Struggling With Debt? 4 Tips To Help You Avoid Problems When Filing For Bankruptcy

You thought you were ready for everything after the divorce. However, you weren't expecting to lose your job. Now you're deeply in debt and you have no way to pay your bills. It looks like bankruptcy is the only way out. Before you decide to file for bankruptcy, here are a few things you'll need to know. Following the tips provided below will reduce the problems you may experience.

Do Discuss Options with Your Creditors

Your creditors don't want you to file for bankruptcy protection. If you do, they know they won't get any of the money you owe them. They'd much rather reach a payment agreement with you. Contact your creditors as soon as you realize you can't afford to pay your bills. Try to work out a payment arrangement. In some cases, creditors will reduce the amount of your monthly payments, or postpone payments until you're back on your feet.

Do Hire Legal Representation

You may think that you can handle filing for bankruptcy without legal assistance, but that can be detrimental to your financial future. Before you file for bankruptcy, sit down and discuss your case with a bankruptcy attorney, such as the Legal Clinic Of Jerry Paeth.

The first thing they'll do for you is contact your creditors. This is particularly important, especially if you've been receiving harassing phone calls from your creditors. Once your creditors have been informed of the bankruptcy, the harassing phone calls will have to stop.

Don't Take On New Debt

If you're considering bankruptcy, don't take on any new debt. Once you file for bankruptcy, the courts will look at the dates you entered into all your credit obligations. If your creditors argue that you entered into new credit obligations knowing that you couldn't afford to pay your bills, the courts may preclude you from including those new debts in your bankruptcy. That means that you'll still be responsible for those debts even after the bankruptcy is discharged.

Don't Hide Your Assets

Don't give away your assets before filing for bankruptcy, even if you have belongings that you want to keep. If you're filing for chapter 7 bankruptcy, you'll be required to liquidate your non-exempt personal property. If you're caught hiding assets so you don't have to liquidate them, the courts may dismiss your bankruptcy case. Be sure to disclose all of your real and personal property when you fill out your bankruptcy paperwork.

Bankruptcy can give you the fresh start you need, especially when you're deeply in debt and have no other way out. The do's and don'ts provided above will help you avoid problems when filing for bankruptcy protection.