What to Do – and Not Do – Before Filing for Bankruptcy

Bankruptcy is a legal process that allows individuals and businesses to discharge their debts. It can be a complex and daunting process, but it can be a lifesaver for those who are struggling to make ends meet. Like any court proceeding, a bankruptcy requires careful preparation. It’s equally important to avoid mistakes that can undercut the success of your case.

Here are some positive actions you should take in the months leading up to filing a bankruptcy petition:

• Get credit counseling — This is a requirement for all bankruptcy filers. It can help you understand your options and develop a plan to manage your finances. You should use credit counseling agencies approved by the U.S. Department of Justice.
• Gather your financial documents — You will need to provide a variety of financial documents to the bankruptcy court, including your tax returns, paystubs, bank statements, and debt statements.
• Decide which chapter of bankruptcy to use — There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 is a liquidation bankruptcy, which means that your non-exempt assets will be sold to pay your creditors. Chapter 13 is a reorganization bankruptcy, which allows you to repay your debts over a period of time.
• Meet with a bankruptcy attorney — An experienced bankruptcy attorney can help you understand the bankruptcy process and choose the right chapter for your needs.

At the same time, these are actions you should avoid:

• Transferring assets — If you transfer assets to another person or entity within two years of filing for bankruptcy, the bankruptcy court may be able to reverse the transfer and bring the assets back into your bankruptcy estate.
• Taking on new debt — It is generally not a good idea to take on new debt in the months leading up to a bankruptcy filing. This is because the bankruptcy court will look at your recent financial activity to determine whether you are trying to defraud your creditors.
• Failing to pay child support or alimony — Child support and alimony debts are not dischargeable in bankruptcy, so you will still be responsible for paying them even after you file.
• Lying on your bankruptcy petition — Lying on your bankruptcy petition is a serious offense that can result in criminal charges.

Obtaining a discharge in bankruptcy can be an involved process, but it can result in a fresh start. By taking the outlined steps to prepare for bankruptcy and by avoiding negative conduct, you can increase your chances of a successful outcome.

At Jeff Field & Associates, we bring more than 20 years of experience to helping people get out of debt and get a fresh start. We have offices in Scottdale, Gainesville, Marietta, Lawrenceville, Douglasville and Athens. Call 404-381-1278 or contact us online to schedule a free initial consultation.