge.
There were 1,071,932 bankruptcy filings in the U.S. in 2013 — filing for bankruptcy is not uncommon at all, and if you do it, you won’t be alone. Filing for bankruptcy often means Chapter 7 ( 2013 saw a total of 728,833 Chapter 7 bankruptcies), and while the cost comes to $306, that is nothing compared to the amount of money you can expect to save.